Kate Bulkley, Media Analyst.

TV advertising debate hots up

By Kate Bulkley

Broadcast News

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For Broadcast November 06, 2014

Both camps make valid points, but who is right? asks Kate Bulkley

There are major questions about the future of TV advertising, and some pretty strong opinions on what the answers are. A Broadcast roundtable last week, entitled Next Generation TV Advertising Solutions – Are Broadcasters Ready?, brought together a group of senior execs to debate just that.

Broadly, there are two camps: those still playing by traditional TV rules, and those who have stepped into what WPP boss Martin Sorrell described as a world of “Maths Men”, in which Big Data and analytics power programmatic buying platforms.

Proponents of the latter argue that it is more efficient than how ads have traditionally been sold – witness the $3.7bn (£2.3bn) purchase of digital and analytics group Sapient Corp by WPP rival Publicis earlier this week. But detractors of programmatic point to technological difficulties, including fraud, and highlight cases where intelligent computer programmes perpetrate bogus views and fake click-throughs. So who’s right? Channel 4 has been pioneering in its use of data collected from 11 million viewers via its VoD service, providing them with targeted offers. Facebook has previously talked about its “mobile first” approach, and C4 said a whopping 40% of its VoD views are on mobile devices.

“The cost per thousand we’re getting digitally are very similar or, in some cases, premium to what we’re getting on linear TV and we’re selling out,” said Jonathan Allen, director of sales at C4.

Sky’s media sales unit has also embraced Big Data to offer targeted advertising to clients, many of whom are new to TV advertising.

Head of futures David Fisher said “hyper addressability and biddable media” is very exciting technology, but TV has to ensure it does not throw the baby out with the bathwater. Many publishers have handed over their data relationship to a third party. “Broadcasters would be absolutely mad to do that,” Fisher said.

ITV group commercial sales director Kelly Williams added: “We find ourselves in this situation where lots of the industry is talking about personalisation and targeting, but is it effective? It might be more efficient, but my question is, is it effective advertising?”

ITV has 7m registered VoD users and will ramp that up “over the next few months”, but Williams raised a note of caution about how ITV will use the data going forward. “If using that data can create value that in turn we can create revenue out of, we will. But if the cost of collecting that data and analysing it is too great for the return, we won’t,” Williams said.

Nick Bampton, commercial ad sales director at Channel 5, said one of the “greatest values of TV” is what is commonly called “advertising wastage”, or the people who see your advert who aren’t the target.

Imagine a 14-year-old boy seeing an advert for Pampers nappies. He is not the target today – but in the future he may become a father, at which point he will already be familiar with the brand. “That wouldn’t happen in programmatic and in TV you don’t pay for [the 14-year-old] either, because you are only paying for the adults in that demo,” said Brampton.

Chris Dobson, executive chairman of advertising technology platform The Exchange Lab, said that programmatic selling needs to “prove itself ” further.

But he also warned that the ad market is evolving so rapidly that brands and advertisers are “getting used to a data-rich environment… and [brands] are going to question whether extrapolating people in a Barb panel is robust”.

Whether it is a case of either/or is also open to debate. UKTV director of commercial and business development Dan Fahey put it this way: “I think we’re inclined to see targeted, automated selling as something that’s happening around the fringe for our viewers; it’s not affecting the core robustness of the TV model. It’s a sustaining innovation. I don’t think it’s disruptive really. It’s sustaining around the edges.”

When and if the edges overtake the centre is open to debate. Starcom Mediavest managing director for precision marketing Ben Chesters said brands are looking at the world “like Google, Facebook and Amazon Prime, where they know what you like and what you buy”.

“It’s about evolving with opportunities rather than holding, and keeping firmly hold of what you are ultimately really good at,” he said.

Broadcast TV remains the king of brand advertising but the sector is clearly becoming less TV-centric – and that does pose a threat to broadcasters.

But it really isn’t about programmatic versus traditional sales. It is more about how to bring together the many screens that audiences are using to the benefit of broadcasters and advertisers. “It’s a matter of trading and, hopefully, creating value,” said C4’s Allen.

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