ADVANCED LINEAR TV ECOSYSTEM: A BYTE-SIZED OVERVIEW
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- Cori Campbell
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1 : WHAT IS THE ADVANCED LINEAR TV ECOSYSTEM? Earlier this year, we published our first Knowledge Lab on Advanced Linear TV Advertising. As noted then, advanced linear TV advertising refers to the ability to bring enhanced data and greater automation to the linear TV and video buying and selling process. While the focus of our first Lab was how the application of data is bringing greater insight and targeting to linear TV, the focus of this Lab is on the advanced TV ecosystem providing a deeper understanding of the new players emerging as the process for planning and buying TV advertising expands to a complex web of technology providers, content aggregators and data providers, as well as buyers and sellers of media. Advanced Linear TV is often broken into two categories: data-enabled TV, and addressable TV. The first, DETV, refers to the ability to overlay data segments on traditional linear TV to more effectively deliver ads to the desired strategic target; Addressable TV takes data one step further and enables an advertiser to achieve one-to-one targeting at the household level. WHAT HAS CHANGED ABOUT TV BUYING? The linear TV industry is undergoing a seismic change. Marketers today have the ability to reach more precise audiences on linear TV through the use of data and automation, and they are eager to dive in. According to emarketer, the advanced TV market is expected to grow from $706 million in 2016 to $2.16 billion (3% of the TV market) in 2017.* However, as opportunities abound for marketers to leverage the new technology, the processes for procuring and selling TV space are changing rapidly. As a result, studies have shown that brands, agencies, and media companies alike are often confused by the new system, and apprehensive about experimenting in advanced TV.* Buying TV has historically been based on discussion and agreement between the buyer and the seller using demographic data, but today s TV ecosystem has multiple players, and multiple opportunities for data and automation at every step. While this has made buying in this new world more seamless, these expanded capabilities have added to the behind- the-scenes complexity of the process. Yet a basic understanding of advanced TV workflows can bring greater clarity to what, at first glance, may seem like an undecipherable web of acronyms and vendors. GROWTH OF ADVANCED TV $706 million $2.16 Billion *Source: Mediapost, September
2 DEFINING THE ROLES: For players across the ecosystem, it s a brave new world of TV advertising. While some elements of their job have stayed consistent, many have changed, and oftentimes this means a growing list of responsibilities. Below, we examine what s new and not-so-new for the key players in the TV ecosystem on both the demand and the supply sides. Demand Side: Supply Side Advertisers: What Hasn t Changed: Advertisers always have the same goal, whether they are selling soap or selling insurance: to drive revenue. For many brands, TV continues to be a must-have channel because of the high level of emotion and brand connection that sight, sound and motion can provide, and this remains unchanged, even in the advanced TV era. What Has Changed: Fragmentation of consumer video viewing has made it more challenging for marketers to achieve effective reach on TV alone. The growth of digital channels provides them with more options to reach their audience with increased data and automation, but also more decisions to make, as they are tasked with making the final call on whether their TV dollars will go digital, or remain in the more tried-and-true traditional TV realm. Agencies: What Hasn t Changed: Agencies are tasked with bringing the best media options or combination of options to succeed based on their client s KPIs. They act as the eyes and ears of the brands, choosing the media and partners that will drive the best results. What Has Changed: In today s increasingly digital world, there are many more content providers and technology partners in the TV space. Agencies work with a roster of outside partners, such as DSPs, SSPs, and MVPD s, often leveraging ad technology to help provide the best approach to targeting, data, and measurement, to drive optimal value for their client. DSPs: What Hasn t Changed: Demand-side platforms provide media buyers with the technology to purchase ad placements in an automated fashion. What Has Changed: The role of the DSP used to be limited to the display world, and then the online video world. Today, DSPs also play a key role for advanced TV, where they are responsible for automating and simplifying an increasingly complicated ecosystem, as well as adding data for targeting, and intelligent ad decisioning. With a reliable DSP, advanced TV ad placements can be purchased with just a few clicks. Media Owners: What Hasn t Changed: Quality content has always been the key focus for media owners, as they work to build bigger audiences to translate into greater revenue. Additionally, it s crucial that they form the right partnerships and connections to increase yield and profit. What Has Changed: While that is still true, media owners today are tasked with driving high yields on a variety of properties across digital channels. Audience-based selling brings greater complexity to the digital world, but also more opportunity to drive revenue. In TV, this group is now able to better identify their audience, layering first- and thirdparty data over TV viewing data to offer more efficient strategic targeting at the network, program, or daypart level. MVPDs: What Hasn t Changed: A Multichannel Video Programming Distributor (MVPD) is a type of service provider that delivers video programming services to the consumer, often charging a subscription fee. What Has Changed: In the world of advanced TV, MVPDs play a crucial role in making addressable TV a reality, because they are the only entity with access to a consumer s set-top box and registration data. Only with cooperation from an MVPD can a brand reach a consumer on a 1:1 household level. 2
3 Proprietary Platforms: What Hasn t Changed: Propriety platforms allow for major media owners with large amounts of inventory to build their own SSP to manage inventory in an automated and data-focused way. What Has Changed: In today s busy TV landscape, the ability for media owners to build their own supply-side platforms provides many benefits. A proprietary platform, in some ways, allows for more hands-on control when it comes to inventory; however, this approach also restricts the buyer from seeing a complete, apples to apples view of the landscape. SSPS: What Hasn t Changed: Supply-side platforms refer to technology that media owners use to automate the process of selling and managing their ad supply. Like a DSP, an SSP simplifies the advertising ecosystem through automation, and can add data to increase the value of inventory. What Has Changed: The role of SSPs has expanded, and will continue to expand, as they have access to advanced TV inventory. Media owners can use SSPs to interface with DSPs, or directly with Advertisers and Agencies, to drive stronger yields on their TV inventory. Additionally, as both buyers and sellers begin to use technology for media solutions and inventory management, the use cases for SSPs and DSPs are beginning to see more overlap. Aggregator Networks: What Hasn t Changed: Aggregators have always helped package media across diverse properties to offer scalable media packages to advertisers. These media networks help bring more depth and breadth to inventory that would otherwise be available to an advertiser by providing access to inventory across a variety of inputs (i.e. local, broadcast.) What Has Changed: Today, a crucial piece of an aggregator s value proposition is the data and analytics they can offer. These elements help to drive efficiency and lower costs by providing better targeting and measurement. The Role of Data Viewing and Measurement Data What Hasn t Changed: Nielsen and comscore (formerly Rentrak) have long been key players in TV measurement, as they offer a reliable and trustworthy assessment of a channel that nearly the whole industry agrees to use. What Has Changed: Nielsen is still the gold standard on which media is bought and sold, but other data providers are entering the fold with their own strong value props. For seasoned data providers like Nielsen, their offering has widened exponentially and includes Total Audience Ratings to measure across channels. Meanwhile, comscore and new providers like TiVo have also become key players, attempting to bring new approaches of household measurement to the traditional Nielsen panelist-based measurement system. These companies have vast digital capabilities, as well as the ability to measure overlap for the same consumer on both linear and digital devices. Additionally, one of the newer data types, registration data, is key to the development of addressable TV. Data Management Platforms: What Hasn t Changed: Data providers and data segments have long existed in the digital realm where segments could be applied and leveraged by a user s cookies online to determine which ad should be shown. Data Management Platforms (DMPs) have always been valuable in their ability to manage and select vast amounts of data in an automated way. What Has Changed: As TV advertising evolves, the demand side (advertisers and agencies) as well as the supply side (media and content owners) are looking to provide clients with the ability to get the most out of linear TV advertising placement. The ability to apply data has existed in the digital world and is extending into TV with the ability to overlay and tie together TV advertising with real marketing activity either through data elements tracking purchase and customer engagement to the brand (first-party segments) or behavioral and household attributes found within traditional Data Management Platforms. Applying data to linear TV helps to deliver that additional layer of targeting that has previously been challenging to achieve when buying on age and gender. 3
4 TV BUYING MODELS IN ACTION There are a range of approaches that marketers can take for their television advertising strategies. While the traditional TV route is still the best choice for advertisers interested in broad reach, data-enabled TV offers greater targeting and efficiency of dollars. The third approach, addressable TV, provides the greatest targeting and the most precise data at the household level, but can come at a cost since it is guaranteed to deliver to the target audience without any waste. While using Advanced TV may be relatively simple from a platform user s perspective, a visual representation helps to explain the path between buyer and seller in the advanced TV world. Below, we provide a map of steps for an advertiser looking to buy TV in each scenario. It is worth noting that in all data-enabled and addressable TV situations, advertising technology plays a key role, and is present throughout the process (even beyond the individual boxes represented in the chart below.) Likewise, data is flowing throughout the process and coming from all sides -- from the advertisers and agencies, from the content owners, from the platforms, and from the MVPDs. In order to run a successful advanced TV campaign, marketers and media companies rely on technology to make the best use of data, and to drive the process from planning, to management, to execution, to measurement. Traditional TV Data-Enabled TV Addressable TV Increased Targeting ADVERTISERS/AGENCIES TV MEASUREMENT DATA: NIELSEN, COMSCORE FIRST PARTY, PURCHASE, BEHAVIORAL DATA, AUDIENCE PANEL VERIFICATION HH SUBSCRIPTION-BASED TARGETING Demand Side Platforms Demand Side Platforms Data Proprietary Platforms Supply Side Platforms and Aggregator Networks Proprietary Platforms 1 2A 2B 2C 2D 3A 3B 3C CONTENT OWNERS (Broadcasters & Cable Networks) MVPDS (Cable & Satellite Providers) CONTENT OWNERS AND DISTRIBUTORS Traditional TV Data-Enabled TV Addressable TV 4
5 1. The Traditional Buying/Selling Approach Today, most TV ads are still purchased only on age and gender, through a direct interaction between the buyer and seller. This approach, which has been in place for decades, has a more simple workflow. The demographic measurement is applied by Nielsen, and ensures that the buyer is getting what they paid for, and the seller is informed about what they have to sell. 2. Data-Enabled TV Buying/Selling Approach With data-enabled TV, media buyers and sellers are able to understand more about their audience by layering first-party and third-party data over television viewing data. This way, their TV campaigns are able to more efficiently deliver against a strategic consumer target. Data-enabled TV campaigns may be purchased/sold through a variety of approaches, which leverage more advanced data than traditional TV buying. This may include a client s own first-party data, purchase and behavioral data, or audience panel verification from a third-party like comscore. There are several scenarios possible when buying/selling data-enabled TV: 2A. An advertiser or agency transacts on specific inventory through a variety of proprietary platforms belonging to a media/content company to purchase inventory 2B. An advertiser/agency chooses to work through a DSP, such as Videology, who brings together a variety of inventory sources into a single platform and can layer on advanced data 2C. An advertiser/agency works with a DSP, who then purchases inventory through an SSP or aggregator, providing an additional outlet to inventory that the DSP may not have access to otherwise 2D. An advertiser/agency works directly with an SSP or aggregator to procure inventory and reach their desired audience 3. Addressable TV Buying/Selling Approach Addressable TV at the household level relies on multiple layers of data, including an advertiser s own data (first-party), and most importantly, registration and set-top-box data. These types of data enable much more precise targeting, allowing advertisers to reach consumers at 1:1 household level. Addressable inventory provides an opportunity to eliminate waste from the advertising buy, and reach a very niche market that would otherwise be impossible to reach via traditional TV. There are several scenarios for an addressable TV workflow: 3A. An advertiser or agency works with a DSP who has partnerships in place directly with various MVPDs to provide access to the addressable inventory 3B. An advertiser or agency works through an MVPDs propriatey programmatic platform to access addressable inventory in a more automated way 3C. An advertiser or agency works directly with a distributor in order to purchase ad time from their inventory 5
6 PERSPECTIVES: SIMPLIFYING A COMPLEX ECOSYSTEM Today s TV ecosystem involves more players and more factors than ever before. But does navigating it need to be more difficult or time consuming for the advertiser, agency, or media company? Today, players on both the demand and supply sides of the industry are relying on ad technology to bring workflow automation and simplicity to this increasingly complex ecosystem. With the help of technology, campaigns can be planned, managed, optimized and measured through a single platform. In the end, these technologies bring simplified management and detailed reporting, providing greater efficiency than the days of traditional TV, which relied on manual processes, handshakes, and spreadsheets. TIM CASTREE NA Managing Director, Videology WHICH SCENARIO IS RIGHT FOR YOU? Navigating the advanced TV ecosystem and the changing media landscape can be challenging, so it s important to understand which scenario is right for you. In order to evaluate the various options, consider the following: 1. Media Objective: What objective are you setting out to achieve Brand Awareness? Sales Lift? Reach? Incremental reach? A high concentration of a strategic target? Or, are you looking to eliminate waste and only target the desired audience? Having a clear media objective will help to select which inventory is best suited to your needs, whether it is traditional linear TV bought against age and gender, or data-enabled linear TV or linear addressable. 2. Inventory: The type of inventory desired may dictate the scenario that will yield the best results. For example, private deals may require plugging into a private marketplace via an SSP, while procuring addressable inventory may require accessing an MVPD directly through an MVPD proprietary platform. 3. Workflow: How do you want to access and manage your TV inventory? Direct access between the advertiser and agencies may mean multiple sequential deals to manage, depending on how many different broadcasters or MVPDs are necessary as part of the media plan. Leveraging a DSP has the benefit of bringing all the inventory together under a single platform to improve on efficiencies of the transactions, and allows the advertiser or agency to manage different media buys against different inventory types in a single place. The two clear advantages of advanced TV are the ability to apply newly available data on television inventory, and the ability to leverage automation opportunities to improve workflow and efficiencies across media buys. As programmatic TV continues to advance, expect more developments on the advantages in the market, such as optimal media mix allocation, optimization of inventory, and possibly even media guarantees against a strategic target. ABOUT VIDEOLOGY KNOWLEDGE LAB Videology Knowledge Lab is an educational series meant to shed light on the key topics impacting advertisers and agencies in today s video advertising world. These byte-sized pieces will provide definitions, data and straightforward explanations of complicated subjects, to bring simplicity and clarity to an otherwise complicated industry. If you have questions or comments, please knowledgelabs@videologygroup.com. FOR A DOWNLOADABLE VERSION OF THIS INFORMATION, PLEASE VISIT 6
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