When we refer to data driven TV, we are referring to the video viewing experience ..... management platforms) or using t
DATA DRIVEN VIDEO
WHAT WILL IT MEAN TO THE FUTURE OF VIDEO
OVERVIEW The purpose of this paper is to educate the reader as to the current state of video and television buying as elements of the digital world weave their way into the traditional world of television and online video becomes a mainstay of marketers’ media plans. We will also project, based on current media and technology trends, what the video experience will be for consumers in the near future. Definition When we refer to data driven video, we are referring to the entirety of the video viewing experience across multiple platforms. When we refer to data driven TV, we are referring to the video viewing experience specifically on a television set. Until recently, marketers have accepted that the largest ad medium, television, was not technically capable of delivering the same type of targeting as they have come to expect in the digital advertising world. However, as greater budgets have moved to digital and the narrowband world of banners begins to twilight, the video ad unit is increasingly top of mind with brand marketers. In fact, digital video not only brings data targeting and the same sight, sound and motion impact of television, but also adds the benefits of interactivity and greater measurability. Given the real threat of dollars moving away from traditional TV networks and MVPDs (multi-‐channel video programming distributors), the television world has been making strides in being able to deliver similar types of targeting for marketers. Currently, the majority of inventory available for targeting on data driven TV is at the Local level or “TV Everywhere” app level. There are several factors occurring simultaneously that are driving data driven video and addressability to the forefront of the advertising world’s agenda: • Online video usage continues to rise
• Just as the growth in Internet consumption was bottom-‐up driven, consumers are the force driving the change in video media consumption, adding external connectivity to their existing television sets or purchasing sets that are natively connected to the Web. (Roku, Amazon Fire TV, AppleTV, XBOX 360, XBOXOne, PS3/4, Chromecast, Connected TVs aka Samsung SmartHub, and Connected Blu-‐ Rays). The Amazon Fire TV was the top selling gift and fastest selling product ever on Amazon.com in 2014. These devices are not only more ubiquitous in households, but they are actually being used for video viewing. Video ad views on connected TVs grew by 208% year over year (FreeWheel Video Monetization Report, Q3 2014).
• A small, but growing number of consumers are cutting the cord (or never starting with cords) meaning that they are no longer subscribing to traditional video services from their TelCo or Cable Company and are getting video from alternative means via Over the Top (OTT) solutions. Over the next 12 months several virtual MVPDs will launch providing lower cost options or different bundling options for consumers to subscribe to live and on-‐demand broadcast and cable programming, along with new IP-‐only video channels. These virtual MVPDs include Playstation Vue, Verizon FIOS TV using OnCue technology, and Sling TV from Dish Network.
Percent of Total TV HH
1.5
2.6
30.8
31.5
30.4
29.9
7.8
9.2
10.9
11.6
51.9
50.0
47.3
45.2
9.5
9.3
10.0
10.7
Jan ’14
Jan’15
Jan ’12
Jan ’13
Broadcast Only
Wired Cable
Telco
ADS
BBO
•
th
Source: Nielsen NPM, data from the 15 of each month, based on scaled installed counts. Percent of Total US is based on a sum of the breaks listed and is slightly higher than total Composite households.
• Smart TV OEMs (television manufacturers such as Samsung, LG, Panasonic, Vizio, etc.) are adding connectivity (built in WiFi), content navigation interfaces, and app stores directly into their televisions. Consumers are now connecting and engaging with these interfaces far more frequently than they did when the technology was initially introduced. eMarketer (9/2014) projects that 20.2% of US HHs have a Smart TV, projected to grow to 31% by 2018. • OEMs are including ACR (Automated Content Recognition) technology directly into the TV set. This technology, which uses either voice or image recognition, is gathering second by second viewership data regardless of the input device of the content. • Certain manufacturers such as Samsung, are creating single sign on IDs to help differentiate individuals in HH across various devices. • Dynamic Ad Insertion (DAI) via companies like Black Arrow and Visible World are adding elements of addressability and personalization to the Video On Demand environment. • Middleware and DAI Company Invidi are enabling the ad targeting of linear local inventory at a large enough scale (DirecTV, Dish, Cablevision, Comcast) that marketers are taking notice. There are currently 30MM+ HHs reachable through this form of Addressable TV. • Traditional MVPDs have launched apps across several platforms (Time Warner Cable + Roku, XBOX, Samsung Smart TV; Verizon FIOS on XBOX, Samsung Smart TV). These apps move the bulk of the processing to the cloud allowing consumers to reduce or eliminate the number of set top boxes (STB) for which they have to pay traditional monthly rental charges.
WHY ADDRESSABLE VIDEO MATTERS
From the moment that NY merchant John Wanamaker uttered his famous quote “I know that half of my Ad Dollars are wasted, I just don’t know which half,” marketers have endeavored to find the best way to eliminate waste and open new niche markets without reaching unwanted audiences. There are many reasons a marketer wants to be more targeted with their messaging: • •
•
•
•
Reach a very specific audience Eliminate audiences that you know will never purchase your product (i.e. Advertising meat to vegetarians) Become more relevant to specific audiences through language or cultural preferences Geo-‐target based on specific product availability or geo-‐ preferences Segmentation of current customer vs prospect vs win-‐backs
While we are nearing a point in the industry where addressability is available at scale, marketers should do the math to determine whether current marketplace premiums for addressability warrant this strategy at this time or whether the one-‐to-‐many approach, including its waste, is still more efficient. As video consumption habits change, marketers are looking for new ways to make their TV campaigns more relevant and accountable. Their ability to buy larger audiences against broad demography has become more challenging as the fragmentation of viewership continues to drive degradation of program ratings. This is most apparent for marketers trying to reach younger, millennial audiences. Additionally, advances in STB technology have made TV commercial avoidance more prevalent. Many marketers believe that this can be countered in part by providing more relevant commercial messaging to those audiences. The need for advanced targeting, better data applications and the ability to effectively aggregate smaller TV audiences are necessary to increase the efficiency and relevancy of TV advertising. Data-‐driven TV buying promises to do just that, but there are limitations, such as the technology hurdles in making linear National TV addressable, budgeting concerns vis a vis the impact of National TV GRP thresholds, issues with the quality of the data being utilized, equitable reach/frequency distribution, and public privacy perception.
CURRENT OFFERING
In essence there are three models of data driven video buying opportunities. • Data Driven TV: Audience targeted and look-‐alikes: This is the current model for Cable Television. The marketer identifies a target segment and purchases local avail inventory which is merge/purged (in a non-‐PII format) between the MVPD and third party database such as Experian, Axiom, Polk, or the client’s own first party data. The data is kept double-‐blind so neither party ever knows PII about the household being targeted. In some cases, where the DAI technology has rolled out, the ad will be delivered on a HH targeted base. In other cases, the information will be used to identify high-‐indexing cable zones and ads will be delivered to all households within those specific cable zones, but there will still be a level of waste. This model still requires a mostly manual operation of buyer calling seller, identifying the reachable universe based on data matching of the MVPD’s subscriber data with the target data followed by price negotiation once the potential audience reach is known. • Data Driven TV: Digital Platform buying: This is almost the exact model as above in the linear TV space, but with the nuance that all the communication and ad delivery information is conducted digitally and integrated into a DSP. There are many sellers who are calling this Programmatic TV, but this can be confusing as currently this inventory is not dynamically ad served in any way. This is simply and electronic way of conducting traditional TV buying. • Programmatic IP Video: In this model, video is put up on Supply Side Platforms and either made available for direct purchase when the addressable parameters are met through a private marketplace or is put up on a Real Time Bid auction. This TV inventory includes TV Everywhere (traditional television network inventory via their authenticated apps), Connected TV Apps, and native online video such as YouTube Preferred, Vevo, Hulu, etc. For many years, the ability to purchase HH on linear, local avail inventory has been available in a limited footprint. For some time now Cablevision has offered up the ability to deliver creative down to the HH level, powered in part by Visible World’s technology for dynamic creative development that could customize marketing messages to each household. Previously Cablevision required a marketer to purchase the entire geographic footprint and just segment creative by HH. In 2013, DirecTV and Dish Network launched their capability, powered in part by Invidi technology, to sell and execute campaigns using local linear inventory on a HH basis within their DVR footprints. The DVR is required to store the ads that would replace the full footprint feed. Marketers are able to purchase ONLY those HHs that they want to purchase. There are limitations however, as marketers and their agency buyers lose the ability to cherry pick which networks their advertising can run on (to a limited ability marketers may opt out of certain networks due to editorial concerns) and there is a risk of over-‐frequency on an individual network as the current technology is optimized to deliver an impression to the selected audience when they appear and it lacks the sophistication to alert the MVPD if too many impressions are being allocated to a single or small group of networks. While impression delivery is generally achieved, this can lead to an over-‐frequency against heavy viewers of that particular network. This has been followed up by multiple MSOs, including Comcast and Time Warner Cable implementing Dynamic Ad Insertion (DAI) via Black Arrow technology into their Video on Demand platform. Within this
model, Black Arrow technology has the ability to delivery second by second data on each ad impression. This model is still very much a work in progress. Because audience-‐based linear TV is becoming somewhat automated and sold through TV ad networks, it if often labeled as Programmatic TV. However, this term is rather misleading since true programmatic buying does not exist in linear TV as it does in the digital space where individual IMPs are bought through real-‐time bidding through exchanges that use data sets to match audience attributes identified by cookie data. True programmatic buying does exist in the Connected TV or IPTV space where the technology allows for such buying. Exchanges like AdRise have curated pools of inventory from TV apps, OTT devices, manufacture inventory and gaming consoles like Xbox and PlayStation. But here too, no cookie data is available and targeting is a challenge. Content is often used as a proxy for audience as it is in traditional TV buying. Although device IDs are beginning to serve as replacements for the lack of cookie data, Connected TV is still far from the precision of Display or Online Video targeting.
Current Status of Linear Addressable TV 2.8MM Addressable TV HHs, 30s/:60s. 56 networks
8MM Addressable TV HHs, :30s/60s, over 78 networks
12MM Addressable TV HHs, :30s/60s, launching :15s shortly, data aggregated from over 5MM boxes, over 50 networks
19MM Addressable VOD HHs, Estimated 4MM Addressable HHs with 10MM by End of 2015 Video On Demand, DAI
Current Status of Data Partnerships
and others, if requested
Best Practices in Addressable TV -‐ Clearly define campaign objectives/KPIs and what being addressable adds to the effort -‐ Work with media partner to determine the potential audience universe of your segment(s) prior to committing -‐ Determine a realistic flight to be able to maximize your reach potential -‐ Do the math! Although you’ve whittled down the target to be more efficient, are the premiums involved in addressable and current marketplace too expensive and you are actually better off accepting the media waste -‐ Ensure that the media partner is monitoring the campaign throughout and, although it is reaching the correct audience, it could be over-‐weighting a particular network which could result in over-‐ frequency -‐ Don’t forget that in many cases you can also add interactivity to your addressable buy to encourage even greater consumer engagement
GEO-‐BASED VS. AUDIENCE-‐BASED Geo-‐based addressable data driven TV can offer great efficiencies in delivery by using MVPD subscriber data to identify income, ethnicity, pet ownership and even purchasing behavior within specific geographies on the households or cable zones level that over-‐index against the desired target. Cable Zone buying does not offer the one-‐to-‐one communication that is available within the digital space, but it does offer a one-‐to-‐few message rather than a one-‐to-‐many communication, which is a step forward in TV targeting. This type of targeting is offered through cable providers like Comcast and Time Warner Cable since they have control over the distribution systems. Satellite providers like Dish TV and DirecTV have been offering household addressable TV targeting for years, but terrestrial MSOs (multiple system operator) have started offering this type of targeting for both Video on Demand (VOD) and more recently within the linear TV space. Scale is still limited at less than 30% of TV households, but growing quickly as more advanced STBs replace older models. But geo-‐based targeting comes at a price with CPMs that are typically 3X – 5X higher than traditional TV. So this type of TV buying is efficient in terms of targeting, but expensive in terms of CPM. Depending on the advertiser’s business model, hitting ROI goals through this TV buying tactic may be challenging. Audience-‐based linear data driven TV takes a different approach. Rather than trying to reduce waste in delivery by eliminating certain geography, audience-‐based TV buying uses additional data sets to better select networks, dayparts and programs that over-‐index against your full target, not just the desired age and gender. Data sets could be as familiar as Polk, Prizm clusters or MasterCard transactional data, but also as advanced as translating an advertiser’s 1st party CRM data into audience segments through 3rd party data providers like Acxiom. Additional viewership data from set top box measurement companies like Rentrak are also being used as a supplement, or sometimes a replacement, to Nielsen TV ratings when building TV schedules. While these additional data sets could enhance targeting, the ability to reduce waste in delivery is less potent than geo-‐based addressable solutions. In most cases this approach leads to shifts in network selection by placing more media weight against smaller mid and long-‐tail networks where audiences are less broad and more niche. So rather than trying to reach business professionals through the highest rated news networks like Fox News or CNBC, you might buy smaller news networks like Bloomberg TV or Fox Business News because the data tells you there are higher concentrations of your target there. You are still buying spots, not individuals, which logically leads to waste, but theoretically less waste than traditional TV buying. Like geo-‐based addressable TV, audience-‐based linear TV buying is mostly done through the cable operators who have plenty of under-‐monetized inventory to sell, especially in the mid and long-‐tail network space. But because the inventory source is the MSOs, scale is limited to what is left of their 2 minutes of ad sale rights per hour. This means less than 5% of all TV ad time is available through this buying strategy. However, audience-‐based linear TV is much more efficient in CPM, usually comparable to DRTV costs.
DATA & ANALYTICS Data is a critical element of the new video world. Interactive video offers measurement options far beyond traditional linear television. Overall, there is still broader data available in the digital area – i.e. cookie data, digital analytics (including clickstream data and attribution models). But the new video world is embracing data and making strides in providing new types of data to advertisers and agencies. Beyond traditional Nielsen TV data, Rentrak provides RPD (return path data) based on STBs from Dish, DirecTV, Charter and Fourth Wall while comScore is developing a new syndicated cross platform data set based on their successful “Project Blueprint” pilot that they ran for ESPN. Rentrak data can be combined with multiple data sets such as Polk, IRI or Experian. Many industry professionals do not consider the Rentrak data to be suitable for transacting media buys as a currency because Rentrak has yet to gain accreditation by the Media Ratings Council (MRC) – the industry body that reviews research providers. At the same time, other industry professionals have considered using Rentrak data as a supplement to traditional TV ratings or in conjunction with other data sets for analytics purposes. The comScore “Project Blueprint” pilot demonstrated a measurement approach across 5-‐platforms – television, radio, internet, tablet and smartphone that incorporated a “hybrid” approach – using census tags for volumetrics and representative samples for demographics and calibration. After the initial pilot with ESPN, comScore started working with the Coalition for Innovative Media Measurement (CIMM) to expand the testing of “Project Blueprint” to additional media companies, advertising agencies and advertisers. Results of this expanded work are expected to be shared with the industry in early 2015. Additionally, since 2013, major television manufacturers, including Samsung, LG, and Vizio have included a chipset configuration that allows the television set to recognize content being viewed on the screen on a second by second basis. This process, Automated Content Recognition (or ACR), uses either audio cues or visual cues to identify the program. The unique aspect of ACR is that the television can identify the content from any input into the set, whether it be from the traditional STB, an over the top (OTT) device such as Roku or Amazon Fire TV, or the gaming console like Xbox or Playstation.
The potential roadblocks to widespread usage of these new datasets include the following: • Data is not captured from all MVPDs (and among MVPDs that do capture data, not all STBs capture data) • Data quality among MVPD providers is uneven and techniques for data capture can vary within a providers’ own footprint depending on the cable boxes and technical plant • Cookie data is notoriously unreliable • RPD data is deep, but limited – no demographic data, limited representation of total TV households for projectability to national campaigns One opportunity (and challenge) is bringing all of this data together in a unified strategy. First party, third party and cross platform data must be harmonized to enable maximum impact. This is a great opportunity for advertising agencies to demonstrate value and a forward-‐looking approach to media management. It also will have profound implications for how advertising campaigns are managed. Today, some agencies are incorporating data from interactive television providers into their DMPs (data management platforms) or using this type of data for analytics purposes. At this time, there is still much progress to be made in the collection and normalization of digital video data to bring it up to a suitable level where it can be compared between MVPD providers and used effectively to supplement existing media measurement providers.
THE FUTURE For the foreseeable future, we will remain in a world where both one to many ad delivery and one to one ad delivery co-‐exist. It is becoming increasing clear though that the end result will be the majority of video being delivered to multiple devices through Internet Protocol (IP). As MPVDs negotiate carriage deals with various networks, they are increasingly demanding digital video rights be included. These rights will enable the MSOs to offer those networks through the MSO branded app which will be, or in some cases already is, distributed through the various app stores across devices, including Connected TVs. Eventually, the need for MVPDs to offer physical STBs will go away and all the processing will be cloud based and all advertising will be 3rd Party ad served. One of the biggest challenges in taking advantage of the opportunity that data driven video provides is the practical implication of creative versioning. We are entering an era where, with technologies like Visible World, Idomoo, and others, we will be able to create various versions of commercials “on the fly” that are personalized to each consumer or consumer segment. The task seems daunting in particular since most marketers today are still putting their standard television commercial on their digital interactive video buys. Getting the creative agencies trained and making it economically viable to create thousands of versions of a template TV spot is going to the key focus in a data driven video world. When addressable TV and data driven video truly get to scale, there will be ramifications for client structure, ad budget allocations, and local media. The relationship between brands and local media have always gone far beyond ratings delivery. Marketers typically find tremendous value by leveraging their media dollars to associate with local celebrity, sports teams, causes, etc. Yet, it is likely that there will be efficiencies and greater control of cross-‐platform inventory that will allow us to take national, and even global schedules, and deliver them on a local basis that will encourage a change in the way that budgets are allocated. When we will be able to deliver local impressions from national inventory at scale, the roles and responsibilities of those on all ends of the spectrum of local buying will have to evolve. In a data driven video world, the role of the Business Intelligence specialist will become even more prominent as the lynchpin of a successful video campaign will be based on the correct identification of profitable targetable segments and the appropriate communication strategies around various targets. Finally, much of the inventory that is available through data driven video has the potential to be interactive. Marketers should develop a communication plan that takes advantage of this interactivity on top of the addressability and maps back engagement metrics into the sequencing of messaging across all digital touch points.
SUMMARY The transition of the digital media world from a text based medium to one whose foundation is steeped in video is well under way and will only be hastened as we move to a Gigabit per Second download world. Integration of Wi-‐Fi into television sets, whether directly or as an accessory is fundamentally changing the type of content and how we view that content on television sets. These changes are bringing the advancements in targeting and tracking that the digital world has enjoyed and developed over the past decade to the traditional world of television. While there will be years of transition, the move to a world where data enables traditional TV advertising to be smarter, more efficient, and more relevant to consumers has begun.
