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Inside TV’s Terrible, Horrible, No Good, Very Bad Upfront

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By Brian Steinberg

Depending on who is doing the talking, TV’s 2020 “upfront” market was absolutely horrendous or merely awful.

Advance advertising commitments for the next year of TV could be down as much as 15% to 20%, according to six media executives and ad buyers familiar with parts of the industry’s annual negotiations for commercial support for its next programming cycle. The projected shortfall takes place after a slew of regular TV sponsors were crippled by the coronavirus pandemic, and the TV networks’ ability to showcase original content was severely hurt by scuttled and delayed productions.

More concerning, perhaps: some of the drops in advertising outlays could become permanent, as advertisers scramble to get commercials in front of a viewing public that is turning increasingly to streaming, on-demand video. “Things we thought would happen in 18 months or two years are happening in real time,” says one media buying executive. “What may have been the right path six months ago will have to go out the window.”  That could leave TV fighting harder to keep ad dollars at a time when the medium needs them more than ever.

The nation’s five English-language broadcast networks could have seen the volume of ad commitments they secured for their next cycle of primetime programming fall by at least 9.3% to 14.6%, according to Variety estimates.  It is the first time since 2015 that upfront estimates have sagged. Based on conversations with media buyers and other executives, Variety estimates NBC, ABC, CBS, Fox and the CW have secured between $8.2 billion and $9.8 billion for their 2020-2021 primetime schedules, compared with between $9.6 billion and $10.8 billion for primetime in the 2019-2020 season. Last year, upfront volume surged between 5.5% and 7.4% over 2018.

UPFRONT VOLUME

IN PRIMETIME, AMONG FIVE ENGLISH-SPEAKING BROADCAST NETWORKS

2010  $8.1B to $8.7B

2011  $8.8B to $9.3B

2012  $8.8B to $9.3B

2013  $8.6B to $9.2B

2014  $8.17B to $8.94B

2015  $8.02B to $8.69B

2016  $8.41B to $9.25B

2017  $8.78B to $9.62B

2018  $9.1B to $10.06B

2019  $9.6B to $10.8B

2020  $8.2B to $9.8B 

 

Source: Variety estimates

The numbers should be taken as directional indicators, not hard, cold cash. Upfront figures are typically built on fuzzy math and rarely have any correlation to the ad money big media owners like CBS, Walt Disney, NBCUniversal, Fox Corporation and WarnerMedia collect by the end of the year. Advertisers can pull orders at certain moments in the season or “re-express” advertising if specific programming is yanked off the schedule, changing the nature of their commitment to purchase inventory. But they still serve as a sort of guide as to where money is being sent. In recent years, the figures have lent ballast to the theory that the networks can still keep new money flowing despite ratings erosion and viewers moving to streaming options. This year, the numbers indicate tricky trajectory ahead.

As bad as the numbers are, media executives say they expected worse. Movie studios, some retailers, and restaurant chains and travel marketers had little visibility on their future business, and cut spending. Automotive advertising, long a staple of TV advertising, was mixed.  The networks had to rely on insurance companies. pharmaceutical marketers and big consumer packaged goods giants – advertisers whose long association with TV has given them the ability over the years to command more favorable pricing rates year over year.

“The advertisers had aggressive expectations for rollbacks, because they all thought a lot of categories were on the side-lines, that the networks were going to get really nervous because they would not have enough of a base,” says one media executive. But the TV outlets resisted some of that pressure, pushing back against harsh demands until they could talk about the return of sports like the NBA, NHL, golf, and, most importantly, the National Football League.

The upfront showed “a mix of stronger demand than many people have estimated just a few months ago,” said Comcast CEO Brian Roberts at a recent investor conference, noting that the company sees “really good signs for both the third and fourth quarter. “

To be sure, the end results were not as robust as they have been in the recent past. Big TV networks in the last three upfront sessions have been able to snare double-digit percentage increases in the cost of reaching 1,000 viewers, a measure known as a CPM that is central to these annual discussions between U.S. media companies and Madison Avenue. Last year, NBCUniversal sought CPM increases of between 13% and 14% for primetime inventory, while CBS pressed for CPM hikes of between 14% and 16%. ABC sought 14%, Fox called for 12% to 13% and the CW pushed for 14% to 15%.

One year later, the rate increases are much more paltry, with ad buyers suggesting CPM rates rose just 3% to 4% for top inventory, with some media companies consenting to single-digit percentage rollbacks for less-desirable and less popular inventory. The media companies are also said to have offered rollbacks for digital inventory – even though some of it was in high demand from advertisers that were ready to spend.

Walt Disney, ViacomCBS, NBCUniversal and Fox declined to make executives available for comment.

If broadcast faced headwinds, cable squared off against a hurricane. Some media executives believe the volume of ad commitments at cable networks could be down by 20% or more.

To keep the dollars flowing, the networks had to be flexible. They offered compelling rates on digital inventory to stoke commitments to primetime. They gave sponsors more wiggle room to claw back dollars in case of a business downturn. And they made sure advertisers would be taken care of if certain big events, such as sports matches, never made it to air.

Even so, the upfront was beset by numerous obstacles that have not impeded it in the past. Consider that in May and June, when market haggling usually takes place, few executives knew when sports might return to the field, or when primetime favourites would start to film anew. NBCUniversal’s Olympics broadcast, slated for this past summer and often a massive spur to new ad talks, was postponed. A number of prominent advertisers – including Procter & Gamble and Unilever – called for the industry to shift the upfront to the fall or later in the year. And Nielsen rolled out a new measure of out-of-home viewing for entertainment programming that the networks had to convince some advertisers to accept.

The Madison Avenue manoeuvre to push back upfront talks may have backfired, according to one media buying executive.  Advertisers seeking so-called “calendar-year” deals – agreements that start in 2021 rather than the beginning of new fall TV – found higher costs, says the buyer. “I do think if anybody tried to wait to do calendar deals, they really got hurt.”

Procter undercut its own efforts, not waiting for its calls to shift the upfront to take effect. Instead, the maker of Pampers and Crest did a direct deal with ABC, CBS and NBC, according to two people with knowledge of the matter, rather than working through its agencies. The pact was for broadcast inventory only, these people say, and did not focus on cable. In September, Marc Pritchard, P&G’s chief brand officer, raised eyebrows when he said at an industry conference that “we’ve taken control of when we negotiate and buy TV media. To level the playing field, we negotiate directly with as many as possible.” Most large advertisers rely on one of the ad industry’s big media-buying firms to get such things done.  The consumer-products giant declined to offer any details of its deal with the networks, noting in a statement that “we do not comment with regard to any supplier negotiations given they are proprietary to our business.”

There were still some bright spots. Ad buyers suggest NBCUniversal and Disney fared better than their competitors, buoyed to some degree by interest in on-demand hubs Peacock and Hulu. Ad money moved to streaming video across the board, with buyers looking at ViacomCBS’ Pluto and Fox’s Tubi, and even setting aside dollars for the ad-supported version of WarnerMedia’s HBO Max, which one ad executive expects to see debut in early 2021.

Some advertisers gravitated toward Discovery, which has maintained original unscripted programming at outlets like Food Network while the rollout of new comedies and dramas have slowed. Discovery said the number of clients joining its “Discovery Premiere” offer, which puts clients in a package of 30 of its best-known series, increased during the upfront to 75 from 25.

Many networks are looking to better times. Several held back upfront inventory so it can be sold in TV’s so-called “scatter” market, when inventory is purchased closer to the date it airs and is often sold at a premium. Speaking to investors recently, Fox Corporation CEO Lachlan Murdoch said the company had probably held back 5% more commercial inventory than usual in hopes of getting better prices for it later in the cycle.

The networks will need that money.

Based on Variety’s estimate of a 10% to 15% cut in volume, NBCUniversal may have seen primetime commitments fall to between $2.68 billion and $2.84 billion, compared with $3.15 billion in 2019. ABC may have seen primetime commitments fall to between $1.66 billion and $2.18 billion, compared with between $1.95 billion and $2.42 billion a year ago. And CBS may have seen primetime commitments fall to between $2.03 billion and $2.51 billion, according to Variety estimates, compared with between $2.39 billion and $2.79 billion in 2019.

The smaller networks were affected as well. Fox may have seen primetime commitments fall to between $1.36 billion and $1.64 billion, according to Variety estimates, compared with between $1.6 billion and $1.82 billion in 2019. And the CW may have seen primetime commitments fall to between $440.8 million and $$597.1 million, according to Variety estimates, compared with between $592.7 million and $663.4 million a year earlier.

The moves wipe out some the volume gains the networks have made since a three-year stretch in the middle of the decade, when the TV companies had to muscle through tougher upfront sessions in the aftermath of a large recession. They have been helped in recent years by advertiser concerns about offensive content on YouTube and other social-media outlets as well as an inability to get independent consumer data from many digital players.

Last year, Madison Avenue rushed to TV as if Tony the Tiger and the Marlboro Man were still in their prime. As more Americans move to stream their TV favorites, media companies seem to have good reason to worry about how closely advertisers will follow them.

By Brian Steinberg

Sourced from Variety

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Reconsidering The 30-Second Ad Spot And Consumer Attention

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By Max Kalehoff

U.S. digital ad spending surpassed TV advertising several years ago. However, many of today’s brands still haven’t rebalanced their advertising strategies when it comes to creative optimization and audience understanding. Despite the continued ascent of digital ads as the workhorse of the advertising industry, an outsized investment is still pouring into crafting the long-revered 30-second spot.

Who are the leaders in embracing the workhorse ad format of the future? A good place to look is the Facebook Ad Library, where you can instantly view a single brand’s ads and find clues to their approach. A perusal of Facebook’s Ad Library can be a hugely enlightening glimpse into how the world’s most successful advertisers leverage consumer attention. For instance, one company might develop dozens of short-form video ads and memes to reflect the short attention and personalized preferences of their prospects and customers. While another company might serve made-for-TV ads directly onto Facebook, seemingly with little optimization for mobile or the Facebook context.

Attention is diminishing in the digital world. It is naive (if not arrogant) to assume that a 30-second spot will give you 30 seconds of audience attention. With multiple devices and numerous apps competing for attention, users are more likely to shift to a different screen or scroll to a new post before the 30 seconds are up.

The 30-second spot has long been the tentpole of advertising’s creative existence. For many brands, these ads — which shine brightest around major events like the Super Bowl — are treated like movie premieres. They are rigorously screened, vetted and refined prior to release, carefully launched and then distributed via paid media. The hope is to generate maximum buzz among consumers and within industry circles. How many marketing conferences have you been to where a chief marketing officer (CMO) celebrates and summarizes her company’s accomplishments by showcasing a 30-second spot?

When you take for granted audience attention, longer environments (like 30-second spots) offer more opportunity in which to tell stories and create emotional impact. Indeed, the emotional impact is what encodes branding into your consumers’ brains, so your advertising achieves impact, whether that’s acting in the moment or remembering and preferring to select your brand later on when shopping. Big ideas are foundational, and there is a place for tentpole creatives, even 30-second spots.

However, consider this: A Google-commissioned study by Ipsos determined that, while only “45% of TV advertising time actually receives attention,” paid YouTube mobile ads receive 83% viewer attention. Moreover, our own Realeyes attention data underscore that consumers rarely demonstrate attentive viewing behaviors with video ads beyond even 15 seconds, particularly in digital environments.

As brands embrace the reality of eyes on digital screens and increasing distraction — accelerated by a global pandemic — they face a creative challenge that no cookie-cutter playbook will solve: how to implement emotive storytelling that encodes your brand in the brain, without the prospect of 30 seconds of captive attention. What is the solution to that?

The massive effort that goes into today’s 30-second spots is often justified by the fact that flagship TV commercials provide the basis for countless iterations of digital ad creative within a campaign. The vast amount of impressions within a given campaign will not be on the full TV commercial, but rather the myriad trimmed-down and reformatted iterations that run across channels, platforms and devices. A standard 30-second spot becomes 15 seconds, 10 seconds, five seconds — you name it. That can be part of the strategy.

There’s more to be done, though. Understanding and leveraging consumer attention toward attention outcomes at the ad level represents one of the biggest challenges facing advertisers today. It’s not enough to ideate and execute a 30-second spot that tests well in focus groups and performs well on the annual awards circuit. Advertisers must understand how their storytelling translates across formats and be able to optimize, at a granular level, for maximum audience attention.

Advertisers need to rebalance their optimization efforts, and for smart ones, the project is ongoing. Understanding an audience’s attention, not to mention the emotional connection, becomes all the more important in today’s pandemic-impacted world, where budgets are tight and every media dollar is challenged to do more. A lean advertising landscape looks plausible in the future, and maximizing for the attention outcomes tied to the workhorse of ad inventory will surely be an essential part of the task ahead.

Feature Image Credit: GETTY

By Max Kalehoff

Max Kalehoff is VP of Marketing and Growth at Realeyes. Read Max Kalehoff’s full executive profile here.

Sourced from Forbes

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Targeting Households Using Addressable TV Advertising Is Being Tested

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By Brad Adgate.

After several years, advertisers, content providers, ad tech companies and program distributors have been busy laying the groundwork for dynamically inserted television advertising. Addressable TV allows advertisers to deliver more targeted ads to individual households via cable, satellite or telco set top boxes or web-enhanced “smart” TVs.

The potential for addressable TV advertising could be big. Mitch Oscar, the director of advanced TV strategy for USIM says currently, there are about 54 million MVPD (cable, telco or satellite) households that are linear addressable and 35 million that are ad supported video-on-demand addressable households. As a result, Oscar estimates there are 66 million unduplicated addressable TV households. In addition, Mitch Oscar also notes there are also about 25 million homes with web enhanced TV sets currently capable of receiving addressable TV advertising via automated content recognition (ACR). Some of these homes however, may also be an MVPD subscriber.

Using addressable advertising, an automotive ad can promote a different car model to different households. A politician can insert a different campaign issue to different voters or a prominent packaged goods marketer can advertise different products to different households.

Addressable advertising could give the TV ad industry a much-needed revenue boost. In the first six months of 2020 another 3.8 million homes cancelled their cable TV subscription, resulting in a loss of subscriber fee revenue into the hundreds of millions of dollars. Moreover, the ratings for many top tier entertainment networks have been in decline, as viewers migrate to content from streaming video providers. The loss of audiences has also impacted ad revenue, especially during a recession.

In recent years, annual TV ad spend has been stagnant at around $70 billion. Some industry analysts project ad spend for addressable TV advertising could grow from $1 billion in 2017 to over $5 billion by 2021. The cost of an addressable TV ad would be greater than a typical linear ad, with the idea being a more relevant ad message would elicit a more emotional response to an engaged viewer, resulting with an increase of sales. A study from Bill Harvey Consulting found addressable TV advertising has a higher return-on investment than either digital media or linear television.

In the past, addressable ads were limited to the local two minutes each MVPD sells every hour. These MVPDs use their own set top box tuning data, first party data from an advertiser (or third-party data from Experian and Acxiom), as well as other technology to send targeted ads based on zip codes, cable zones or even down to individual households. The amount of addressable advertising inventory will increase notably as national networks, which sell about 14 to 15 minutes of commercials every hour, get more involved.

There are two industry trials currently taking place in the smart TV universe; Project OAR and Nielsen’s Advanced Video Advertising.

Project OAR: One initiative in addressable TV advertising is Project OAR (standing for Open Addressable Ready) which was created in March 2019. The goal of OAR is to set standards for addressable TV advertising using an open source. OAR is a consortium started by TV manufacturer Vizio and includes many prominent content providers; Disney Media Networks, NBCUniversal, CBS, WarnerMedia’s Turner, Hearst Television, Scripps and AMC Networks. These programmers account for 80% of all linear TV viewership.

Inscape, a data-tracking company owned by Vizio, developed OAR’s technology using ACR. In June 2020, OAR began the first phase a live test which provides more relevant ad messages for both linear and on-demand on smart TV’s. Participating were Fox, ViacomCBS, NBCUniversal, Scripps, and AMC Networks. A second phase is scheduled for mid-August 2020 and will include Disney Media Networks, Discovery, Hearst Television and WarnerMedia.

Project OAR is available on 10 to 13 million web-enhanced Vizio TV’s. One of the goals, is to build scale by allowing more partners into the consortium with hopes they will be available on all “smart” TV’s. This will require the participation of TV manufacturers Samsung, LG and Sony. Also, as part of the OAR consortium are TV ad delivery companies; Comcast’s FreeWheel, AT&T’s Xandr, Google Ad Manager and Invidi that are implementing technical integrations.

Nielsen Advanced Video Advertising: In February 2019 Nielsen launched AVA, focusing on addressable advertising for web enhanced TV sets. The announcement had come after Nielsen acquired addressable TV technology provider Sorenson Media, which was in bankruptcy protection. Nielsen integrated Sorenson with ACR technology from Gracenote and Qterics, a smart TV software and privacy management company, to accelerate their addressable TV initiative.

AVA will be using 15 million smart TV sets from LG Electronics. The addressable initiative has the participation of nine national content providers; A&E Networks, AMC, Discovery, Disney, Fox, NBCUniversal, Univision, ViacomCBS and WarnerMedia. They account for about 90% of all linear viewership. Nielsen had launched a two-phased beta version in January which has been extended until the end of 2020 due to the pandemic. Mitch Oscar notes, as a long-time ratings supplier, Nielsen may be serving ads and verifying the impressions, instead of using a third-party, this could be an issue for advertisers.

On Addressability: In June 2019, Comcast, in partnership with Charter and Cox, formed On Addressability, an addressable consortium with a goal to develop industry definitions and standards, provide education for advertisers, and identify best practices and business standards for transacting on addressable campaigns. Also, the three cable operators hope to pool what they learned from offering addressable advertising to help other content distributors do the same. In June 2020, AMC Networks became the first content partner followed by Discovery in late July. Canoe Ventures provides the backend ad tech support. Collectively, the three cable operators have about 27 million addressable ready TV homes.

Measurement Challenges: With several trials taking place there are several industry issues facing addressable advertising such as inventory maintenance, revenue sharing and privacy. Another issue is audience measurement. Prasad Joglekar, the SVP & General Manager TV, cross platform products at Comscore says, “Addressable TV occupies somewhat of a middle ground between traditional linear TV and digital video advertising. Today, most addressable TV advertising is viewed as an evolution of TV. As such, the default measurement lens that gets applied is the traditional TV lens, which ratings and panel based. This leads to 3 significant measurement issues that various industry players are sorting out:

First, the things that make addressable TV interesting – the ‘breaking’ of the live spot, the delivery of multiple advertisements within the same unit etc. – are precisely the things that make it impossible to measure with a panel, or as a traditional age-gender rating. Trying to shove what is inherently an impression-based buy into a spot-based measurement scheme doesn’t work.

Second, for national addressability, a 30-second unit must be individually enabled in 3 to 5 different operator and distribution platforms. Each operator’s addressable insertion, pacing and reporting stack is unique. It is a hard and laborious process to measure each platform individually, and then combine the numbers to create a true national view.

Third, when an ad is made addressable, some impressions are targeted, but the vast majority are not. On average, ~30% of the impressions in a spot will be targeted. The impressions not targeted are seen as suspect or remnant and tend to be devalued. Decorating those impressions with useful, actionable audience attributes, across the 3 to 5 operators described above, is a measurement and planning problem that must be solved.”

As the industry continues to test addressable advertising and develop standards, Mitch Oscar agrees that similar to digital media, the currency for addressable advertising should be audience based, instead of ratings based, that has been the traditional measurement for linear TV for decades.

Feature Image Credit: GETTY IMAGES

By Brad Adgate

Brad Adgate is an Independent Media Consultant

Sourced from Forbes

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Study: More TV Advertising Can Mean More Dissatisfaction

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Let’s face it — your live TV life may be miserable. Why? Because you watch too much advertising.

The Centre for Economic Policy Research analyzed advertising spending in 27 European nations over the course of three decades to come to this conclusion. The study found when a nation’s ad spending went up, life satisfaction in the country went down or increased less than what was expected.

(I should have figured as much. I always felt bad after binging on “Mad Men.”)

Yes, this is a European study. But here’s the U.S. silver cloud: Seems watching Super Bowl advertising isn’t that bad, according to the study. We can surmise this is because a lot of drunk viewers love to watch advertising featuring the mishaps of average people — mostly male — in many creative ways.

Perhaps the lure to buy more products pushed by TV messaging has collateral effects. TV offers us products that many cannot afford: luxury cars, big-time financial management firm services (which promise easy retirement and big stock market gains), or expensive jewelry.

Consumerism can yield euphoric sentiment among U.S. citizens. But advertising? That’s aspirational at best.

And then there is this.

The richer a country’s society becomes, the more advertising its citizens will see, according to the study. As life satisfaction rose and fell in these countries, advertising costs reflected similar up-and-down trends “a small number of years later.”

Well, in the U.S. — and other countries — we have time-shifting technologies to avoid advertising, especially as it attaches to premium video content on TV networks and new ad-supported digital platforms. But as we all know, there is still plenty of TV advertising that does get seen.

Maybe future addressable advertising will help. Right now it is somewhat depressing, for example, to see so many pharmaceutical ads pitched on live cable TV news network shows — as if these ailments are on the way.

Yet, we keep watching.

Maybe I can find a Super Bowl ad to cheer me up, featuring people laughing while drinking a low-cost beer in a low-rent bar. How about a new, semi-violent, somewhat animated-looking video? Nope. All depressing.

Turn to daytime TV advertising? P&G is running an ad for Febreze and everything isn’t so miserable. The TV life smells good — for the moment.

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Top 4 Drivers Of Advertising Industry Over Next 5 Years

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I spent an amazing morning today at Media Kitchen’s annual Venture Capital Conference in New York City listening to leaders in media, investing and banking talk about “new TV”:  the merging of broadcast TV, social video and everything in between.

This is the 11th year that Media Kitchen CEO Barry Lowenthal has put on the event to help drive critical thinking, inspiration and innovation for our industry.

In my remarks, I focused on what I thought would the key drivers of the advertising industry over the next five years. Here they are — and AI is not one of them:

Direct to consumer. All marketers and media companies that want to be relevant into the next decade are working hard to build direct consumer relationships.

Most incumbents here are in a bad spot. If you are Proctor & Gamble or CBS, you are basically in a B2B business. You make your sales in multiyear agreements with Walmart or Comcast, not to the Sally Browns or Joe Smiths of the world.

Not so a Warby Parker or Amazon Video. They create products and sell them directly to consumers. They know their customers’ names. They can and do talk to them directly.

This is the fast-emerging direct-brand economy  — and nobody has done a better job laying out its potential than the Interactive Advertising Bureau’s Randy Rothenberg, in a must-read for all who care about the future.

ROI. For decades, legacy brand companies have been managing their advertising as a cost center. That’s why they focus so much on outdated media measurements like gross rating points, and are maniacal about per-ad unit pricing and cost-per-thousands.

Not so if you sell direct to consumer. In the world of the Dollar Shave Clubs or Casper mattresses, advertising is a profit center. For them, sales has an ROI for each and every ad. As more companies go direct to consumer, more and more advertising will be managed as profit centers and measured by ROI.

Identity. Cookies, device IDs and IP addresses aren’t identity, even if they help ads follow you across the web. In the world of direct selling, people buy things — and it’s very important for marketers to know who those buyers are. That’s why we are seeing the rise of customer data platforms (CDPs), where companies aggregate customer data sets to make them more accessible and actionable to drive their advertising and marketing.

Critically, these systems contain ways to make data available to drive action-based systems — ad servers, email servers, TV planning systems — without leaking private data, keeping personal data within the walls of the marketers. This area is growing fast, with this week’s Facebook hearings only adding urgency.

TV advertising. What’s old is new again. Nothing sells like sight, sound and motion, and television is unrivaled in reaching more people faster, with more impact, cost-effectively. That’s why so many of the new direct brands like Dollar Shave Club, Warby Parker, Peloton, Wayfair and Ring are building their businesses with TV ads.

As we learn from research by the Video Advertising Bureau, not only does 80% of all video viewing today still occur on linear TV, but digital brands that use it see spikes in their website traffic of hundreds of percentages.

As these drivers take hold, they will have significant implications for our industry. Here are a few:

— Data management platforms and customer relationship management systems will subsumed by CDPs.

— Privacy-safe, software-based identity matching will overtake traditional “safe havens.”

— Analog media wlll become data-optimized, performance-focused and coordinated with digital.

— Platforms will take over TV media analytics/planning/activation/optimization.

— We will see true leverage created relative to the digital walled garden duopoly.

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Performance Is New Programmatic In TV Advertising

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    TV ads are about to undergo a huge shift in how they are bought and sold. This change isn’t just about the big announcements of late about audience-based TV ads – the OpenAP consortia from Fox, Turner and Viacom, as well as NBCU’s announcement that it would reserve $1 billion of its inventory this year for audience-based sales.Nope, something even more fundamental is happening in media, and it’s going to have its biggest impact on TV.

    The future of TV will be about performance. As media legend Alan Cohen proclaimed as he took over as president-CEO of independent agency Quigley-Simpson earlier this year, “Performance media is where it’s at. It’s the new programmatic.”

    While Cohen was speaking of media broadly, the rise of performance-based buying and selling will have its biggest impact on TV advertising, I think.

    Why? Performance dominates digital advertising, because it can be measured and optimized that way. And performance is what marketers truly want, fundamentally, when they buy.

    This was never really possible on TV historically, not at the spot-person level, but now it is. The rise of massive amounts of direct, second-by-second TV viewing data at the person and household level that can be matched to online and offline purchase data in a privacy-safe way means that marketers no longer have to wonder how TV ads work in driving sales or leads. Now they can know. Better yet, now they can use those insights to better plan and optimize their campaigns going forward, maximizing their performance.

    No longer are they hamstrung by only having mix models that take months to conduct, and not getting much deeper than the network or day-part level.

    Is this really new? A bit yes and a bit no. Television has always had performance advertising, you might say, since direct-response ads have been with us almost as long as TV has. That’s different, though. You might also argue that TV has always been a performance medium for marketers who sell regularly and track sales, whether it’s retailers like Walmart or packaged-goods brands like Coca-Cola.

    Without question, retailers have always known in a general way how their TV spend correlated to store traffic and sales. Movie studios have always seen the impact of TV spend in their box-office numbers. So too have airlines, restaurants and hotels when it comes to butts in seats and heads in beds.

    However, TV advertising has never been as predictable, provable and performance-oriented  as new digital channels like search and social have become for marketers. On platforms like Facebook, marketers can buy campaigns that are guaranteed to reach a certain group of people as well as deliver their desired business outcomes. Marketers get to have their cake and eat it too.

    That is where TV is going fast. The notion of “programmatic” TV was a bit of a head fake. The vast, vast majority of TV is not about to be bought and sold on programmatic exchanges — not for many, many years.

    However, the idea that TV will be bought and sold based on performance — that world in unfolding before us right now.

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    Sourced from MediaPost

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