What History Tells Us as T/V Moves From Closed To Open Distribution System

The dramatic shift in the way T/V (television/video) is distributed is driven by the explosive, Internet-enabled capacity to deliver television and video programming and advertising beyond the closed and proprietary channels of distribution that have contained it for years.

 

Over–the-air network broadcast bands were assigned and regulated by the federal government as traditional television reached critical mass in the early 1950s. All revenue to pay for content came from advertising. Because only ABC, CBS and NBC and their affiliates were authorized to provide and distribute commercial programming through the public airways (Fox came on board in 1986), the revenue model was very profitable. Demand for advertising dramatically outpaced the supply of available ad inventory over time, even as ad-loads increased.

Cable systems emerged in the 1970s/80s. Though available ad inventory expanded, the lower ratings of cable maintained a favorable supply and demand equation for the old and new networks, as new advertising dollars poured in with a lower out-of-pocket cost of entry. The system was expanding, but was still quite closed. For networks to reach rural areas where the cost of laying cable was exorbitant, consumer satellite delivery services DirectTV, Dish and Echostar were launched in the 1990s.

In the early 2000s video content began to be distributed through streaming Internet services, and as bandwidth and Wi-Fi capabilities expanded, the closed system for TV began to open up to the expanded, open version that I call T/V (television/Video). Companies like Netflix, Amazon Instant Video, Hulu, Roku and Apple TV arrived as new producers/distributors/curators of long-length content.

For now, Hulu is the only major service that sells video ads. Google’s YouTube is the giant of short-form video streaming and user-generated content, with a prolific base of advertising. And now the likes of HBO, Showtime, CBS, Dish, Viacom and even possibly the NFL are breaking ranks with the traditional distribution systems through expanded streaming services.

So what can we learn from recent history in this and similar sectors where distribution channels have opened?

Successful companies are those who can manage change and best serve their customers. In the long term, three things should separate the winners from the losers:

1.  Focusing on the consumer and continually improving utility, speed, user experience and convenience (and possibly design, a la Apple).  T/V providers should look at what music and streaming “radio” entries Pandora and Spotify are doing: taking what consumers most want (music) and using a freemium model (free with ads, less or no ads with a subscription). Even with ads, the clutter factor is much lower than terrestrial radio or linear television demands of consumers.

2. Having no fear in passing along efficiencies and improving the buying experience for consumers. T-Mobile and Sprint are doing this and disrupting the telecommunications sector. We all saw the pit that the music industry fell into when it tried to overprotect its non-digital (records/CD) profit margins. A little venture called Napster met consumer desires so dramatically, the music business is still trying to recover.

3. Inventing, developing, licensing or buying next-level technology and business opportunities. ABC bought ESPN, Comcast bought NBC, and the applied synergies have put their sports programming franchises in a very strong position. And it’s not all acquisitions; we are now in an age of frenemies and co-opetition as shown by the many merchants who partner with Amazon to grow their business. There are also many smart and capable programmatic advertising tech companies and exchanges ready to bring new ad buyers and buying process efficiencies to T/V.

Posted in Ad-supported TV, Advanced Television, Advertiser, Advertising, Broadcast networks, Cable TV, Connected TV, Digital Video Recording, History of Broadcast Advertising, Interactive TV, Purpose, Ratings, Satellite TV, TV Business Model | Leave a comment

How Viewers, Advertisers See The Current State of T/V (Television/Video)

As the curtain lifts on 2015, here are a few observations on our business filtered through the various stakeholders of T/V (Television/Video). T/V is the term I’ve been using for “un-siloed” consumption of content andadvertising by video viewers across both traditional linear television distribution channels/devices, as well as online/mobile channels and devices.

Critics believe in T/V. With non-traditional distributors of television taking seven of 11 categories of awards at Sunday’s Golden Globes (I include HBO now that the network has “gone television rogue” with its plans to unbundle HBO GO), the most acclaimed new T/V shows are no longer found on linear television platforms.

Best TV Comedy or Musical: “Orange is the New Black” (Netflix)

Best TV Drama: “The Affair” (HBO)

Best Actress, TV Drama: Ruth Wilson, “The Affair” (HBO)

Best Actor, TV Drama: Kevin Spacey, “House of Cards” (Netflix)

Best Actor, TV Comedy: Jeffrey Tambor, “Transparent” (Amazon)

Best Actress, Miniseries or TV Movie: Maggie Gyllenhaal, “The Honorable Woman” (Netflix)

Best Supporting Actor TV Show, Miniseries or TV Movie: Matt Bomer, “The Normal Heart” (HBO)

Advertisers still believe in television, but are thinking more digitally. In June 2014, eMarketer noted that “digital video advertising in the US is increasing at an eye-popping rate, but TV ad spending will still outpace digital video in dollar growth in 2014… Digital video ad spending will increase 41.9% this year, reaching $5.96 billion, while TV advertising in the US will grow 3.3% to hit $68.54 billion.” While no one ever got fired for buying network TV, I expect moves by some major marketers and agency groups such as Omnicom will set the stage for even greater shifts from traditional television to the broader T/V marketplace by the end of 2015.

Viewers believe in choices. Live or near-launch viewing, especially sports? The choice is cable/broadcast television. Binge-watching high quality content or anything on demand? OTT providers like NetFlix, Amazon, Hulu and HBO GO. Miss a live event? Get replays or highlights on tablets or smartphones via ESPN or the many entertainment sites. With way more choices than a consumer could ever find time to view, cable seems like a way overpriced way to get T/V. But is it really less expensive,in terms of both cost and convenience, to unbundle? So what if the T/V media business is in flux. What a time for consumer choice!

Everyone in the ad sector is wondering if they can believe in programmatic T/V. Both the agency and advertiser side are looking at programmatic T/V as a way to get the best of digital accountability with the sight sound and motion capabilities of television while scaling across multiple platforms. Online and mobile publishers are competing for T/V dollars with video offerings where demand now exceeds supply. Traditional networks are monetizing content outside the traditional living room screen. It seems everyone is exploring complementing their lucrative direct sales with programmatic of some kind (private marketplaces, or PMPs, to begin with), opening to a global ad marketplace while adding a streamlined, less labor-intensive way of taking, processing and delivering orders. While issues like comparative measurement, non-human traffic and viewability are being worked through, the programmatic T/V sector is a lively and exciting arena that is growing fast and should continue its ascent this year as demand outpaces supply.

2015 looks to be a vital year where T/V has never been more popular or accessible to viewers, and it’s never been easier to increase T/V revenues on the supply side, or to implement a strategy with more measurement and accountability than ever before on the demand side. Executional efficiencies in the buying/selling process are there for the taking for those open to riding these waves of change. I’m thinking that this is the beginning of a new Golden Age — not of television, but of T/V.

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Past Media Timelines Suggest Streaming VOD To Surpass Linear TV In Five Years

Editor’s note: This post was first published earlier this year, but (very slightly edited) it’s still a timely analysis and look forward, good for year’s end.

It’s been said that those who ignore the past are doomed to repeat it. Earlier this year, in  “New Challenges Chip Away at Cable’s Pillar of Profit,” The New York Times’ David Carr opined that cable and satellite distributors’ strategy of bundling television programming is facing multiple challenges. He cites Netflix’s forceful letter to investors (meant for regulators) against the Comcast purchase of Time Warner Cable, HBO’s decision to sell some archival programming to Amazon Prime streaming service, and a Millward Brown report that screen time on phones has now surpassed screen time on home televisions.

This got me thinking about the accelerating speed of change in the way media consumers adapt to new mass communication models. Based on the sources cited at the end of this piece, we can see that the timelines for mass adoption of various new forms of communication over the past two centuries have become shorter and shorter. For the purpose of fair comparison, I’ve begun timelines based on the year when infrastructure for mass communication was reasonably in place to a point when an estimated 70% or more of U.S. households had access:

The Telegraph: Samuel Morse developed Morse Code and built the first telegraph system in the U.S. between Washington and Baltimore in 1848 with Congress’s financial help. By 1863 Western Union had finished its transcontinental telegraph line and by 1866, its network included about 100,000 miles of wire and its capital stock value was in excess of $40 million (1). Total timeline: 18 years. (Please note, the medium was developed around local central telegraph offices rather than connected to homes, as were other examples below).

The Telephone: Alexander Graham Bell won the first U.S. patent for his device in 1876 (though earlier inventions in Italy and France preceded it), and by 1880 almost 49,000 U.S. phones were in use. In 1948, the 30 millionth telephone (1) was connected in the United States, accounting for about 71% of U.S. Homes (2). Total timeline: 68 years.

Radio: In 1897, Marconi received the first British patent for radio, which at first was a wireless telegraph system. The technology for radio was developed through the First World War, after which (1919) Marconi’s resources were sold to GE, and the Radio Corporation of America (RCA) was born (1). By 1939, nearly 80% of the United States population owned a radio. Total timeline: 30 years.

Television: 8,000 U.S. households had television sets in 1946, and 56.5 million (1) or around 70% of U.S. Households had them by 1958 (3). Total timeline: 12 years.

The Internet: Though the ARPANET first functioned among a small group of computers as early as 1969, the development of IP (Internet Protocol – late 1970s), a domain name service (1984), the World Wide Web (1991) and browser (Mosaic in 1993) allowed for 150 million users worldwide — almost half in the U.S., or 71% of homes — to be connected by 1999. (1)  Total timeline: eight years.

For traditional TV (television) to transform from a linear, ad-supported mass medium that encourages ad avoidance on a single, in-home platform into T/V (Television/Video) — a two-way medium that everyone can access wired or unwired, across all kinds of personal, portable and/or shared platforms, on-demand at any time of day — may not be the slow-moving evolution that many expect. Carr’s Times piece takes a snapshot of a few weeks in the life of this evolution/revolution. If you look at other major mass media timelines, it seems to me that the infrastructure is now in place to reasonably suggest that no later than five years from now, the traditional ad-supported business model will be a shell of its former self.  Digital, on-demand, interactive, non-linear T/V that reports viewability, where advertising is programmatically and directly purchased across many viewing platforms, will be here in a big way very soon.

You may question whether TV and T/V are just two faces of the same medium. If so, please consider that the telegraph was improved to be wireless and became à radio, which was improved to be visual, and became à TV. The Internet was born at the same time that TV had begun to explore two-way interactivity through cable connections. The bold new idea then emerged: the convergence of broadband Internet delivery and interactivity with à the news, information and entertainment power of television. And here we stand at the edge of another leap forward.

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Automating Traditional Television Buying Process: Why? Why Now?

In the same week that the ANA named “programmatic” marketing term of the year, a product is being launched that aims to simplify the process of making traditional, linear television ad buys. IPG Mediabrands’ MAGNA GLOBAL agency, the media software company eMediaTrade, and network partners NBCUniversal and Viacom Media Networks are debuting AdCore OneView, “a central cloud-based repository of buying costs and specifications for each transaction,” according to a press release.

Since I have a background on the buying side but now live in the world of programmatic consulting, where programmatic TVpromises to simplify the labor intensity of television selling and buying through open exchanges, private exchanges and direct deals, I was curious about the benefits of this new product. And why a traditional TV solution now, when so many tech companies like TubeMogul, SpotXchange, Turnand others are introducing programmatic platforms for television?

I asked Ellen Weinstein, vice president of business development/professional services at eMediaTrade, for a demo of the platform. I also spoke with Janice Finkel Green, executive vice president of buying analytics for Magna, about how her agency intends to get buyers to embrace the new process. She suggested that because buyers basically designed it in tandem with eMediaTrade, it is being received as a “light at the end of the tunnel” of labor-intensive manual TV buying.

My impression is that this new tool brings some definite improvements to the legacy buying process:

1.     Because it sits between buyers and sellers in the cloud, and both the buyer’s RFP and the seller’s proposal are uploaded onto the platform, everything exists in the same location: accessible, organized and easily referenced through user-friendly dashboards for each side.

2.     Buyers can call up proposals on an analytical dashboard where they can evaluate them side by side along with uploaded Nielsen, Rentrak or other first/third party data. Since no re-inputting is needed, inefficiencies and the more error-prone steps in the traditional process are eliminated.

3.     A shared screen function allows the buyer and seller to look at the proposal together and discuss/negotiate through text bubbles on the side of the screen, which are stored for reference.

4.     When the buy is approved, EDIs are sent to the agency, accepted and easily uploaded into the agency’s accounting system.

5.     “As Run” activity is then uploaded daily from the networks, catching discrepancies and keeping real-time modifications to the schedule in one place.

Why it matters now

Two things are clear as content providers, advertisers, agencies and online video tech companies determine how programmatic T/V (Television/Video) will happen in the legacy television space as well as in the digital publishing space.

First, whether for cable, satellite, streaming T/V or independent video ads running instream or outstream on publisher sites, there will always be a market for direct buys. Brands will always be willing to pay more for context, time placements, brand safety and sponsor-style involvement with trusted media sellers.

Second, linear television networks will move slowly and carefully into programmatic buying, and will likely avoid open-exchange RTB-style buying platforms. The initial interest over the next five or more years will be in the multi-named processes that includepremium programmatic, private marketplace (PMP), automated guaranteed, unreserved fixed rate, programmatic guaranteed, programmatic direct, programmatic reserved, preferred deals, private access, first right of refusal, invitation-only auction, closed auction, buying with deal tags, etc.

So it makes sense that now is the time for television buyers to learn how to work with two-way dashboards where buying specs are input and matched with appropriate offerings from a menu of specific and transparent media suppliers and programming. This kind of step is necessary for television and video buying to move out of their silos into a unified marketplace for T/V (Television/Video).

So kudos to all of the parties who’ve invested in and contributed to the launch of AdCore OneView. By cutting back buyers’ and sellers’ hours of manual creation, inputting, re-inputting, and dealing with discrepancies, there will be more time for strategy, cleaner executions and the important work of navigating the right pathway to programmatic T/V.

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What Will It Take For Television Networks To Go Programmatic?

Traditional television (TV) is a now a subset of T/V (television/video). Advertisers no longer have to rely on legacy TV to achieve their media objectives. Multiple delivery systems are used by advertisers across multiple devices to get the message across with sight, sound and motion, following prospects/customers across the times and vehicles where they consume media all day/every day.

Traditional print publishers now sell video ads on mobile and online platforms, and radio stations have websites with video. YouTube is television for the next generation. Medium- and long-tail content creators unheard of 10 years ago now distribute video over the Internet. The walled television garden — complete with surrogate-demo targeting, program ratings representing  ad viewing, and over-cluttered ad pods that send viewers away — is now leaking ad dollars. T/V is already a unified ecosystem. And now programmatic T/V appears. Will it support or threaten traditional television providers?

If you are a cable or broadcast television exec or manager who made it through the last two paragraphs, congratulations! By not evading the discomfort of change, and facing the threats to the way things have been (where wonderful and lucrative careers have been made), you now get a chance to consider how to turn the challenge of programmatic T/V into an opportunity.

How to Get There?

Embracing private- vs. open-market methods. Because the television networks were built on a closed distribution system, going to a completely open system makes no sense. In the online world, premium publishers still sell directly to big-budget brand advertisers that care about brand safety. Hybrid approaches to programmatic buying/selling have gained a lot of traction in the past year, and come under many different names: premium programmatic, private marketplace (PMP), automated guaranteed, unreserved fixed rate, programmatic guaranteed, programmatic direct, programmatic reserved, preferred deals, private access, first right of refusal, invitation-only auction, closed auction, buying with deal tags, and more.  Mutual transparency and assurance of the environment translate to premiums for media providers. Is there a safer environment for video than the TV networks we all grew up with?

Streamlining the logistics of buying T/V. If programmatic is, as I heard recently, “buying media without insertion orders (IOs),” then the system dramatically improves on those cumbersome methods: requesting proposals, reviewing them, negotiating, going to order, processing the IO, inputting IOs into another database, scheduling the ads, verifying, reporting, and finally billing. As always, automation drives overhead cost reduction.

Disciplined pricing. With pricing floors an integral part of the programmatic process, there is no need to lose control of the value of inventory. Search has proven that when there is high value to an ad placement, competition for those dollars can dramatically increase pricing and profit margins. It is important to remember that programmatic does not equal RTB (real-time bidding/buying). RTB, generally understood as a process of open bidding for inventory, is a subset of programmatic.

Tapping new markets. Traditional television always had a minimum entry price point at the national level, so the largest advertisers ultimately comprised the client base. With premium programmatic, there is still a walled garden of ad supply. If the demand side expands to everyone with a budget, good things are bound to happen for media providers, since strong demand has always been key to television’s premium pricing. Also, the buying pool is becoming global: Big-budget international advertisers can now line up in the programmatic queue for U.S. television inventory as never before.

Embracing the business of accountability. Among the reporting standards offered in the online and mobile sector that advertisers find helpful: viewability, time spent with an ad, behavioral targeting, addressability and engagement. The same dashboards used for buying digital ads offer further refinements that allow the buyer to manage how, where, by whom and when ad messages are seen. It’s time for TV to get on the dashboard! There’s no other option for television providers but to move quickly to a census-based (vs. sample-based) audience currency, and embrace programmatic, in order to compete at all.

In the end, while the ad-supported T/V marketplace’s expansion has created new challenges for those in traditional television, the smart and courageous will not just survive, but thrive in the emerging direct/programmatic landscape.

Posted in Advanced Television, Advertiser, Advertising, Broadcast networks, Cable TV, History of Broadcast Advertising, TV Business Model | Leave a comment

The Human Side Of The Shift to Programmatic T/V (Television/Video)

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” — author Upton Sinclair

This quote, as single-gender as it was in the early 20th century, captures one of the most powerful barriers to change: the human desire for stability and predictability in our life and careers. When forces like automation and competitive innovation threaten the value of all the knowledge and expertise any one of us have built up over time, it’s not unreasonable to feel a threat to our livelihoods.

Technological change and competitive pressures have driven change at an ever-increasing rate over our lifetimes. Is the world then actually passing us by? Will we no longer reach our financial and career goals, as others more experienced and trained in the newer innovations take our place?

Programmatic technology and targeting are certainly making the digital video side of the business, with its benefits of targeting and accountability, more attractive to advertisers. Traditional television budgets are already starting to shift to online video. In response, programmatic technologies are now coming to the traditional providers of linear television.

And yet the existing business models that continue to make television and video so profitable still need to be attended to. Should we hang on to the bitter end until the existing business models collapse, or jump into a new career track and start over, probably at a lower salary?

And where will we find the time, focus and energy to just stay current, let alone gain the kind of expertise we will need to excel in the next wave of programmatic and targetable T/V?

For those who work in traditional television or digital, in sales or media planning and buying, in advertiser marketing management or in legacy media or distribution companies, I recommend the following:

1.     We are what we think we are. Find ways to banish the self-protective thinking that prepares us to struggle with and/or avoid the changes, rationalizing reasons why what we have to bring to the party will be irrelevant. Any change will require transition from the old business model to the new, and those that can bridge that transition will be more valuable than those who only understand the new or stay immersed in the old.

2.     Love learning. Every industry association has training sessions and committees addressing the issues that new technology brings. There are neutral outside teaching individuals and groups as well. Business schools offer professional development, online if not in person. Google them and ask around. Pick an area of growth that stirs your passion. Suspend that inner judge that tells you what you cannot do. Just imagine what you’d really love to be doing three to five years from now if everything you hope for comes true. Focus your learning efforts on that vision, and allow that learning to fulfill you.

3.     Make reading time a part of your job. The many B2B online publishers that track the older and newer industry sectors are pumping out pieces revealing daily incremental change. This is more important than that extra administrative meeting on the schedule, so put first things first.

4.     Go to conferences and meet the change-makers. Industry associations and B2B media publishers hold frequent conferences on horizontal and vertical topics of change in ad-supported media. Both presenters and attendees are just like you: trying to gauge the next right move to benefit from the many new ways of doing things. Get to know them and be part of it all!

5.     Write an article. Trade publications often invite industry voices to share their ideas and opinions through articles distributed across the industry. Getting your voice out there lets others know your interest and commitment to the business, with the fringe benefit of the hyperlink you can share with current and future employers and customers. You don’t need a Ph.D. to write an interesting thought piece.

More than anything, successful businesspeople are change-surfers, catching a wave of change. We’re all uncomfortable beginning something we haven’t yet mastered, yet success is measured by the risk inherent in doing just that. And don’t forget to enjoy the pure pleasure of learning along the way.

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T/V Multitaskers: Positive Or Negative For Advertisers?

As a planner and buyer of media, I was often concerned about the loss of potential television advertising impressions to viewer multitasking. After all, by the late 1990s the traditional networks (broadcast and cable) had so over-cluttered the programming environment with ads, and longer-length pods of ads, that it was clear that viewers were actually trained to avoid them. Furthermore buyers weren’t able to buy against commercial rating impressions, but only program ratings. I still regret not having done more to challenge the buying model and constantly increasing commercial loads when television was the only game in town.

When the Internet arrived with its unbridled offering of content to search and surf, the chance that T/V (Television/Video) consumers would stop and engage with an advertiser’s message at scale was further compromised, and became further based on hope. What other buying model besides gambling and day trading rests so much on hope?

2014 IAB Research Analysis of Prosper Insight Data for Media Multitaskers provides some intriguing information about an important segment of today’s media consumer base.

—      Media multitaskers are those who regularly go online while watching TV.

—      Compositions are higher than general population for 18- to 34-year-olds, females, African-Americans, renters and singles.

—     Media multitaskers are much more likely than the general population to surf the internet, use social media, check email, play video games, view video/TV online and listen to online radio. They are heavy digital media users.

—      Media multitaskers report they are above-average regular watchers of online video ads (65%) and mobile video ads (50%).

—      51% of young (18-34) adults regularly go online while watching TV, a 119 index to all adults.

—      90% of young (18-34) adults occasionally or regularly go online while watching TV, a 110 index to all adults.

—       Media multitaskers report that they are just as likely to watch broadcast and cable TV commercials as the general population, while reporting being influenced by them at the same or greater level.

·–      When asked how often they watch an ad that a website plays before video content, 59% of media multitaskers and 51% of the general adult population reported that they watch these pre-rolls regularly or occasionally.

Because digital T/V (unlike analog) brings measurability to consumer media actions and behaviors, advertisers no longer need to overcompensate by throwing enormous numbers of ads up against the consumer wall, hoping something sticks. T/V advertisers are now drawn to and pay premiums for pre-rolls because the viewer clicks to start the ad, with measured completion rates sometimes upwards of 70%. There are also many tech and research companies now measuring time spent with video ads as a dimension of ad effectiveness (ad starts/ad completions/% completed, etc.).

So is Multitasking good or bad for video advertising?

·       Plus: The overall amount of consumer time spent on ad-supported media increases with multitasking, and represents a higher proportion of online video ad viewers. Minus: Second screen media use doesn’t necessarily include ad viewing, and doesn’t explain the role or motivation of continued ad avoidance.

·       Plus: Because the added media usage for video is digital, there are stronger engagement metrics available for both display and video formats. Ads can be more targeted and measured, creating efficiencies. Minus: It seems that advertisers now need to buy incrementally more media, to increase the chance that a potential ad impression is seen in a more fragmented distribution system, where half the users are multitasking.

·       Plus: Multitasking viewers are no longer being “held hostage” to advertising, because they’re spending time with the content they most want. Minus: Scattered viewer attention reduces the chance of a placed video ad being seen.

·       Plus: Because 18- to 34-year-olds are leading the way in media multitasking, they are still a minority (31%) of total adults, and can become the laboratory for learning and developing new approaches to ad-supported video. Minus: The time frame for movement from younger, early media adopters to mainstream is shorter and shorter in the digital age.

·       Plus: Based on the research above, media multitaskers report that they are seeing ads and are influenced by them. Minus: Self-reported behavior is not necessarily real behavior — how does one really measure how one is being influenced? More behavior-based measurement is needed to truly understand what is gained and lost from multitasking.

I hope to see industry leaders pursue more behavioral, multiplatform research on the more granular effects of media multitasking, so advertisers can better understand how to approach engagement with these elusive media lovers and their fast-shifting attention spans.

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Going Beyond ‘Click-To-Play’ For Mobile Video Ads

Buyers and sellers of online video advertising have been expanding the scope of T/V (Television/Video) ad messaging from the “click-to-play” constraints of pre-roll and mid-roll “instream” formats to “outstream” formats that run within non-video environments in either an “auto-play” or “view-to-play” manner. Things have been changing rapidly in the mobile video sector as mobile publishers and tech providers look to bring these newer online video formats into the mobile ecosystem.

Beet.tv presented a summit this month at Mindshare presented by eBuzzing & Teads on “Life Beyond the Pre-Roll”. (Full disclosure: eBuzzing & Teads is a client of the writer’s consulting business). The half day conference aggregated different publisher and advertiser/agency points of view on these new ways of expanding video ad inventory online and in mobile by running ads “outstream”. If “instream” is the method of attaching T/V ads to online video content, then “outstream” formats place T/V ads independent of existing video content, such as between paragraphs of text articles, blogs, comments sections, photo galleries and home page content blocks.

Outstream ads solve a problem for publishers and advertisers alike. They increase the available inventory so advertisers can shift dollars more definitively from traditional TV and User Generated Content (UGC) pre-roll to premium publisher sites unencumbered by the need to wait for a user to click-to-play. Advertisers now can buy quality inventory with guaranteed viewability at scale, since a great deal of pre-roll avails at premium publisher sites are sold out.

The new online outstream formats are largely not click-to-play – some are auto-play, which have a bad reputation in the ad-buying community because of the potential that the ads will run off-screen and out of view.  The most sophisticated of these new outstream formats use view-to-play, which is a kind of auto-play tied to the structure of the web page so it only plays the ad when within view of the viewer/reader. When the video ad scrolls out of view, it pauses/stops. When in view it runs. In that way, the % of ad that is viewed is captured within the reporting metrics, and ads that don’t run either the minimum or contracted amount of time with the majority of the unit’s pixels in view are not counted against purchased impressions. In my mind, this is the only way a video ad should be purchased with any kind of auto-play technology, and the only kind that should be carried by publishers who care about their users’ and advertisers’ experience.

There are still some challenges though as universal mobile video outstream ad acceptance has been limited by differences in auto-play policies on mobile operating systems.

Unlike online streaming video advertising which runs over hard or Wi-Fi internet connections, consumer mobile plans often have limits on the amount of gigabytes used in a month. For many years this steered the industry away from mobile video. Some publishers tried to solve this by making all outstream video ads click-to-play, creating the same limitations on inventory that online pre-roll does, or by focusing on in-app which also limits scalability.

Now that it is possible for publishers to only deliver view-to-play ads on mobile web when the user is on Wi-Fi, demand for outstream units on mobile has been kick-started, leading us to a new challenge. Different operating systems on different devices have varied policies on anything that looks like auto-play, so much so that view-to-play has not yet seen universal acceptance across operating system platforms.

Of the two dominant mobile operating systems, Google Android, which is much more open to outside developer work than Apple, has benefited the most from this new demand because it allows publishers to employ view-to-play technologies on web app sites.

Apple, which is more restrictive around outside development, can allow web app view-to-play on iOS tablet platforms, but does not allow it on iOS for iPhone. This presumably is because of the data plan issue which would be more prevalent on iPhones. With Facebook’s wide use on iPhones, and expansion into video ads running between posts online, perhaps Apple will reconsider its iPhone restrictions. On the other hand, Apple may want to keep it within the walled garden of its own iAd App Network, which is consistent with how it approached the changing business model for music with iTunes.

I love that innovation around the traditional television ad has exploded in ways that now give us an emerging T/V (Television/Video) ad-supported marketplace, fueled by the distribution miracle of the internet. Here’s hoping the big players within the ecosystem that helped bring us here can continue to be creative and open-minded and drive more of the brilliant ideas that got us here.

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Brand Safety Tips For ‘Wild West’ Of Multiplatform, Internet-Distributed T/V

MediaPost’s Wayne Friedman quantifies the early shifting of budgets to online video in his recent article on this year’s decline in cable as well as broadcast upfront ad spending. Online video accounts for approximately 7% of the total T/V nut ($5 billion of $70 billion total) and is poised for multiple-digit annual growth. So if television dollars are moving to Internet distribution and portable platforms, how will brand safety be maintained while ads potentially land everywhere and anywhere a viewer can find content?

One of the reasons the majority of T/V ad spending still goes to traditional broadcast and cable networks is that they are closed systems where the range of programming environment is finite, and are often organized around neat environment labels (Travel, Food, Women’s). Networks also give planners and buyers more control through direct deals with only known entities within the traditional television space, rather than having to deal with the infinite number of Internet sites out there. These are brand safety issues.

The term “brand safety” can conjure up fears that an ad buy will end up on porn or scam sites. While brand safety strategies address those extreme situations, the concept more importantly includes ensuring that the ad is seen, that it is seen in environments that the buyer approves, that it will not be placed on sites outside of that “white list,” and that sellers stay open to third-party verification.

We are seeing more and more frequent use of the phrase “premium” by sellers and buyers to identify the sub-sector of T/V online and mobile advertising defined by known, high-quality sites and apps that will support a positive and quality brand positioning. But it takes more than slapping the word “premium” on a content site to insure brand safety.

So here are some tips for planners, buyers and publishers that can help ensure brand safety as budgets continue to move to non-traditional, non-linear T/V:

Insist upon transparency: Ensure that there is enough budget and inventory purchased through direct buys and private exchange buys where the site list is known to the buyer.

Use Media Rating Council (MRC) accredited publishers and DSPs (demand-side platforms): This will assure minimum video viewability standards. An ad not seen is an ad that shouldn’t be paid for — if it is, that is not brand safety.

Use third-party verification services: Spot check campaigns or flights purchased through DSPs and directly with publishers via third-party audit verification.

Don’t avoid programmatic buying: Find DSPs that guarantee transparency of sites, even for “white list” or “walled garden” buys. Use private exchanges rather than blind, open programmatic marketplaces designed to drive CPMs down.

Consider CPCV (cost per completed view) metrics: CPMs don’t need to be based on minimum viewability; now maximum viewability buys are available. Paying premiums to buy ads that have been fully seen by site audiences renders all partly completed ads as gravy. There are no such minimum or maximum viewability assurances with traditional television.

Don’t focus only on CPMs: It takes a lot of resources to produce premium content 365 days a year, and advertisers need to be willing to pay higher rates for advertising that meets brand safety guidelines. I believe publishers needn’t fear the increase in video inventory will diminish their revenue, if they are willing to bring integrity, transparency and brand safety to advertisers.

Stay interested in contextual targeting: As the technology gets stronger, seek ways to use contextual targeting to avoid having negative placements (automotive ads on article pages about car crashes) and to seek out environments where the brand is fully supported (automotive ads on article pages about the value of car ownership).

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How Cross-Platform Video Plans Can Optimize Reach Today

One thing that hasn’t changed since the days of traditional media planning and buying is that adding a different media type almost always increases reach. Before digital, there was extensive research available not only on the dynamics (including frequency distributions) of adding magazines to a television plan, or radio to a magazine plan, or out-of-home to any plan, but even in adding new dayparts to a television plan. The menu was pretty simple compared to today, and yet it was the analysis of incremental reach that always drove the determination of the optimal media mix.

Yesterday I ran across a sponsored advertorial piece that included the question “How do you calculate digital reach and brand impact from moving TV dollars to digital video?” I often think of myself as too sophisticated to “fall for” sponsored content, especially in the B2B publications where I am targeted, but this question was too intriguing to resist.

It offered a summary of, and link to, research that Nielsen and YuMe, the video technology company, conducted regarding the effects on reach of different allocations of spending between TV and other digital video platforms.

The results put some numbers to what many of us intuitively know: that online and mobile video platforms have drawn audiences away from traditional television. To reach these audiences, advertisers must add these platforms into the final mix. This was shown to be particularly true among the Millennials and male Millennial-age audiences:

— Men 18-34: Shifting 10% to 30% of a television budget to digital video (online, mobile, tablets, connected TV) increases plan reach between 6% and 11%.

— Adults 18 – 49: In this key demographic, 10% to 30% in reallocation from a television budget to digital video increases reach between 4% and 5%.

— There is even a calculator that shows how reallocating mid- and larger-sized budgets works in reaching younger, male audiences — while that approach is not as effective for women 25-54 targets.

Why is this important? Without verifying the methodology or digging too deeply into the data, the introduction of this kind of research and these kinds of tools provides hope for media planners and buyers. Even before a “perfect” or “consensus” cross-platform GRP is agreed upon with the kind of reach curves that have long been used to evaluate media mixes, there is now real research data that can support and quantify that shifting money from traditional television to new video platforms is smart business.

I’ve heard it said that nobody ever got fired for buying network television, which might explain why the response to the growth of mobile and online video advertising has been slow from the demand side of the business. With more and more parties like YuMe and Nielsen investing in research and trying to understand how viewing pattern changes translate to changes in audience reach, doors will be opened for reaching brand prospects with the right T/V (Television/video) message in the right place and time.

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