Commentary
Why The Timing For Simulmedia's D2Cx Is Just Right
- by Joe Mandese @mp_joemandese, November 5, 2018
Big startup ideas, they say, are a lot like “Goldilocks and the Three Bears.” Sometimes they are too hot and emerge before the marketplace is ready to embrace them. Sometimes they’re too cold and miss the market altogether. Here’s why Simulmedia’s new direct-to-consumer media-buying platform is just right.
First and foremost, the industry’s mindset has come around to the idea that direct-to-consumer marketing isn’t just a new disruptive force, but a fundamental new business model empowered by direct-to-consumer media: digital.
Secondly, it works -- enabling new establishment brands to emerge by bypassing traditional media channels and going direct-to-consumers, to compete with and often disrupt old establishment brands.
Thirdly, when they reach maturity, these new establishment brands do what all mass marketers do -- they turn to high-impact, mass reach advertising. And the best form of that still is television.
So what if TV could leapfrog the process and become an engine for direct-to-consumer brands earlier in their evolution? That’s what Simulmedia introduced last week. The platform, dubbed D2Cx, leverages the same platform, technology and inventory Simulmedia has developed for big brands, but puts it in the hands of new-to-market brands that otherwise would use search, social, mobile and the burgeoning biddable OTT marketplace.
If you want to get a glint of how that works, download LUMA Partners’ Terry Kawaja’s direct-to-consumer presentation and you’ll see why it scales. Now imagine scaling it with the best and most effective TV advertising inventory.
I’m not sure if this is what Dave Morgan had in mind when he founded Simulmedia in 2008, but I suspect some form of it was, even if the term D2C was way too hot back then. Want some proof? Remember Spot Runner? No? That was the WPP-backed startup that put the power of TV advertising into the hands of anyone -- small, medium-size or big business -- via a simple digital interface. All you need was a credit card and a media plan.
Spot Runner failed because it was too hot, but also because its technology and its supply of inventory didn’t scale. After eight years of incubating, Simulmedia with the biggest players on the supply and demand side, the timing is just right for D2Cx.
And ultimately, it should be a great thing for TV -- enabling it to unlock sources of demand that it has, to date, been prohibited from tapping into.
How do I know? I’ve seen it before. Actually, I covered it.
When I started covering the TV business in the early 1980s at Adweek, there were just 200 brands from 50 companies buying the “Big 3” TV networks. By the end of the 1980s, thanks to Ted Turner, Kay Koplovitz, Bob Pittman, Bill Grimes and other cable pioneers, there were 4,000 brands buying “national TV.”
Today, sources tell me there is anywhere from 8,000 to about 12,000 brands using national TV in some form.
If Simulmedia’s D2Cx does what I think it will, watch that grow geometrically over the next few years. That will be good for TV. It will also be good for the rest of the ecosystem, especially ad agencies, because it will create more demand for all advertising, marketing and media services.
Joe Mandese is the Editor in Chief of MediaPost. You can reach Joe at joe@mediapost.com.
This was an unpaid(?) endorsement.
@Dorothy Higgins: That's correct. RTBlog is a weekly column reflecting my personal opinions about the programmatic marketplace. From time to time, I write about companies I think are doing innovative things. On a few occasions, that has even included Mediabrands.
The only way MediaPost is paid for publishing it is via adjacent advertising.
My browser currently is loading ads from Simplifi's addressable geo-fencing.
That's how our business model works. It's called "advertising."
Joe, as you may know, I started a trade magazine with my late partner, Bill Barlo around 1980, called "Ad Forum". It was geared to the top 1000 national advertisers who, collectively, spent about 95% of all national TV ad dollars. As you may also know, the TVB used to publish data from TNS Mredia Intelligenser on the number of brands using national Tv on a year by year basis. I looked up the number for 1980 which was 2522. This jibes pretty well with the research I did when I created "Ad Forum". My point is that the ad sources for ABC, CBS and NBC back then were never as concentrated as your "Ad Week" analysis suggests. Perhaps 200 brands accounted for half of the dollars---or something like that--- but hardly all or close to all. I do agree, that the advent of cable allowed many very small brands to get a crack at national TV exposure and it is often true that a small brand starts with selective media, then, as it attains scale, graduates to mass media.
Make that Bill Barlow, not Barlo, in the first line of my post. Sorry, Bill.
@Ed Papazian: Thank you for sharing your credentials. I know about them, but may help some of our readers. The source I was using in the early 1980s was a precursor to TNS MediaIntelligence: CMR (Competitive Media Reporting), a joint-venture of Arbitron and Nielsen that tracked TV advertising occurances.
Was your look-up the number of brands using "national spot" TV? Or nationally distributed TV networks. My example was talking about the latter.
The word "national" can be confusing in some industry databases.
Joe, I wasn't trying to share my credentials but just sharing some information and its source. The wording in the TVB releases---as I recall---distinguished between "national" and "local" and I took that to mean that the 2522 referred to those brands using network TV---at the time this being 99% the three broadcast networks. As a frame of refererence, when I was at BBDO, we alone had clients whose national exposure on the broadcast networks would have involved at least 150 brands handled by all of their shops---Lever Bros. Gillette, Pillsbury, Pepsi Cola, Scott Paper, Campbells Soup, Dupont, Chrysler, Armstrong Cork, Breck, Burger King,BFGoodrich, Philco, Warner Lambert, Liberty Mutual, GE, etc. just to name those I recall off hand. In fact, in those days it was not unusual for 10-15 different brands to share "sponsorship" of a single made-for-TV movie or a single installment of a drama series.
Joe, just for fun, I dug up another piece of "evidence". In ancient times, Nielsen used to list the companies who advertised on national TV---ABC, CBS and/or NBC---in each of its bi-weekly rating pocketpieces. Being something of a packrat, I have a few of these--one dated, the two weeks ending November 21st, 1965. I added up the number of different companies listed in all network shows for just this one two-week interval and came up with 260. Among these giant spenders were Chun King, DeLux Reading Co., Consolidated Cigar, Calgon, Derby Foods, Hartz Mountain, Int'l Silver, Old London Foods, Mogen David Wines, Ozite Corp, Sicks Rainer Brewing, and Wallace& Tiernan, Inc.---to cite only a few. Ok, so it's 1965, not 1980, but if the premise that a relative handful of big spenders held almost exclusive sway over network TV in 1980 is true then that certainly must have been so in 1965 when 94% of all home had TV sets and it was only 15 years since the new medium arrived on the scene in a big way.
@Ed Papazian: I'm not so sure I agree with your logic. Of the brands you're citing here, I think only a few even exist anymore. The data I'm citing came from around 1984 or so and was a listing of brands and parent companies advertising on network TV. I don't have access to archival data to go back and confirm it, but I'll poke around and see what I come up with. The point was that there was a relatively finite number of brands advertising on the Big 3 networks, but that the advent of lower cost national network TV avails from cable enabled the number of brands using nationwide TV (distinguishing here so we don't confuse the discussion with "national spot"). And that the same thing could well happen with the advent of platforms like D2Cx.
Joe---and Dave----I have the advantage of having been there, so, for me this is not a theory nor guesswork. There were plenty of big and small brands on TV. I personally worked on brands such as Swan Liquid, Wisk, Lifeboy, Soft and Dry, Mrs. Butterworth, and others which had limited TV budgets but spent them on network TV.
I'd be interested to see what you can dig up, Joe, in terms of facts----I like facts---but least we digress, for the record, I have been agreeing with Dave on many points in his crusade for better targeting. His newest ploy---of actually orchestrating the sale of such time is interesting and needs to be watched closely as it might open some eyes----providing valid ROI info is made public. I think that we tend to get overly excitied about some of these ideas and that leads to exagerrated descriptions of how things were and what they will become. Good luck on your new venture, Dave.
@Ed Papazian: "Ploy?"
You should read this:
https://amzn.to/2D6mzyd
Or at least checkout Terry Kawaja's D2C presentation.
This is a good thing for TV, ad agencies and the overall media economy.
It's also a good thing for consumers.
It's not a good thing for old establishment brands that want to rest on their laurels, but it will probably reinvigorate more of them to become better, more innovative and more competitive too.
Joe, I stand by my use of the word "ploy"---a smart move designed to give the user an advantage. And I applaud Dave for making such a move as he is facing tremendous problems trying to move hide bound advertisers away from their long established and outmoded perceptions about how to buy TV time and how to use the medium. My point in all of these discussions about OTT, 6-second spots,"data", "attribution", "addressable TV", programmatic time buying, etc , and now selling direct to the consumer is the way they are heralded as the second coming and the salvation of advertising. Nonsense. Each of these initiative has at its core elements of value---but not for every advertiser nor every ad seller and, in many cases, not even a majority of same. When and if these new concepts or adaptations are able to do what they promise to do, fine, let those buyers and sellers who will really gain by their use employ them. In fact, were I one of those who might gain, I would jump right in on Dave's idea and see what it can do for my brands. But everyone doesn't have to march to the same drummer to be successful or accomplish their goals. We have too many players with too many distinctive marketing needs and agendas for that to be possible ---or even necessary.
So love, love, love all the pioneering that is happening. Great work!!!! I remember winning the Warby Parker business at Spark/Publicis. It was addressable TV only and about 5 years ago. Timing was too soon but still a great learning experence. We also worked on AirBnB as they started to scale up marketing efforts with Starcom/Publicis. Could not agree more that DTC is perfect for data driven TV. Congrats Dave on your staying power and timing.
@Ed Papazian: Sometimes, I think we are talking about different things. This is one of them. My column is about enabling direct-to-consumer brands tap into the power of TV advertising and why that is a good thing for the media economy. It's not a new concept. They've been doing it quite effectively with other digital media, I was just making a case why Simulmedia's new platform could be a boon for bringing new brands to television. It's not about it being a "second coming and the salvation of advertising."
Joe, We are talking about the same thing and I think we are actually in agreement. My comment about the way all of these ideas are being touted was not a referrence to you, personally, or even this particular conversation---but to the way that they are being promoted in many ways by many people who go overboard on their predictions and, let's face it, their promises.
Returning to the issue at hand, I think that the main point is not so much the idea that Dave's initiative will give very small brands that can't even afford to buy cable ads a new and better targeting vehicle---as he's using cable, mainly, plus some broadcast as his media vehicle---- but, rather, Dave is offering existing brands with unique targeting specs as well as direct marketing goals a way to really refine their buys and maximize ROI. Or, maybe, its a bit of both. Dave, please correct me if I'm wrong on this.
Ed, I think you're right. It's both.
Anything that makes it easier helps demand for national advertising and is good for sellers. Doesn’t matter if we start from 250 or 2500. If more advertisers can access and gain value from this inventory, it should compensate for the declines seen elsewhere.