The TV business is being turned upside down, in particular by the use of data in programmatic TV. Lewis Sherlock, Senior Director at Adap.tv examines whether the ‘old’ ways of doing business in TV are still relevant, and why metrics must expand beyond age and gender demographics.
Emerging trends, such as social media and the advent of the second screen are turning the TV business upside down. While there are many questions about how this will play out, it is clear to those in the industry that TV’s future – and much of its present – is all about data. Data can predict which actors will work best for a specific show, gauge the ‘Twitter rating’ of a new series, be used by Netflix to target genres of original content to invest in, etc.
But while this results in much discussion and many column inches around the ‘old’ ways of doing business in TV no longer applying in today’s world, it’s important to remember that we’ve been here before. More than 20 years ago, when the Internet achieved critical mass, the transformation in communications that its connective tissue facilitated powered a revolution in business and culture.
Traditional, or linear, TV advertising has lagged behind the cutting edge advancements in digital and social media, but that is now changing very quickly. Many are understandably uncomfortable with the unfamiliar territory in which they now find themselves, but broadcasters and advertisers can draw a few lessons from the transformations brought by the Internet:
Data is only valuable if it is accessible
Some proclaim that data is the ‘new oil’ for TV. Extending the analogy, this means it must be managed efficiently for users to reap the rewards. When the World Wide Web started out, the amount of information available could be sorted and retrieved within directories. But directories quickly grew unwieldy as the number of users and websites exploded, paving the way for search engines to organise information.
The amount of data available and applicable for television advertising – viewing data, purchase behaviour data and customer data – is approaching, and may have already exceeded, the threshold of manageability for many organisations. This demands platform technology that can ingest, organise, and make sense of it all in an automated fashion, and leverage TV-specific information in conjunction with data from other relevant media channels, such as online video and mobile. Data only has value when it can be accessed, analysed and acted on quickly and efficiently.
Metrics must expand beyond age and gender demographics
For 60 years, television has been valued on age and gender demographics (eg adults aged 18-49), because that was all that was available. But the advent of set-top box data and other sources of audience insight have created new opportunities for advertisers.
The industry must now embrace buying, optimising and measuring TV ads on psychographic, purchase behaviour and interest attributes that have proven to drive elevated sales (e.g. football fans, who like a specific boot brand).
This requires an open approach to data management so that disparate systems can talk to one another, and data signals are portable, rather than being locked into walled gardens. The value of data is exponential when it can be analysed holistically.
Change is the future
Harnessing data for unprecedented insight offers countless possibilities for the television industry, and many people are excited by and confident about the prospect. But, as with any nascent sector, there are others who feel that it is unrealistic to cast programmatic technology in the leading role.
Similarly, there were commentators 20 years ago for whom it was inconceivable that commerce and business would be successful on the web. Countless enterprises have disproved this and, in retrospect, more sophisticated technology and the power of the Internet to connect people made the huge growth of online commerce inevitable.
No-one can deny the enduring popularity of TV and this is, to a great degree, responsible for driving change. It is not possible to predict accurately what the future will bring, but TV as we know it will change – and indeed already is, with the success of Netflix for example a good proof point. The business side is also seeing seismic shifts as publishers and advertisers take advantage of the wealth of data that is now available to them.
These are early days, but the Internet revolution shows that the journey towards the convergence of digital and TV will be exciting and generate many, previously unimagined, possibilities.
By Lewis Sherlock
Senior Director, Strategic Accounts, EMEA
Adap.tv, a division of AOL Platforms