COMMENTARY

How Marketers Can Save Millions Of Dollars In CTV: 3 Lessons From Paid Search, Programmatic

• by Jason Fairchild , Op-Ed Contributor, Yesterday

We’re in the midst of yet another massive change in the digital advertising industry and I’m not talking about cookies, iOS14 or ad targeting. I’m talking about the massive ad budget shift to connected TV (CTV) advertising we’re all witnessing.

Over the past two decades there have been three significant digital advertising methods that have reshaped the advertising industry: pay-per-click, real-time bidding, and CTV advertising. But unlike the first two events, CTV advertising will develop much more rapidly than search or display as they had to be proven.

Advertising on TV is a format widely accepted by advertisers (and has been for 80 years) and as TV shifted from a box to a smart device, and content changed from linear to streaming/on demand the audience has grown exponentially.

Currently, 63% of all TV viewing is already done on streaming services, which equates to 90 million+ ad-supported CTV viewing households.

For the last 25 years, I've worked for and co-founded startups in digital and marketplace platforms including paid search, programmatic, and now CTV. As marketers of all sizes look toward the brave world of CTV advertising, there are lessons they can take with them from their experiences in digital advertising -- particularly search. Here are some lessons I've learned along the way that can save any marketer millions of dollars.

Follow the money

Understand exactly where your money goes and what percentage of your CTV budget goes to working media.

Ask for and only work with 100% transparency. There are lots of leading CTV sales houses claiming to be "platforms" that collect 30%-50% margins in non-transparent ways.

The easiest way to solve this is to have them disclose the actual costs of media and/or data, along with their take rate. If they won't disclose, you have your answer. If they disclose and have been "taking some liberties" with your money, you also have your answer and need to find a new, more reputable partner.

Warning: if the answer is too complicated, it's a smokescreen. The truth here is radically simple, so you should be able to “trust but verify” by drawing out the supply path with a clearly defined percentage of revenue for each link in the value chain.

Embrace the Scientific Method

Rather than committing $175,000 to a CTV buy before seeing any results — a legacy of linear TV buying that I refer to as the "bet it all on black" method — I encourage marketers to approach CTV using the Scientific Method applied to advertising. That is Test, Learn, Iterate and only then Scale.

If you have ever marketed on Facebook or Search, this approach will sound familiar. Similarly, in CTV, you can start with a few hundred dollars per day and quickly adjust the creative, targeting or other variables to dial in ROAS.

Then, once you have dialed in ROAS, incrementally scale your campaign — carefully maintaining positive ROAS — against the 200 million consumers that are viewing CTV programming today. This is actually not that difficult if you really think about it, as long as you have access to the right tools, platforms and the right data.

Work with platforms, not networks disguised as platforms

This is closely related to the first point, but understand the fundamental difference between a "network" and a "platform." Networks operate on an opaque "buy low, sell high" basis. Platforms operate on a fully disclosed fee structure.

Generally speaking, arbitrage networks are prevalent in new "wild west" categories like CTV and get squeezed out over time by platforms offering total transparency and control.

We've all seen this movie play out over and over. The only way to work with a network is if you are OK with paying a CPA regardless of the network's margin — that assumes the media risk is on them.

With all the changes occurring across digital and traditional media, marketers should anchor themselves in a clear plan, centered on collecting the data that will guide their marketing teams to drive profitable CTV outcomes at scale.

CTV delivers massive reach with the advanced targeting capabilities to connect with your ideal audience, has trackable ad exposure with 1:1 attribution measured through household IP addresses, facilitates “hands on” media buying with no minimum advertising spend, and has the ability to track the measurable “Halo Effect” across channels within a household and across channels.

When it comes to performance CTV advertising, the only question marketers need to ask is “Why the hell am I not doing it?”

 

Local Media Ad Revenues Forecast To Hit $142B In 2021, But Traditional TV Falters

• by Wayne Friedman , 11 hours ago

Total local-media advertising revenues are forecast to see growth of 4% this year to $142 billion.

Digital media is making double-digit-percentage advances and local TV is losing ground, according to BIA Advisory Services.

Total local digital ad spending is projected to be 15% higher this year to $64.7 billion, from $56.3 billion in 2020.

Local TV station ad fortunes are expected to see a reversal, sinking 14% this year to $16.2 billion. This follows a sky-high 2020 local TV advertising season, coming with record-breaking political ad dollars.

Last year, local TV stations — as a piece of the overall $18.8 billion ad take — witnessed a record $4.4 billion in political advertising.

Next year — as part of the regular boost every other year from political/Olympics advertising -- BIA projects that local TV will resume strong growth — seeing a 19% hike to $19.3 billion. Other estimates from AdImpact, a media research company, forecast that 2022 political advertising could hit another $4 billion or so in ad revenue for TV stations.

Although traditional TV platforms will decline this year, local TV stations’ digital efforts will make some gains — 7% more to $1.5 billion (from $1.4 billion in 2020) and then 13% higher in 2022 to $1.7 billion. In addition, BIA says local OTT advertising revenue will be 16% higher this year.

Local radio will see a 13% hike to $11.7 billion this year (from $10.4 billion in 2020) and 5% more to $12.3 billion in 2022. Radio’s owned local digital platforms will grow 4% this year to $940 million (from $900 million in 2020), rising 11% to $1.04 billion in 2022

Next year, total local media will again spike higher — 10% to $157.1 billion — due to local TV and higher expected political advertising, and 3% more to $162.1 billion in 2023.

This year, all traditional media — TV, radio, print, outdoor — will bring in $77.7 million in revenue, resulting in a 54% share against digital media’s 46% share. By 2023, digital media will climb to a top share level of 51% over traditional media.

BIA says its local digital media estimates are inclusive of all digital platforms — new, digital-first media businesses, as well as traditional media-owned digital properties.

 

Toyota Pulls Back From The Olympics In Japan

• by Tanya Gazdik , Yesterday

Toyota reportedly will not run any ads related to the Olympics in Japan, despite being one of the event's biggest sponsors. And Toyota CEO Akio Toyoda will not attend the Olympics opening ceremony, set to take place this Friday.

The media plan for Toyota’s Olympic and Paralympic global ad campaign is managed by individual countries and regions. In Japan, the local Toyota office previously decided not to air the campaign out of sensitivity to the COVID-19 situation in that country, according to a Toyota spokesperson.

“In the U.S., the campaign has already been shown nationally and will continue to be shown as planned with our media partners during the Olympic and Paralympic Games Tokyo 2020,” said a Toyota Motor North America spokesperson.

As of late May, Toyota Motor North America was emphasizing its support of the Paralympics.

CNN Business and other publications are reporting that the automaker will not run any spots related to the Tokyo Games, choosing instead to run its "regular" ads in Japan.

“The representative, Hideaki Honma, emphasized Monday that the company was not 'canceling' any Olympics-related commercials, saying that none were planned in the first place,” per CNN Business.

Japan is under a state of emergency due to the COVID-19 pandemic, and there has been increasing pressure to cancel the Games for a second year in a row. Spectators are not allowed at the event due to public health concerns.

Toyota is one of the Olympics' top sponsors, along with Coca-Cola, Samsung and Visa

 

COMMENTARY

Saying Goodbye To Cookies

• by Harvey Chipkin , Columnist, July 16, 2021

Last month this column dealt with Apple’s allowing consumers to opt out of being tracked by app’s downloaded from the Apple Store. This month, we look at a different privacy initiative, this time from Google. Its plan – recently postponed until 2023 – is to remove third-party cookies from its Chrome browser. As a result, brands accustomed to leveraging the wealth of consumer data available to drive sales are worried about what this means for their businesses in the future. With this change, first-party data will become more important than ever before, and brands need to learn how to navigate this shift. 

Vivek Sharma, co-founder and CEO of Movable Ink, has some suggestions. He describes his product as marketing personalization software.  Sharma founded Movable Ink in 2010 and has led the company through rapid growth serving more than 700 brands, including many major airlines.

Movable Ink, said Sharma, is now focused on:

• How brands can pivot to leverage first-party data to learn consumers’ behaviors and preferences.
• The importance of investments in the right types of data to return ROI.
• How brands will need to shift their communication strategy to turn new customers into loyalists.
• How the need for personalization will change, and why it will be more important than ever for brands to be able to leverage these tactics through other media.

Google’s actions, according to Sharma, are partly a result of not wanting to be “out-privacy ’ed” by Apple and avoiding the perception that Chrome is less private. Cookies began as a benign tool to allow shopping carts to work for ecommerce. Over the years, data leakage resulted in negative impacts on privacy.

Still, that data was useful for marketers who might feel frustration with its loss. However, said Sharma, there are better ways to approach developing relationships with  consumers. Ideally, if a customer has bought something from you in the past and shared their preferences, this provides an opportunity to deepen the relationship by taking that first-party and zero-party data (the things a customer has told you) and personalize your marketing content around that. Example: If a traveler has been to the Caribbean, Expedia can use that knowledge to market similar destinations rather than simply guessing.

There is a fine balance between privacy and personalization. A big part of third-party cookie data has been customer acquisition. However, that data did not make it easy to personalize because not enough was known about any individual. It’s far better to have earned an email address via a purchase or opt-in.

In fact, said Sharma, the emphasis for the last few years has been on earning relationships -- and if anything, this cookie transition has put the spotlight on marketing based on a relationship rather than on learning things about consumers gained without their consent.

Beyond Google and cookies, privacy laws in Europe and California show that “the writing is on the wall” for that kind of data collection, and “marketers have their heads in the sand if they are not thinking about this actively,” said Sharma.

One high-performing tool is good old email, which he calls one of the most productive channels because the medium is tied to a person’s actual identity. If someone provides an email, you have the right to contact them because it’s not a “walled garden,” as is the case with social media platforms like Facebook.

While Google’s cookie postponement now extends to 2023, said Sharma, it doesn’t change the overall trends impacting the marketing industry. Consumer privacy, he said, will continue to reign supreme and the way in which brands communicate with consumers will need to evolve to fit this new mold. 

The delay, said Sharma, is meant to give publishers, advertisers/marketers and regulators time to adjust to Google’s new technologies, enabling targeted ads after cookies are phased out. However, it is imperative, that marketers make the necessary changes to their technology stack quickly “to start creatively activating first-party data and identifying the right way to generate powerful and memorable customer experiences in this new, cookieless world."

 

COMMENTARY

Local OTT/CTV Ad Sales: Spending Grows, But Not For Every Marketer

• by Wayne Friedman , Staff Writer, July 16, 2021

Rising efforts around local TV stations streaming/OTT businesses continue at a steady pace -- but still far less than local advertisers invest when it comes to social media spending.

Borrell Associates says this year overall percentage of local businesses using local streaming video/OTT/CTV is at 45% -- up slightly from 43% last year. This compares to 90% that use social media.

Perhaps those nasty “ad tech/agency fees” are an issue.

Of the $45,358 per average individual spend on local OTT/CTV, according to Borrell, marketers also spend $14,013 “service” charges, extra digital-related stuff clients increasingly want, including attribution, targeting, business outcomes, guarantees and other measures.

Estimates are these ad-tech costs would amount to a massive 31% of overall marketing costs. That can’t be good.

Still, other marketers are finding some savings.

For example, there are local advertisers that have someone on staff handing production/advertising -- versus other marketers who make the extra expenditure of employing third-party companies. Including these cost-saving marketers, the overall average expenditure of those who bought OTT/CTV locally was $31,316.

Big TV station groups can sell much of this national/local OTT/CTV advertising, packaging inventory from scores of platforms/apps with their traditional TV ad inventory. All to increase declining traditional TV reach and scale.

It’s a growing business. A BIA Advisory Service estimate says locally targeted OTT ad spending will total $1.13 billion this year.

“While penetration seems to be leveling, spending continues rising,” write the authors of the Borrell report. “In fact, online video marketing showed the highest rate of increase planned for 2021 among all types of marketing expenditures.” It didn’t go into details.

All that tends to suggest those that have tried OTT/CTV for their local TV marketing are seeing good results -- this despite high ad-tech costs that keep local TV marketers grumbling.

But that high cost of ad-tech may not be the only reason. Think OTT/CTV fraud.

Many operations have taken great pains to address how they have big protections against bad actors. For example, Tegna’s longtime Premion business touts the message of Trustworthy Accountability Group’s ‘TAG Certified Against Ad Fraud’ on its site.

But is that enough? Growing overall revenues for TV stations OTT/CTV efforts from a limited pool of early marketer adopters are making a strong case that it is -- at this moment. Will more marketers bite?

Ad Market Grows 35.2% In June, Marks Fourth Consecutive Month Of Expansion

 

Ad Market Grows 35.2% In June, Marks Fourth Consecutive Month Of Expansion

• by Joe Mandese  @mp_joemandese, 9 hours ago

The U.S. ad economy expanded 35.2% in June vs. the same month a year ago, marking the fourth consecutive month of expansion since the ad industry pulled out of its COVID-19 recession.

It was the best June ever since Standard Media Index began the U.S. Ad Market Tracker, though it represented only a slight 0.3% increase over June 2019.

Both digital and analogue media showed strong gains in June, but the national TV ad market remains 19% below June 2019.

The expansion also was led more by smaller advertisers than the biggest, as the top 10 ad categories grew at only about a third of the rate of "all others" in June.

How the Sales Cycle Has Evolved – Maybe for the Better

 Hey All: Just got back from Baltimore and am eager to help you all with the good stuff from LeNoble's Media Sales Insights! HEre we goooo! Philip Jay LeNoble, PhD

How the Sales Cycle Has Evolved – Maybe for the Better

Slower buying processes resulting from the pandemic may be a win-win.

Kayla MyrhowJuly 14, 2021

As we move into a new phase of work and life since the pandemic changed everything more than a year ago, some things seem to be getting back to the way they were before.

Companies are bringing people back to the office.

People are traveling again.

The number of video calls turning into face-to-face meetings is increasing.

And so it goes.

But maybe we don’t want to return to all our former ways of doing business.

Pre-COVID Sales Cycles vs. the New Normal

Take, for example, the sales cycle pre-COVID. In many cases, once a prospective customer got in touch with your business, the time it took between the initial contact and closing the deal moved more rapidly. A demo, some meetings, perhaps a bit of negotiation, and the deal was signed.

COVID changed all of that. Businesses paused. Budgets froze. Travel stopped. No one knew for sure what they were going to do next.

This caused decision-makers to slow down and truly think through their next moves. No longer were decisions being made for the short term.

Questions like these began to swirl in their minds:

• How did I spend that money?
• Why did I spend it that way? (I want to do more with less and make better decisions.)
• What results did I get from implementing that solution?

Why did this happen? Because the pandemic forced them to pause.

Without that pause, it might have been business as usual. And that isn’t always a good thing. While some organizations can afford to spend money on hasty decisions that may not pan out – most can’t.

Putting Employees at the Center of the Decision-Making Process

Another important change took place. Companies began considering what their employees might want. Not that they never did previously, but now, there seems to be more of a laser focus on employees that didn’t exist before.

Throughout the months since the pandemic began, supporting your team became a priority. Wise leaders quickly learned that reducing stress for your employees needed to be top of mind. Otherwise, their health (and consequently the company’s productivity) would suffer. While it seems intuitive to a degree, it took the pandemic to drive this idea home for some organizations.

It’s now more about how do we help our workers. How do we retain them – and keep them happy so they want to stay?

Employees are now at the center of the decision-making process. Companies realize that the decisions they make about which solutions they choose directly impact their workers.

No longer are companies rushing to spend money. Instead, they are slowing down, being much more methodical during the selection process. We see a more intentional approach. As prospects exercise greater caution with their budgets, they are also likely to be more thoughtful with their choices.

Longer Sales Cycles = Increased Customer Loyalty

While the sales cycle may take longer, when you do win a new customer, they’re more likely to stay with you. Retention goes up. Research shows that it costs up to seven times more to win a new customer versus keeping a current one. A longer sales cycle can equate to a longer customer lifetime value (CLV).

In some cases, the opportunities are of higher value. Companies may purchase more seats when they’ve taken the time to thoroughly think through who they’re choosing.

We have to truly earn their business now – but in the long run, that’s better for both the seller and the customer.

Another positive is that buyers want to know how to do more with the solutions they’ve purchased. They seem genuinely interested in learning what other ways they might be able to use it, how they can maximize their investment, and how they can make the most of what they’ve selected.

Because of the nature of our product, we saw customers wanting to dive in much more quickly due to the sudden increase in employees working remotely. Suddenly, increasing the ROI in the digital workplace became a priority.

Sales Process Workflow Continues to Be a Factor

Workflow continues to be a key factor for any sales team. While the decision-making cycle has slowed, the internal workflow can be streamlined when using the right tools.

For those using Microsoft Teams, using a sales template can unite all the departments involved in the sales process. For example, by using an RFP template that can be sent to all the relevant departments with action items assigned, the amount of work can be reduced not only for the sales team but also for legal and any other department that needs to be involved.

Longer Sales Cycles Benefit Both Sides

While customers may be taking longer and being more cautious with their spending, companies should try to appreciate the upside of this and understand what it means for the long term.

When decisions are executed with care for the organization – and for employees – we all benefit.