The practical constraints to adopting a cross-platform advertising strategy.
Abstract: It took 38 years for radio to reach a user base of 50 million. The iPhone took 2.8 years to reach the magical 50 million user mark. The iPad in contrast took just 80 days to reach the 50 million user-base milestone. According to comScore, in February 2013 U.S. consumers spent 467 billion minutes on the accessing the Internet from a desktop, 308 billion minutes on smartphones, and 115 billion minutes on tablets. These are astonishingly high figures for devices that are relatively new to the marketplace. While consumers tend to use mobile throughout the day, data shows computer use is slowly getting shifted to office and tablet is becoming a predominant platform for at home use. Slowly but surely, multiplatform content consumption is becoming a three-way game among smartphones, tablets and TV. Unfortunately, the monetization platform for content, particularly for the TV industry has not geared up to match this cross-platform consumption pattern. This is particularly true for advertising where the age-old tradition of matching fixed set of demographics with commercials are always at clash with hyper-analyzed behavioral segmentation and targeting in the interactive world. This article analyzes the practical constraints to adopting a cross-platform advertising strategy and a step-by-step approach to addressing the same.
That the traditional business model of the TV industry is being changed due to a disruptive intermediation by digital media is not new information. In the past decade we have seen a rapid proliferation of smart screens among consumers and research shows that mobile phones and tablets are fast replacing desktops and PCs at home as the secondary device for content consumption. By 2015 the global shipment of tablets is expected to take over that of desktops and portable PCs with the inflection point arriving even sooner in some markets like the U.S. and UK. Growth of social networking as well as the increased ability of eCommerce channels to embed themselves into digital media effectively has provided further impetus to the rise of digital as an alternative medium for content distribution as well as an important ingredient for marketing campaigns.
Consider these charts:
US Total Media Ad Spending Growth, by Media 2011-2017
TV Viewing is Evolving into a Mobile Multi-Screen Experience
Internet users who have a cable TV subscription
Percent of Responents
Once considered a marketing channel by broadcast companies, digital media is rapidly emerging as an alternative means of content distribution, augmenting and often replacing traditional TV. While it’s true that consumers are not exclusively on digital platforms as yet, online viewership of video content is gaining at the expense of cable/satellite distribution. In the last few years the number of cord cutters and cord shavers is increasing significantly as this data demonstrates.
While people are watching more hours of TV than before, the increase in the non-linear viewership of video content is impacting the ratings of network TV across the board, particularly during prime-time hours. In the all important 18-49 demographic in March 2013, Fox saw viewership decline 23 percent, ABC fell 8 percent, NBC dropped 7 percent and CBS was off by 3 percent. This interplay between new and old forms of media is resulting in an increase in the total amount of media being consumed by individuals. But as the number of hours in the day stays limited, we see the emergence of media multitasking and highly connected users that access content from key digital platforms through multiple screens simultaneously through the day.
US Consumers Who Watch Over-the-Top Content Daily or Weekly
According to Nielsen, 203 million U.S. consumers access media on multiple screens monthly, which is 2.5 times the number of single-screen users. Research also suggests that 98 percent of U.S. consumers move sequentially between devices in the course of the day while 65 percent start shopping on a smart phone and continue on a PC or tablet (source: Google) and more than 40 percent of consumers use social media while watching TV.
Consumers are Multi-tasking Across Media Platforms
Given this growing multi-platform content consumption pattern, there is an urgent need for TV networks to leverage their linear and non-linear properties and deliver targeted audiences to advertisers from across different platforms. Currently most big networks treat these as silos. However several networks have realized the need for a unified multi-platform approach to advertising.
Some of the key challenges that will need to be addressed in order to adopt this cross platform strategy are:
Cross Platform Metrics: The longstanding challenge for advertisers has been to compare the metrics between traditional TV and nonlinear TV viewership. The differences in metrics used to measure TV ad viewership (Nielsen’s Television Rating Points) are different from those for digital ads making it difficult to calculate the reach and frequency between the two. While the program pilot still does not track viewership of content across third-party platforms such as Hulu or Netflix, it’s a good start for networks to be able to package audiences for advertisers across their platforms and perhaps create combined sales and campaign strategy functions
Cross Platform Pricing: Even with common and integrated metrics of viewership the unanswered question for advertisers will remain around the effect of context in understanding these seemingly comparable metrics, across platforms that create vastly different viewership experiences. This therefore creates the challenge of pricing the campaign for advertisers. Other variables affecting pricing such as inventory availability across various platforms necessitate the integration of traffic and scheduling systems across these platforms and delivering near real-time data on the go.
Cross Platform Demographics: With advertisers increasingly focused on hypertargeting of audiences, across demographics, geography and even real-time weather conditions, the challenge for networks is to integrate granular-level viewership data across platforms accounting for duplication. The true benefit of a cross-platform advertising solution will come from a network’s ability to structure offerings around campaigns focused on narrow segmentation to maximize the effectiveness of advertising spends
Cross Platform Products: The other question that is keeping the networks awake today is the concept of cross platform products. This is not a mere technical issue but a complex mixture of legal, commercial and technological issues. While rules and regulations governing airing of content on TV vary across time zones, genres etc., the digital space allows much more free access to content. Similarly, tracking rights and as well as royalties across multiple brands and media properties can create its own challenges commercially and legally.
We can logically expect that new cross- platform products will evolve with time along with regulations and commercial contracts that are more adept at addressing an integrated landscape. While the ecosystem enabling the cross-platform advertising begins to take shape, TV networks that want to benefit from the first mover advantage need to start investing and enabling in the following key areas:
Integrated Data Analytics:
With an eye on cross-platform targeting and reporting, networks need to start investing in an integrated view of its audiences across platforms at a granular level as well as analytics around the conversion of metrics across linear and non-linear media. A consolidated view of the client is also a prerequisite to enabling a consolidated sales team.
These systems have common and real-time view of inventories, ad scheduling and fulfillment systems. This may initially start with standardization of systems on the linear and non-linear sides with a combined real time view. But eventually it must evolve to a truly integrated system that will ensure optimization of processes and eliminate duplication even as ad agencies themselves reorganize their media planning and buying functions in response to this imminent change.
Integrated Delivery Platforms:
With an integrated content and rights management platform, the delivery of content between linear and non-linear channels is asynchronous and independent of each other. However, the prospect of integrated content and rights management/ delivery platforms seems an absolute necessity. The economics of such a solution itself may provide a great impetus for its adoption. Currently the ad-serving solutions incorporate a range of digital channels and smart/connected TVs and have not been incentivized to integrate linear television into their solutions. Integrated-ad operations that are capable of maintaining and acting on multi-platform ads is one place where there is scope for optimization and cost savings for the networks and could become the genesis of some of the more evolved technical solutions that are anticipated in the industry. To summarize, we see that an integrated ad platform for networks is a medium to long term investment that is going to have profound impact on how an ad sales business is run.