Commentary

Audience-Based Buying Is Taking Over -- How Advertisers Can Successfully Adapt

by Marianne Vita , Op-Ed Contributor, June 2, 2021

“The only thing that is constant is change.” That adage rang true in ancient Greece, when it was originally stated by philosopher Heraclitus, and today it rings truer than ever for the TV advertising industry.

According to a recent survey of over 200 marketers, 89% of marketers say they are expecting a “significant shift” away from traditional demographic-based TV buying to an audience-based buying (ABB) strategy over the next three years.

So, if you are an advertiser, how do you prepare for this future? The first step is to know what exactly audience-based buying is.

What is audience-based buying?

With advances in technology and measurement, marketers can target and buy multiscreen TV ad campaigns based on specific audiences such as lifestyle characteristics and purchase behavior.

Using anonymized aggregated data to inform their decision-making, marketers can deliver relevant advertising directly to custom audience segments like “new parents” or “in-market car shoppers,” wherever and whenever they are watching.

The bottom-line impact: By thinking beyond traditional demos, and opening up buying to all audiences, marketers can better engage their most likely current — and future — customers and unlock access to consumers who spend nearly $4 trillion annually, or 41% of total U.S. spending, based on data from the US Bureau of Labor's 2019 Consumer Expenditure Survey.

Furthermore, audience-based TV-buying opportunities are growing, as marketers have a variety of platforms to choose from.

Many major media companies have introduced their own solutions, such as NBCU's NBCUniversal One Platform and Ampersand's The AND Platform, while consortiums like Project OAR and OpenAP are collaborating with companies like AMC, Fox, ViacomCBS, Univision, FreeWheel and Vizio to overcome issues with standardization and simplify the buying process overall.

Amid this shifting TV advertising landscape, in which technology, measurement and opportunities are all evolving, there are tangible steps that advertisers can take to set themselves up for success for the rest of this year and beyond. Below is an outline of three of those steps.

Examine the strength of your organization's training and tools on audience-based buying

While many marketers understand some aspects of what audience-based buying is, only 33% of marketers recently surveyed identified the precise definition.

In addition, over half of all marketers (55%) said they have either been trained informally by peers or have not received any training at all.

This indicates a real need for more education of planning and buying teams. To give your organization an advantage, consider whether there is an opportunity to introduce new training practices, tools and resources to ensure teams are learning how to best implement change.

For agencies, taking action such as developing an in-house training program or building out a data-management practice can be instrumental in educating internal teams and ultimately facilitating data-driven TV buying.

Prepare for the future by testing and learning what works for your brand and build upon those insights in future campaigns

To a large degree, marketers are implementing some form of audience-based buying. Only 8% of marketers are not currently employing an audience-based approach.

Furthermore, 33% of advertisers say ABB is a key part of their buying strategies, and the rest say it is a small part of their strategy or they are still in a testing phase. The fact that most marketers are employing ABB in some form means they are proactively preparing themselves by investing in data and analytics capabilities and building out their targeting and measurement capabilities, as well as testing and learning.

Many advertisers recognize that now is the time to assess which platforms, targets and tactics work best to deliver business outcomes.

This “test and learn” mindset will help brands achieve success in the future as the industry increasingly moves toward a total audience-buying approach. Rome wasn't built in a day, and neither does an ABB strategy have to be.

Employ an audience-first buying strategy to achieve a variety of business KPIs

One of the benefits of an audience buy is the ability to precisely target and measure beyond traditional media metrics and look at business outcomes. Data shows that marketers believe strongly in the ability of ABB to drive business outcomes.

Notably, they believe those outcomes to be full-funnel.

Looking to drive awareness and reach? Consider that 74% of marketers believe ABB can deliver incremental reach of key consumer groups. Looking to build brand love? Seventy-two percent of marketers believe it will add deeper engagement. Looking to grow sales? Sixty-two percent of marketers say audience-based buying can increase sales.

The TV advertising landscape is at an inflection point — as the practice of audience-based buying is bound to continue growing.

Today, there are actionable steps that marketers can take to strengthen their ABB strategies, and those that take these steps will set themselves up for success for the years ahead.

advertising, audience-buying, media buying, media measurement, metrics, television, video

4 comments about "Audience-Based Buying Is Taking Over -- How Advertisers Can Successfully Adapt".

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Ed Papazian from Media Dynamics Inc, June 2, 2021 at 11:05 a.m.
Marianne, while 89% of "marketers"may say in a survey that they expect a "significant" shift away from demographic -based" media buys to "audience-based" buys the fact of the matter---where TV is concerned---is that upwards of 90% of all buys will be done the old fashioned way this year---and the percentage may even be higher.. This is not to say that TV advertisers shouldn't be exploring---and testing---alternative methods that involve much higher CPMs but promise improved targeting, as I strongly support that. However, the way most TV advertisers approach TV time buying---especially at the national level--must be radically changed if any move to "audience" buying is really to gain traction. You can't force your brands into massive, "corporate", upfront buys and then expect these CPM-driven deals to fit the goals and needs of specific brands. What's needed is two kinds of upfront buying---one for the CPM/ GRP tonnage chompers; the other for individual brands who can chart their own course as best they can and use some of the new targeting methods where the data is of sufficient quality to apply. Indeed many brands may opt to go both ways---allocating part of their TV buys to low CPM, tonnage, placements and part to better targeted but more costly "audience" buys. Unfortunately I see little movement in this direction and the next upfront, which will see a probable return to normal spending levels for "linear TV" pus some dollars being garnered by CTV/OTT/AVOD, reflects this.
Reply

John Grono from GAP Research, June 2, 2021 at 7:36 p.m.

Well, who'd have thunk that!

Apparently for decades (and closer to a century) marketers have not bought an audience. They simply signed up to buy ad impressions. Of course that is simply not true as Ed has eloquently demonstrated.

The irony is that during the nascence of internet-based digital advertising most campaigns were measured by traffic impressions. It took many years for the industry to accept that served impressions greatly overstate the actual audience. It now seems that actual audience data is a real thing for many of the digerati.

Which brings to mind that the wisdom of Jean-Baptiste Alphonse Karr's 1849 epithet of "plus ça change, plus c'est la même chose" is yet again shown to be true.

Ed Papazian from Media Dynamics Inc, June 3, 2021 at 9 a.m.

John, what amazes me is the assumption by many digital-only people that TV advertisers---to say nothing of those who use radio, OOH,newspapers and magazines-----have not been targeting people---or consumers---with their ads all along but, instead have been targeting bot-like creatures called GRPs who happen to be 18-49 years old. Even stranger is the almost total disconnect between what is thought of as media "targeting" and the way most advertisers and their agency "creatives" develop positionning strategies for their brands ---usually involving certain mindset appeals among product user segments---and how they buy media. The fact that media sellers and buyers agree to use broad and basically meaningless age/sex "demos" such as adults aged 18-49 or women aged 25-54 as the basis for gross audience tonnage guarantees is taken to mean that's how the brands are targeting their campaigns. Which, if true, means that most CMOs and brand managers are idiots. Ah, but now, we have a complete revolution in the offing---one that targets "audiences" not those pesky beings known as GRPs. We are saved---at last.

John Grono from GAP Research, June 3, 2021 at 10:23 a.m.

Too true.

My rule of thumb was to try and get 70% of the All People Ratings in the advertisers target demgraphic as provided by their in-house commissioned product usage survey, or the perceived target for new products.

What the advertiser thought of as '30% wastage' was actual natural human usage and should be thought of as an unexpected opportunity to present the brand to potential new users, as that is where the growth is as shown by Prof. Byron Sharp. I'd suggest to the client that the biggest rating programme that they desperately wanted to be in (think SuperBowl) would be disqualified from their schedule by their rule as they were targeting Grocery Buyers 25-55 (who were less than half of the audience). If just 5%-10% of that 'wastage' tried the product that would be the most cost effective spend they could do.

The old motto of ... if you don't reach them they won't buy applied then and still applies now. What has changed is that the communication conduits have changed and splintered. I doubt that the "70%" rule would apply now due to diversification and would probably be something like 50%.