Commentary
Linda Yaccarino's Call To Fix TV Advertising And Its Measurement
- by Dave Morgan , Featured Contributor, November 30, 2017
“We have a problem. You know it, I know it, we all know it."
That’s how Linda Yaccarino, chairman of advertising sales and client partnerships at NBCUniversal, greeted participants at a summit she organized earlier this week in New York City to talk about issues in TV ad measurement.
Most of us who work in TV advertising could or would have said exactly the same thing, although I would put a bit of a twist on it. Current TV ad measurement is indeed problematic, but it not the problem. It is a symptom of a bigger problem: While TV has changed massively over the past decades, how it is bought, sold and measured hasn’t.
If we look back over the past 30 years, TV viewing has changed substantially, as have the needs and media alternatives of most advertisers. So too, have all of the technologies that can drive, control and measure most other forms of advertising. Finally, the choices and behaviors of all consumers have also radically changed.
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Unfortunately, how TV ads are planned, bought, sold and measured has changed very little. If Rip Van Winkle was in TV advertising and awoke after a three-decade snooze, he wouldn’t skip a beat when he went back to work. He’d recognize virtually everything.
As has been reported from the summit, one of the biggest issues is that we have stretched the industry’s core measurement beyond its limit. Measurement of TV audiences at the campaign level according to gross rating points and broad sex and age demographics just doesn't cut it anymore, unless these metrics are complemented by much more granular measures related to outcomes like purchases, return on investment, and person and household level reach and frequency.
This is what advertisers now expect from their digital advertising. It is what TV must provide, too, if it wants to continue to garner significant budgets in the future.
Why aren’t measurements like this used today for the vast majority of TV ad buys? Not because it’s not technically possible. It certainly is. It’s not because Nielsen and other measurement companies don't do it. They certainly can, and are developing digital-like measurement products for TV advertising.
It’s not happening today because the majority of TV advertisers and their contracted media buyers haven’t made it a priority or committed to the process. Buying on purchase metrics is viewed as anathema to most large TV brand advertisers. Most believe they would be selling their souls if they prioritized ROI performance over buying content and day-part placements alone.
Further, using those metrics could mean that marketers -- certainly those that are not digital-first brands -- would need to shift away from the procurement and cost-center management focus that most operate under today.
We need to realize that “performance” in TV advertising is not a four-letter word. I believe we will only get the TV advertising measurements that we need in the future if we can make industry members, especially advertisers, think of their TV advertising with the same mindset of performance and ROI that they apply to their digital and promotion expenditures -- and not just as part of an annual marketing mix modeling exercise, but proactively and tactically as they plan, buy, measure and optimize their TV advertising.
Thank you, Linda Yaccarino, for carrying the torch for TV advertising’s future. Are the rest of you out there ready to help drive the change we all need?
I agree, Dave, about the old fashioned way that most TV time buys are made and the counter productive effects of advertiser bean counters pressuring agencies to deliver the lowest CPMs. The latter, of course, is a primary culprit in the maintenance of the corporate buying system, which subordinates the needs of individual brands to the corporations' goal of buying TV more efficiently. At the same time, we must accept the fact that many advertisers regard the media function as a boring numbers game and think that their brand positioning and commercial executions can do all of the work, singling out receptive consumers no matter when and where the commercials are seen. In other words, "creative" is king; media buying merely buys eyeballs for the creative to capture and motivate. Until this kind of thinking is dealt with and, so far, it hasn't been really touched on, the current system will remain in place for many advertisers whose brands might benefit greatly, at least in the initial stages, by being allowed more flexibility. And, of course, there are some advertisers where image-building, promotional tie-ins requirements and merchandiding considerations do, in fact trump, more refined time buying techniques. So, what we are talking about is not 100% of all national TV time buying, but probably about 65% of it.
I agere Ed. A big part of the change will have to be raising the profile and importance of the media numbers game, recognzing that playing Moneyball with TV ad $$'s will create marketshare growth and higher stock prices. It will take a while.
Well stated Mr. Morgan. I believe the "tipping point" is near and that dramatic growth of CTV/OTT placement is coming and will put great stress on the linear business to finally make big changes. Of course, if you're sitting on multi-decade low bases in the Ntl TV marketplace - this may not look so good to the "bean counters".
Great point Paul ... a key issue here is the low legacy base rates so many folks have on their Natl TV buys, which the beancounters want to hold onto, even if they're frequency heavy GRP's. But, as you point out, ratings pressures/declines recently are doing a pretty good job sopping up that excess inventory :-)
Applaud the efforts by Linda, Sean, Joe, Jeff and any other heads of media companies, to move in this direction, but ultimately they're doing this to 1) provide a rationale for raising their pricing in a world of diminishing GRP supply and 2) looking for ways to sell the remaining portions of their inventory they can't move across their portfolio of brands. Regardless of motive, ultimately they're the recipients, not the spenders, of media. Real change will need to come from the primary change agents -- agencies and their clients. At this point in time, neither seem to have the burning desire to disrupt the status quo. Until all parties see the tanglible benefits of moving to this direction, change will come more slowly than we'd like.
Quite right, Eric. The primary motive of NBC as well as other TV sellers who go the "advanced TV" route is to take what they've got----a slew of old folks and low brow GRPs plus smaller portions of more desirable marketing prospects---and try to get advertisers to pay more for all of these eyeballs under the guise of better targeting. Until "better targeting" metrics are based on viewer data not set usage---which strongly favors the sellers and is misleading to the buyers---it's not really "advanced" at all. Still, the sellers do have a right to use whatever strategies they can develop to suit their needs and they are justified in seeking to monetize all of their audience---time delayed, out-of-home, digital, etc. The problem in the last two cases being that the measurements are not comparable to the in-home peoplemeter findings from Nielsen. No one should be against improved targeting methods but we must be wary of labels and look at what the various methodologies actually provide.
Good points Eric and Ed. Ed in that the targeting isn't quite what it may sound like (set vs person, and some other "methodologies" and things: like it might cost more to reach the fine target you want then it does just to reach everybody - kind of like the spot/Ntl thresholds we used to look at way back when), and Eric in the "until agencies and Clients" come around.
I think the pace and magnitude of change is going to accelerate greatly, however, due to the convergence of a series of events:
1. Online "video", OTT, etc. will now compete for "video" budgets. Linear TV is no longer a monopoly on "video". Declining viewership driving higher rates due to rather inflexible demand is one thing - losing budgets to online video and OTT - quite another. If your a TV supplier, your going to feel tremendous pressure to offer IPTV and OTV options so as to get full value for your programming or lose budgets to other video enterprises that will be in these spaces.
2. The maturation of programmatic buying for non video digital media has come a long way and will increasinly normalize. Thus, programmatic, always scary for the TV guys. Losing control of inventory. How will it work? New, different - big risk - may not be as scary moving forward. Other digital media have pretty much figured out the model so it will be less risky as the TV guys can adapt from an existing model with lots of lessens already learned. And OTT, of course, is primed to be sold digitally.
3. The hype digital keeps growing and growing. Right or wrong - everyone wants digital. Try and get a job. It's all digital, digital, digital. Television departments are now video departments - Client's want digital video (right or wrong, I might add) And the agencies/clients are going to feel tremendous pressure from the techy folks to utilize. The tsunami of hype will overwhelm the "inconvenient" realities that Ed points out.
Technology moves forward always, never backward. We get closer and closer - I think the "tipping point" is coming.............
Dave, You nailed so many of our issues. What Linda is doing is amazing and so needed. I also agree with Ed... simply getting the client's attention to consider the math and financial impact/opportunities can be challenging.
One item I see differently is your point that TV contracted media buyers haven’t made it a priority or committed to the process.
In my 11 years of working for one of the largest and smartest buyers out there, Mr. John Muszynki, (something like 32 up-fronts and controls billions in spend) I learned a lot. I would argue that together John and I and many others really pushed very hard being the first to use and transact on set-top-box data dating back to 2008 with so many initiatives since then. Some people even remember my button “Free the Data”.
I can only speak for my experience at Publicis and working with John, the key challenge he taught me is an agency (and client) can only do so much to uncover where the valuable inventory is and thus care only so much unless inventory owners sell their product differently. Maybe this is why it appears that the majority of agencies and clients don’t make it a priority? When you are limited to daypart packages and not individual units there is a limit to what progress can be made. Some inventory owners are starting to change this long-standing packaging practice.
There is a lot of reasons for this bundling but I think the industry is coming to terms that we have over taxed the viewer with ads. We need to come together and build a better model…one that has less ads that have more value and clients are willing to pay more for because they have incredible value. Data is no doubt a huge part of the solution. But we need to focus on multiple issues all at the same time. Institutional change. Sales and packaging strategy. Creative relevancy. Sales organizations. Dynamic Ad Insertion. Yes, agency processes and mindsets but I would argue these agency folks are a competitive bunch…if the value is there to go get for clients they will run to it in order to win or maintain business.
This is a multifaceted industry challenge and I don’t think the blame lies solely with agencies and clients. We have all played our parts and now is the time for action. Let’s do this!!
Tracey, you're totally on target. A lot of players have to move to make this work. At the least, clients need to prioritize and pay agencies to take the kind of innovative steps that you and John took. Second, sellers have to unbunlde dayparts and rotators so that advertisers and agencies can better exploit data targeting and more strategic buying methods. It's coming, I'm sure, but only because a lot of folks are finally ready to follow pioneers ilke you!
I agree Eric. Your background in sales, client-side and agency give you a perspective many dob't have. I'm hopeful that the sell-side will offer up more flexiblity and control to the buy-side, that the strong emerging agencies will take advantage of it and build leadership models for everyone else. As we've discussed, it's most likely that small shops - not holding companies - will lead the way here.
Given the shorter duration of ads, they are much harder to 'measure' on TV than programmes. That is, there is/will be a cost implication. I'm yet to see or hear of the advertiser that is willing to chip in and pay for the additional measurement. TV stations measure their content, advertisers expect their content - the ads - to be measured for free, arguing that it is included in the adcost.