Performance Is New Programmatic In TV Advertising

The following was previously published in an earlier edition of Online Spin:

TV ads are about to undergo a huge shift in how they are bought and sold. This change isn’t just about the big announcements of late about audience-based TV ads -- the OpenAP consortia from Fox, Turner and Viacom, as well as NBCU’s announcement that it would reserve $1 billion of its inventory this year for audience-based sales.

Nope, something even more fundamental is happening in media, and it’s going to have its biggest impact on TV.

The future of TV will be about performance. As media legend Alan Cohen proclaimed as he took over as president-CEO of independent agency Quigley-Simpson earlier this year, “Performance media is where it’s at. It’s the new programmatic.”

While Cohen was speaking of media broadly, the rise of performance-based buying and selling will have its biggest impact on TV advertising, I think.

Why? Performance dominates digital advertising, because it can be measured and optimized that way. And performance is what marketers truly want, fundamentally, when they buy.



This was never really possible on TV historically, not at the spot-person level, but now it is. The rise of massive amounts of direct, second-by-second TV viewing data at the person and household level that can be matched to online and offline purchase data in a privacy-safe way means that marketers no longer have to wonder how TV ads work in driving sales or leads. Now they can know. Better yet, now they can use those insights to better plan and optimize their campaigns going forward, maximizing their performance.

No longer are they hamstrung by only having mix models that take months to conduct, and not getting much deeper than the network or day-part level.

Is this really new? A bit yes and a bit no. Television has always had performance advertising, you might say, since direct-response ads have been with us almost as long as TV has. That’s different, though. You might also argue that TV has always been a performance medium for marketers who sell regularly and track sales, whether it’s retailers like Walmart or packaged-goods brands like Coca-Cola.

Without question, retailers have always known in a general way how their TV spend correlated to store traffic and sales. Movie studios have always seen the impact of TV spend in their box-office numbers. So too have airlines, restaurants and hotels when it comes to butts in seats and heads in beds.

However, TV advertising has never been as predictable, provable and performance-oriented  as new digital channels like search and social have become for marketers. On platforms like Facebook, marketers can buy campaigns that are guaranteed to reach a certain group of people as well as deliver their desired business outcomes. Marketers get to have their cake and eat it too.

That is where TV is going fast. The notion of “programmatic” TV was a bit of a head fake. The vast, vast majority of TV is not about to be bought and sold on programmatic exchanges — not for many, many years.

However, the idea that TV will be bought and sold based on performance — that world in unfolding before us right now.

What do you think?

5 comments about "Performance Is New Programmatic In TV Advertising".
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  1. James Smith from J. R. Smith Group, July 13, 2017 at 5:34 p.m.

    Dave, I've got more questions about "performance" than answers. What constitutes performance?  What KPIs?  There's a lot of talk about results/performance based pricing in the KPI live or die?  Improvement in health by what %?  How does that translate to say net TV?  What about supply side pricing?  How does performance impact spot pricing? Will upfronts be history?  Will make-goods go away? 

    We have a lot of "walled" data gardens out there too.  Any chance of those walls breaking down to help media buyers and clients work cross platform?

  2. Dave Morgan from Simulmedia replied, July 13, 2017 at 5:38 p.m.

    Jim, in my view, performance is in the eyes of the beholder. The performance objectives and KPI's will be set by the marketers. This means that each and every seller will have to be able to assess their ability to deliver the desired performance for a multitude of different potential business outcomes for a mutlitude of different categories and marketers. I think that we will continue to content based buying and seling as the foundation of TV advertising, but more and more people and outcome based performance will be driving the economics. These will not just happen in scatter, but will also be part of the upfront buys too, much as NBCU apparently did in this upfront.

  3. Ed Papazian from Media Dynamics Inc, July 14, 2017 at 12:18 p.m.

    I agree with Dave about automated "programmatic TV" time buying not becoming a reality for a long time---if ever. As for "performance" being the next step, of course, although it has always been how TV campaigns were evaluated. Most sensible national TV advertisers routinely track how well their ad campaigns function in gaining ad awareness as well as their persuasive power. These and others also monitor sales, not on an individual by individual basis but overall and by cities or regions---sales attained mainly via their distribution system---retailers----as opposed to sales garnered directly. When they see a lack of momentum in awareness build, message registration, motivating power, etc and the effects are confirmed by the latest sales results, they usually consider action---like making changes in what they are saying or how they are saying it and, sometimes, adding media weight or modifying the media plan

    Dave is also right that "performance" can be defined many ways. For some advertisers it is simply generating sales. For others, while sales are, obviously, important, it's also about brand image which, they believe, leads to more sales. For still others, let's face it, there is no clear picture. Many advertisers buy time in very high priced sports and news programs as well as specials, not because these target their user bases more efficiently, nor because of their reach;in most cases the same people could have been reached via other forms of TV at far less cost. Such buys are often driven by factors such as, program "compatibility with the ad",  merchandising, the ego trip of sponsoring sports or some big TV "event", one-upping rival brands, etc. In short, while I don't regard "performance" as a new concept I can see where focusing on this aspect---in media plans and, where possible, in media buys, will help to stimulate some serious thinking among advertising CMOs about exactly why they use media the way they now do and whether some new approaches are needed.I do not see this as changing the way all or even most TV time is bought but it could  be an important factor for those advertisers who are actually willing to be more scientific in their approach to media rather than just pontificating about it at industry ghatherings and other forums.

  4. Dave Morgan from Simulmedia replied, July 18, 2017 at 8:42 a.m.

    Ed, really great points. I think that you're spot on. Performance in measuring media - and TV particuarly - is by no means new. However, re-emphasizing it and making it a first order issue in evaluating linear TV advertising will lead CMO's to reasses the way that they think of TV and will ultimately bring more dollars into TV and more optimization into it as well, which will benefit not only buyers and sellers, but viewers as well, as they begin to receive less wasted frequency of irrelevant ads.

  5. Ruaidhri Mag Fhloinn from TVadSync, July 18, 2017 at 11 a.m.

    Great article, Dave. Though historically there has always been some level of performance-based TV advertising, connecting the dots hasn't always been straightforward. Recent phenomena like time-shifted viewing of recorded content and the rise of Video-On-Demand have also complicated the question of performance attribution and targeting for TV advertisers. For example, it's difficult to correlate spikes in sales with ads shown on prime-time TV if those prime-time shows are all getting watched at different times - due to viewers recording them and watching them whenever they feel. But the level of accountability on offer, due to content recognition and device (TV and mobile) mapping is definitely helping solve that problem, and changing the way savvy CMOs can approach evaluating just how TV contributes to their KPIs.

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