Across America, families still gather after dinner to watch TV. But what that looks like today is very different from what it was just a few years back.
Certainly, the big-screen TV is still the hearth of the living room. But the programming is as likely to be delivered via an over-the-top (OTT) service like Playstation Vue as it is via a pay TV set-top box. And even if it comes via cable, chances are its being time-shifted or watched on-demand. Everyone probably has their smartphone within reach and might even be catching “micromoments” as their favorite show is playing or using it to check out what else is on or what their friends are watching.
With all this cord-cutting and OTT viewing, TV’s share of media budgets has shifted. This year, according to eMarketer, total spending on TV ads will slip 0.5 percent to $69.87 billion. As a result, TV’s share of total U.S. media ad expenditures will drop from 33.9 percent in 2017 to 31.6 percent this year.
Does all this mean people are watching less TV? Hardly. But how advertisers reach them as they’re watching on all the different platforms is going through a seismic overhaul.
The end of demos
For 60-plus years, TV inventory was bought and sold using age/sex demographics. If you wanted to reach, say, the much-desired 18-49 demographic, you bought Friends instead of Murder, She Wrote. Younger female viewers? You’d look for a show with strength in women, 18-34. It was that simple.
And that’s wasteful. If you were an auto company, you couldn’t be sure your ads were going to people who are in the market for a car, much less affluent families actively shopping for a luxury SUV.
That era is over.
TV has entered the digital age. Instead of buying demos, advertisers can now target specific audiences. And that digital targeting is being bolstered by the TV networks themselves. Last year, for example, Fox, Turner and Viacom (and now NBCU) joined together to launch OpenAP to deliver cross-platform targeting and advanced audience data sets. This way, a buyer can construct its own audience needs—two-income families looking for a luxury vacation—and make buys on the shows that deliver that specific segment.
Then there’s targeting technologies like addressable TV. Again, using data, buyers can create their own audiences. And then via addressable—delivered via a set-top box or OTT service– they can target that ad only to those households who meet those criteria.
And like typical digital buys, third-party data sets can add depth and breadth to this targeting. For instance, location data can be leveraged to get a sense of specific audience behaviors (go to movies, dine at certain restaurants, visit amusement parks) and build that into targets to get real-world actions into the buys.
Goodbye GRP
The back-end of demos has been the gross ratings point—the traditional currency programmers and advertisers used to estimate audience size, establish ad rates, and ultimately determine if the results matched the promised target.
But that’s not enough any more. Viewership is fragmented. Are people watching live, on-demand or time shifted? Are they catching the show on cable or OTT? Is it being watched on a smart TV, smartphone, laptop or tablet? Is it being seen in the living room or while standing in line at the bank?
Media companies have changed what they’re delivering. Just last month, NBCU introduced CFlight, a unified advertising metric to measure live, on-demand and time-shifted commercial impressions within episodes of its shows on every viewing platform. It’s a composite score developed from independent, third-party sources including Nielsen, ComScore and Moat.
What’s important is that it treats linear and digital viewing equally.
Cross-platform advertisers need to go a step further to get a clear view of the impact of every part of a campaign and attribute it accurately so they can calculate actual ROI. So where in the customer’s journey was an ad seen and how did it affect the actual purchase?
This requires a more holistic view of customers and their behaviors. And those actions take place across a range of platforms. Again, real-world actions play as much of a role as digital actions. So many advertisers are turning to location data to determine whether a campaign, say, drove customers to a store and what their actions were once they got there. Campaigns can then be optimized based on those results. TV’s contribution can be seen as strongly as other digital platforms.
The bottom line is that TV isn’t dying a slow death and cord-cutting doesn’t mean people are watching less. It’s just evolving into something new and more powerful with a data-driven backbone.
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Antonio Tomarchio (@tonytom82) is the founder and CEO of Cuebiq.
