TV Over the Web Pushes Adland Forward, but Poses New Questions

Measurement May Be the Biggest Question in an 'Over the Top' World

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New services ought to encourage viewership, but what else will they mean?
New services ought to encourage viewership, but what else will they mean?
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Advertisers and media buyers aren't sure how new stand-alone streaming services from CBS and HBO will impact marketers, but they are adamant about one thing: Measuring digital audiences needs a major evolution if networks expect their new ventures to attract big ad dollars.

Rob Master, VP-media for the Americas and Europe at Unilever, said he sees the HBO move as one of the bigger developments in media of late. It could have a substantial impact on the TV landscape, including strengthening growth in stripped-down cable subscriptions -- bundles that include the basics but leave off many of the other channels that have padded subscribers' bills.

But when it comes to commercial networks like CBS, advertisers are going to need to know more about viewership in ever-increasing venues.

"As the landscape changes, it will be most interesting to see how the measurement providers keep up with technology to ensure audiences are being captured across all platforms," Lori Hiltz, CEO, Havas Media North America, said in email. "If the audiences aren't being measured properly, they will have debatable value to advertisers."

"This a la carte trend does make it more difficult to aggregate and measure audiences as they continue to spread across screens," said David Cohen, chief investment officer, UM, said via email. "This is some of the things that Nielsen and Rentrak and others are trying to crack, but in a panel-based research world it is really hard to get a large enough sample across so many content and consumption options."

One senior network sales executive said the new so-called "over-the-top" services could lend new momentum to a shift toward measuring audiences digitally, a la impressions online, and away from estimates that underpin TV ratings. Audiences certainly appear to be available in digital venues: In some cases cable networks already are generating more video impressions for the same programing from mobile devices as they are from conventional TV, the executive said.

Developing a common definition of gross rating points that applies across media is one part of a just-approved plan to meet what Association of National Advertisers CEO Bob Liodice in May referred to as the group's "Measurement Mandate," said Gayle Fuguitt, CEO of the Advertising Research Foundation.

The living room vs. the whole wide world
Advertisers will also need to consider the viewing context for streaming services, not just the number of eyeballs accumulated, according to Amanda Richman, president-investment and activation, Starcom.

A living-room audience may be more focused on programming and commercials than a commuter, for example, watching "The Good Wife" on a city bus -- and trying not to miss her stop.

"It won't just be about who you are, but where you are will also matter," Ms. Richman said.

On the other hand, viewers who order up particular shows are often considered more locked-in than the bored channel-surfer. "This is a good thing for consumers, and ultimately, will be a good thing for marketers," Mr. Cohen said. "We know that engaged consumers are more receptive to advertising and have a greater likelihood to remember brands surrounding (and in) engaging content."

In the near term, media buyers and advertising executives don't expect the new services to significantly alter how TV time is bought and sold. While CBS and HBO's moves have demonstrated the need to move quickly -- and they won't be the last, either -- media agencies have already been contemplating how to update the longstanding model for an increasingly digital and on-demand environment.

"We are already thinking about TV advertising differently, which is why we always recommend a holistic video approach," Amy Ginsberg, managing director-investment, Initiative, said in an email. "Consumers are watching content where they want and when they want and the announcements by HBO and CBS will simply allow people to do more of that. It isn't enough to just target someone on TV and think that they are going to take action. There are many ways to reach your consumer [and] we try to consider them all with our video plans."

Mr. Cohen echoed that sentiment. "We are already structured in a platform-neutral (or video fluidity) model, so structure doesn't really change, but negotiations will change as the currency will undoubtedly need to get more precise than it has been historically," Mr. Cohen said.

Expanding audiences
Advertisers may also be excited about the potential for new services from commercial-supported networks to expand the audiences for programs and their ads -- particularly among younger consumers who perhaps weren't cable subscribers.

Ms. Richman praised CBS, saying the move "demonstrates networks are not putting their head in the sand." Instead of letting Netflix monopolize consumers by encouraging ad-free "binge-watching" CBS's "All Access" service will compete for viewers who want to do the same (without eliminating ads).

"All Access" will deliver full seasons of most current prime-time shows, daytime and late night programming, as well as a library of older content, for $5.99 a month.

"This gives the opportunity to figure out what's the role of advertising here, instead of Netflix deciding that," Ms. Richman said.

"The CBS move is smart; it allows CBS to expand and further monetize its coverage beyond households having a cable relationship," said Havas's Ms. Hiltz. "OTT is growing as cord cutting increases. CBS now has an opportunity to participate alongside players like Netflix and Crackle."

These digital options could also improve ad targeting, creating an influx of data that allows marketers to know more about viewers.

This will create "interesting, high-value and engaging advertising opportunities," Ms. Hiltz added. "Marketers like the ability to further customize services and messaging based on the direct relationship with the consumer."

One senior media executive at a global marketer said he expects the move to help fuel a continued shift of industry funds from TV to online video, as long as the online media can provide the accountability and deal transparency that major marketers want.

Still, there are a lot of unknowns that will need to be figured out before the industry can get real clarity. There's the question of how CBS's over-the-top service will be different for advertisers who currently buy inventory in the network's streaming content on CBS.com and through its mobile app.

And what happens if much of the industry creates similar services?

An ABC spokeswoman said there are no immediate plans to alter its current strategy, which lets non-cable subscribers watch full episodes of current shows via the Watch ABC app on demand, but not before a week after the program airs, and only for a limited time.

The CW's mobile and tablet app makes the most recent five episodes of its current shows available to stream the morning after they air without authentication of a pay-TV subscription. The CW declined to comment on its plans moving forward.

But at least a few other networks could make similar announcements in the near future.

CBS Corp. CEO Leslie Moonves has previously hinted that the company is considering a stand-alone subscription service for its premium cable network Showtime. The network also has a 24-hour digital news network in the works.

The Weather Channel is considering an over-the-top service. "We are exploring the possibilities of bringing the strength of all our screens together in a hybrid product," a company spokeswoman said. "We are in the early stages. Our MVPD partners are all thinking about various possibilities across multiple screens and we are a natural partner for them."

But whether there will be a big enough subscriber base and just how these services could alter the cable model remain to be seen.

And several media buyers and analysts are skeptical of the commercial appeal of CBS's platform. The lack of major sports programming, like the NFL in particular, likely limits the number of people who would find the service compelling, wrote David Bank, analyst, RBC Capital Markets, in a research note.

Setting a price that consumers pay directly to CBS also could help the network in its carriage negotiations with cable and satellite companies, allowing it to argue that consumers clearly think the network is worth that much money.

"By establishing a stand-alone price for consumers, we believe CBS creates a pricing umbrella that relies on something beyond the opaque oligopoly of a handful of MVPDs [multichannel video programming distributor]," Mr. Bank wrote. "This will be important in the coming years for both retransmission consent negotiations and compensation negotiations."

Contributing: Jack Neff

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