SMG Chief Digital Officer: 'Change Is In The Air'

The writers' strike, the impending broadcast shift from analog to digital, and last year's flood of dollars into online ad networks and exchanges are exerting tremendous pressure on all the players in the TV industry.

That's according to Curt Hecht, CDO, executive vice president of GM Planworks and Starcom Mediavest Group, who gave the keynote address Tuesday at the Strategy Institute's Digital Media Measurement and Pricing Summit.

"Change is definitely in the air," Hecht said. "We've long talked about bridging the gap between digital and TV, but there are multiple change agents that are forcing the two worlds to come together pretty quickly in 2008."

No one is immune--not the broadcast and cable networks, not traditional, digital or hybrid agencies, and certainly not Nielsen, the key currency provider, Hecht said.

In late 2007, Starcom inked a landmark deal with TNS Media Research to track anonymous set-top box data with Charter Communications, a digital cable service provider. The partnership gave Starcom the ability to assess the performance of commercials (and their parent programs) on a second-by-second basis--bringing digital style quantification to the most expensive type of media buy. "The TNS system pulls data from 300,000 households, and with Nielsen you get data from 12,000," Hecht said. "Which one would you rather have?"

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In 2008, agencies and advertisers will increasingly turn to measurement services like TNS and move away from using Nielsen as a currency for buying TV, Hecht said. In addition, newer firms like Quantcast with plans for set-top box stats will likely be more appealing to the networks themselves, as they will be able to quantify the value in longer-tail networks with smaller sample sizes--since they may have been overlooked or undervalued in the past. "The programmers are starting to look at new currency levels as well," Hecht said. "And that's a big deal."

Cable operators are also coming together to develop their own measurement standards--for managing the set-top box data and pushing household addressability (or the ability to target specific ads on a house-by-house basis), among other things. The initiative, dubbed "Canoe," is aimed at helping the networks better monetize their inventory and streamline the data aggregation process for advertisers who will need to purchase ads in the post analog-digital shift.

"Measurement is difficult with cable--it's hard to extrapolate insights both from the data itself and the format it comes back in," Hecht said. "There are no standards now, and the cable networks are working to develop them because of the all digital shift in '09."

Operational changes will also be fueled by the parent companies of the ad networks and exchanges, he added. "Companies like Google and Microsoft have bigger ambitions than getting advertisers to buy banners and buttons," he said. "They have their eyes on converting those paper buys for TV."

And as advertisers continue to funnel their digital dollars through exchanges, they'll get more comfortable with the idea of buying some types of offline inventory via the same model.

However, not all TV buys would be auction-based, Hecht said. "Different marketplaces need different transaction models," he said. "And that's part of the reason why Google's TV plan with EchoStar hasn't scaled to the level that they'd probably like it to--they only have that one model." The advent of data-based, Web-influenced buys, though, is inevitable, he said.

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