A Practical Definition Of Programmatic TV

 

• by Joel Melby , March 27, 2015, 1:58 PM

Editor's Note: This post was previously published last August, but is still relevant today:
Programmatic TV advertising has become a hot topic recently, but what does it really mean? The digital advertising players have been developing a programmatic ecosystem for some time, yet they define programmatic in what amounts to a “I’ll know it when I see it” manner. So how might we map such a loosely formed concept to the TV advertising industry?

Why Isn’t TV “Just Like” Online Video?
Before we jump on the programmatic bandwagon, let’s understand how digital and TV advertising fundamentally differ:

Supply vs. Demand
Like any market, advertising follows basic microeconomic principles. In the case of digital ads, the supply of advertising opportunities is essentially unlimited. Even with $50 billion in play, the demand for those opportunities is still bounded; publishers are always looking for buyers, and buyers can typically expect to find whatever audiences they need. TV on the other hand, is a seller’s market, with buyers looking for future commitments and deals amongst its relatively fixed supply of inventory.

Addressability
Traditionally, TV content has been delivered via broadcast, making it impossible to exclusively target or address a specific set of viewers – today, the majority of TV impressions are still delivered this way. Instead of the highly specific impression-level targeting possible with digital advertising, TV audiences are usually indirectly addressed as blocks of impressions, using specific programs or networks as proxies for the actual audiences.
Increasingly, distributors/operators are deploying technologies that allow household targeting within broadcast and on-demand programming, but the scale of impressions available through these mechanisms is still relatively small.
And because of the nature of the technologies and the television ecosystem, TV impressions are difficult to compare with digital impressions.

Measurement Mechanisms
In the digital ecosystem, impressions are measured primarily by tracking pixels fired by each user’s browser or app at the time of delivery. On the other hand, TV audience measurement is tied up in a thicket of legacy business constraints, Congress-mandated privacy restrictions, and technological limitations. As a result, audience size and composition is statistically derived for blocks of impressions at the national and market-level from sampled tuning data, typically provided days after the impressions occurred.

Lead and Lag Times
Programmatic digital advertising is a nearly instant kind of business; load your campaign into Demand-Side Platform (DSP) of your choice, upload the creative to the Content Delivery Network (CDN) of your choice, and wait for comScore or Nielsen to tell you how you’re doing.
Not so for television. The majority of TV impressions are bought months in advance, and every supplier requires a traffic lead time (from hours to days in advance). TV creatives generally must be approved before airing. Occasionally, some measurement data can be made available overnight, but final reporting won’t be available until two or three weeks after airing.

What Is Programmatic TV?
Given these fundamental differences between the TV and digital worlds, programmatic television advertising requires a different definition. For programmatic TV, the definition needs to be pared down. It is the automation of data-driven, audience-based advertising transactions.
When we say automation, this refers to the automation of the end-to-end (advertiser to supplier), round-trip (media planning through affidavit and invoice), transactional workflow. Inventory selection is driven by quantitative data and audience targeting goals, rather than by qualitative spot buying.

You’ll note that the definition above does not use words like “real-time bidding” or “auction.” These are semantics that can be layered on top of programmatic transactions, not the essential ingredients. Auctions are just one means of buyers and sellers agreeing on a price; just as in digital advertising, such pricing also can be fixed via separate negotiations. Likewise, these transactions can be done in real-time or on a reserved/futures basis — to be clear, it is unlikely that any TV advertising will be transacted in real-time due to technological and business reasons.

Where Are We Headed?
TV advertising systems are complicated, balkanized, and extremely busy running a $70 billion business. We won’t get to a true programmatic ecosystem overnight. Instead, we see a staged slither-crawl-walk-run transition playing out over the next several years. The goal of this process will be collaboration within the industry to create standards and increase the chance of success for all players. There will be slow adopters, who fear devaluating their hit show inventory, for example; but over time, we hope the simplicity of automation, plus the immediacy of data, will prevail in uniting the supply-side and demand-side economics of TV.

Buyers and suppliers have been electronically distributing insertion orders and invoices for some time (a precursor to programmatic), but it’s only now that the various ecosystem players have started the arduous process of building workflow automation and developing the predictive audience models needed to translate between buyers’ audience goals and supplier avail inventory. That process must include the adoption of an industry standard suite of application programming interfaces (APIs) that allows buyers’ and sellers’ systems to interact.

TV Binge Viewing Is The New Normal Among Hispanic Consumers

 

• by Mario Carrasco, March 26, 2015, 10:00 AM

This past winter was brutal. With cities like Boston buried under 108 inches of record-breaking snowfall and a couple cold snaps still to come, what better way to past the time then catching up on the latest season of your favorite TV show. And the timing couldn’t be better.

 

We are now in one of the most prolific content years for major streaming services. Amazon, for example, recently picked up two Golden Globes for “Transparent” and Netflix just released the third season of the hit show “House of Cards.” 

 

And while we may have cringed at the addition of yet another buzzword, turns out “binge viewing” really does exist and now describes how many Americans consume TV. 

Taking a closer look at those viewers, you’ll find that one of the earliest adopters of the binge-viewing phenomenon has been U.S. Hispanics. 

 

The New Normal?

Perhaps, but it really depends on what age group you’re looking at. Recent studies show that on average, binge viewing is clearly becoming the preferred method for watching TV shows compared to traditional methods.  

 

The driving force? Millennials. The coveted 18 - 34-year-old segment is leading the charge. When Hispanics 18+ were asked how they preferred to watch their favorite show, 40% said “three or more episodes back to back.”  

 

But when you look exclusively at 18 - 34 year olds, this number climbs to nearly half (48%). This is much higher compared to 35 - 65 year olds who are still more likely to prefer watching their favorite shows when they air on broadcast TV (46%).

 

Hispanics are also more likely to binge view compared to non-Hispanics. The majority of Hispanics reported watching an entire season of a TV show over one weekend compared to about half of non-Hispanics (60% vs. 49%). Again, this is much more common among 18 - 34 year olds (68%).

 

How They Watch

When asked about the way in which they watch TV, less than 40% of 18 - 34 year olds reported watching live TV (the anti-binge viewing method). They were far more likely to watch programming via Netflix, YouTube, Hulu, and others when compared to 35 - 65 year olds.  

 

Who They Watch With

The hallmark of Hispanic culture is a deep “sense of community.” And this sentiment spills over into their binge viewing behavior.

When asked, “When you watch three or more episodes of a TV show back-to-back, are you usually watching TV by yourself or with someone else?” 45% said “with someone else.”

 

Why Does All This Matter?

It’s simple. There is a tug of war going on right now between streaming services and traditional networks.  Binge viewing has become mainstream and the desire to consume shows in rapid succession is becoming increasingly common, particularly among younger viewers. 

Live TV will have to continue to up their game in order to compete with internet TV, which now offers new streaming services like YaVeo and online content like MiTu aimed at Hispanic audiences.  

And networks are doing just that. Since 2013, they have been coming out with strong content aimed at Hispanic and total market audiences such as “Jane the Virgin” and major hits like “Empire” and “Blackish.” 

 

Ultimately, the biggest winners are viewers. They are treated to great content that’s relevant to them on their own terms. Amazon, and other streaming services, are rewarded with more subscribers and market share.  And advertisers? Well, the prize will go those who innovate.

 

"The bottom line says national media consultant Dr. Philip Jay LeNoble, is that local commercials will have a better frequency potential for purchase affect on consumers during 'binge viewership.'

• by Wayne Friedman, March 26, 2015, 4:15 PM

 

Sinclair Broadcast Group, one of the largest U.S. TV station groups, is starting up a new digital division -- Sinclair Digital Ventures. The unit will invest in emerging digital technologies and digital content companies, focusing on companies with products or services that support and expand Sinclair’s digital capabilities and non-linear platform.

The division will be overseen by three Sinclair executives: David Amy, Sinclair’s COO; Chris Ripley, Sinclair’s CFO; and Rob Weisbord, Sinclair Digital Group’s COO.

David Smith, president/chief executive officer of Sinclair Broadcast Group, stated: “We currently have several potential investments in the Digital Ventures pipeline whose emphases are on advancing advertiser reach, enhancing the users’ digital experience, and/or improving our digital content.”
He adds: “Expansion of our digital footprint is integral to our longer-term growth plan, especially as viewing consumption trends evolve.”

Sinclair owns and operates, programs or provides sales services to 162 TV stations in 79 markets. Sinclair's television group reaches approximately 37.5% of U.S. TV homes.
The company says in its 2014 fourth quarter, digital revenue grew 71%. Last year, Sinclair closed major TV station acquisitions including outlets from Allbritton Communications.

ESPN To Launch TV DMP: Will Enable Brands To Target Audiences, Not Ratings

by Tyler Loechner @mp_tyler, Joe Mandese @mp_joemandese,

  March 26, 2015, 9:36 AM

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PHOENIX -- In an important milestone for the burgeoning programmatic TV marketplace, ESPN will become the first major television network to provide a proprietary data management platform (DMP) enabling advertisers and agencies to plan and buy its programming based not on traditional sample-based TV ratings, but in a way that is akin to how agencies and trading desks buy audiences online.

 

Speaking on a panel Wednesday morning at MediaPost’s Programmatic Insider Summit here, ESPN Vice President of Digital and Publishing Sales Zachary Chapman said ESPN will officially unveil the DMP within the next three weeks, and that it would be introduced in phases, with the first one being “figuring out how to integrate with any set-top data out there.”

 

This is significant because the data from TV set-top devices serves the equivalent role that data from a user’s browser plays in Web, social and mobile audience targeting, and is the integral building block to append all other data -- so-called “first-” and “third-party” data -- about the user.

 

ESPN’s move comes as the role of data platforms is gaining interest in the TV business. Recently, TV ratings giant Nielsen acquired one of the last significant independent digital DMPs, eXelate, for $200 million -- and is in the process of figuring out how to integrate it with its online, TV and so-called cross-platform audience data. Some observers saw Nielsen’s move into the DMP space as a logical line extension, while others deemed it a hedge for a day when advertisers and agencies might abandon sample-based ratings in favor of data on empirical user behavior.

 

A number of companies have been effectively serving as DMP proxies for targeting TV audiences on a similar basis -- most notably Simulmedia, which uses data and technology to make an arbitrage market out of buying undervalued TV inventory, enhancing it with audience data and reselling it to advertisers looking to reach those audiences.

 

Other TV inventory middlemen, including Visible World’s AudienceXpress have been developing proprietary DMPs in an effort to enhance the audience value of unsold local cable inventory that it repackages into so-called unwired network buys for national advertisers.

 

But the move by ESPN, arguably one of the most valuable and desirable suppliers of TV and digital audiences to Madison Avenue, is the most aggressive move yet by a direct programmer.

One big question for ESPN is why advertisers and agencies should trust the data it generates via its proprietary DMP when its goal is to find better ways of generating revenue from its audiences. In the digital world, DMPs generally operate as independent, neutral players between the so-called “demand-side” (advertisers, agencies and trading desks) and the “supply-side” (publishers, ad networks and exchanges).

 

“I don’t know why anyone would trust us,” acknowledged ESPN’s Chapman during the question-and-answer session that followed his panel, adding a rhetorical answer: “Why does anyone trust Facebook? Why does anyone trust Google? They trust them because they created a marketplace.”

Chapman added that ESPN hopes to create a “level of transparency” with its DMP, then give advertisers the confidence to rely on its data to target consumers more effectively. He said ESPN’s goal is to create a “clean, well-lit environment” where both the buy- and the sell-side can look at the value of the audiences that ESPN delivers in new and presumably more valuable ways.

 

He gave an example of ESPN inventory that currently might be undervalued -- spots running in the wee hours of the morning that would normally be sold as “remnant” time to direct-response marketers at a fraction of the rate a brand marketer would pay. Chapman’s example was that by using a DMP, ESPN might be able to uncover the fact that instead of being simple insomniacs, the audience is actually a group of young men with the munchies looking to order a pizza.

 

“Why is that a DR play?,” he asked the summit attendees, adding: “Four guys sitting around a room wanting to order a pizza?” He said it was actually the “ultimate Dominoes audience,” and that the pizza marketer should look at that inventory as being some of ESPN’s most valuable.

ESPN has already been a leader in the fledgling programmatic TV industry, and the DMP rollout seems to be the next logical extension for it to leverage the value of its audiences in a more sophisticated way that is consistent with the way the digital programmatic marketplace works.

The sports network made waves earlier this year in the data-driven TV targeting space when it ran a programmatically sold ad during "SportsCenter," the network's flagship show.

The Power of Radio: ‘souper’ results for fast casual restaurant chain.

INSIDERADIO
March 30, 2015


The parent company of the Souplantation and Sweet Tomatoes restaurant chains is on the air with a fresh ad campaign and a new voice. Patrick Warburton, former star of "Seinfeld" and "Rules of Engagement," is voicing the spots that are now airing in the Los Angeles, Orange County, Inland Empire and San Diego markets. In a spot entitled "Once Upon a Tomato," he tells a tale of the brief life and "sacrificial death" of a fresh tomato. In his signature distinctive deep voice, the ad ends, "If a chopped up, pureed and simmered Tomato could smile — he would." Up next: broccoli is the star. The root (pun intended) of the ads are the longtime friendship of Garden Fresh Restaurant Corp.’s new CEO John Morberg and Warburton, who were classmates in elementary school.

So far, Souplantation/Sweet Tomatoes says in the markets where the spots have run, sales have risen nearly 5%. San Diego-based Garden Fresh operates 128 restaurants in 15 states.

Midwest department store shifts dollars to radio. The Middle America department store chain Gordmans Stores is the latest retailer to say it is shifting dollars out of print as it weans itself from Sunday circular inserts. CEO Andy Hall told investors last week the retailer has just hired a new advertising agency and, as a result, won’t spend as much on newspaper space. Instead, he said it will shift dollars to radio and television. Print will still be on the buy, but to a lesser degree. "We probably won’t kickoff a new campaign until midyear, but I think that’s an exciting opportunity for us," he said on a conference call. Gordmans has 99 locations in 22 states, with plans to open six more this year while exiting the Chicago market. Hall said the new ad agency has begun doing research and interviewing customers as it fine-tunes the marketing strategy. One decision that has already been made is to put more focus on what Hall said are "specific natural shopping periods" for a department store, such as Mother’s Day, Father’s Day, and back-to-school. But at the same time it will continue marketing through the year. "Our everyday value price is the cornerstone of our business model," Hall said. "And I think we got a little astray from that model in the past and I think we will get back on board this year."

How cable ratings stack up to broadcast

Television

medialife

Eight of the top 25 shows in viewers 12-34 and 18-34 air on cable

By Toni Fitzgerald

 

March 24, 2015

        

Wow factor: AMC’s ‘Walking Dead’ knocks them all dead on both cable and broadcast.

Media buyers and planners are always curious to see how cable and broadcast shows compare against each other.

And the latest numbers suggest the lines between cable and broadcast continue to fade for younger viewers, especially Millennials.

Nearly a third of the top shows among viewers 12-34 and 18-34 air on cable.

Of course, AMC’s “The Walking Dead” has been pacing ahead of broadcast’s top shows for quite some time. But other cable shows are creeping up.

During the week ended March 15, eight of the top 25 programs among 12-34s were on cable, based on Nielsen live-plus-three-day-DVR-playback.

“Dead” was on top with an 8.3 rating, and the drama’s post-episode talk show, “Talking Dead,” ranked fifth with a 2.7.
In fact, AMC had three programs in the top 15, with “Better Call Saul” ranking 15th.
E!’s “Keeping Up with the Kardashians” ranked 12th with a 2.1.

And eight of the top 25 in 18-34s were cable programs as well. In addition to the three AMC shows and “Kardashians,” VH1’s “Love and Hip Hop” ranked in the top 20.

Interestingly, among slightly older viewers, adults 18-49s, the line between cable and broadcast remains a bit more visible. Only three cable shows rank in the top 25. Actually, just three rank in the top 39.

The reason may be that the younger generation has grown up at a time when cable and broadcast are becoming indistinguishable.

Cable has gained a wider audience over the past decade, with higher-quality content and greater distribution.

But even slightly older viewers are still more likely to stick to broadcast. They’re not as comfortable with the wider range of channels and tend to favor more traditional content.

While 18-49s are certainly more likely to surf to cable than older demos, when compared to younger ones, they’re fairly traditional.

 

L+3 Ratings (Broadcast and Cable) Adults 18-34 Week Ending March 15
Rank	Program	Net	Rtg%	(000)
1	WALKING DEAD	AMC	9.0	6,102
2	EMPIRE	FOX	7.1	4,838
3	BIG BANG THEORY, THE	CBS	3.9	2,666
4	SCANDAL	ABC	3.3	2,209
5	VOICE	NBC	3.0	2,070
6	BACHELOR, THE	ABC	3.0	2,005
7	BACHELOR:AFTER FINAL ROSE	ABC	2.9	1,975
8	GREY’S ANATOMY	ABC	2.9	1,954
9	TALKING DEAD	AMC	2.8	1,894
10	VOICE-TUE	NBC	2.7	1,854
11	FAMILY GUY	FOX	2.5	1,711
12	BETTER CALL SAUL	AMC	2.5	1,682
13	KEEPING UP KARDASHIANS	E!	2.4	1,658
14	LAST MAN ON EARTH	FOX	2.4	1,604
15	ONCE UPON A TIME	ABC	2.0	1,356
16	CRIMINAL MINDS	CBS	1.9	1,305
17	AMERICAN IDOL-WEDNESDAY	FOX	1.9	1,280
18	CHICAGO FIRE	NBC	1.9	1,266
19	LOVE AND HIP HOP 5	VH1	1.8	1,239
20	FAMILY GUY	ADULT SWIM	1.8	1,217
Source: Nielsen

 

 

L+3 Ratings (Broadcast and Cable) Adults 18-49 Week Ending March 15
Rank	Program	Net	Rtg%	(000)
1	WALKING DEAD	AMC	9.8	12,472
2	EMPIRE	FOX	7.8	9,939
3	BIG BANG THEORY, THE	CBS	5.9	7,550
4	VOICE	NBC	4.5	5,696
5	VOICE-TUE	NBC	4.4	5,597
6	SCANDAL	ABC	3.9	5,010
7	TALKING DEAD	AMC	3.6	4,510
8	GREY’S ANATOMY	ABC	3.3	4,167
9	CRIMINAL MINDS	CBS	3.2	4,008
10	BACHELOR:AFTER FINAL ROSE	ABC	3.1	3,973
11	BACHELOR, THE	ABC	3.1	3,941
12	BLACKLIST	NBC	3.1	3,876
13	NCIS	CBS	3.0	3,823
14	CHICAGO FIRE	NBC	2.9	3,700
15	ODD COUPLE, THE	CBS	2.9	3,692
16	SCORPION	CBS	2.9	3,677
17	SURVIVOR	CBS	2.9	3,652
18	MOM	CBS	2.9	3,646
19	AMERICAN IDOL-WEDNESDAY	FOX	2.7	3,482
20	2 BROKE GIRLS	CBS	2.7	3,390
Source: Nielsen

 

 

L+3 Ratings (Broadcast and Cable) Adults 12-34 Week Ending March 15
Rank	Program	Net	Rtg%	(000)
1	WALKING DEAD	AMC	8.3	7,676
2	EMPIRE	FOX	6.5	5,989
3	BIG BANG THEORY, THE	CBS	3.5	3,244
4	VOICE	NBC	2.8	2,608
5	TALKING DEAD	AMC	2.7	2,458
6	SCANDAL	ABC	2.6	2,429
7	VOICE-TUE	NBC	2.6	2,394
8	BACHELOR, THE	ABC	2.6	2,388
9	BACHELOR:AFTER FINAL ROSE	ABC	2.6	2,359
10	GREY’S ANATOMY	ABC	2.4	2,197
11	FAMILY GUY	FOX	2.2	2,018
12	KEEPING UP KARDASHIANS	E!	2.1	1,977
13	ONCE UPON A TIME	ABC	2.1	1,921
14	LAST MAN ON EARTH	FOX	2.1	1,915
15	BETTER CALL SAUL	AMC	1.9	1,782
16	AMERICAN IDOL-WEDNESDAY	FOX	1.9	1,726
17	CRIMINAL MINDS	CBS	1.8	1,669
18	FAMILY GUY	ADULT SWIM	1.7	1,563
19	PRETTY LITTLE LIARS	ABC FAMILY	1.7	1,558
20	FAMILY GUY	ADULT SWIM	1.7	1,526
Source: Nielsen