As senior VP-video innovations director at Publicis Groupe's Starcom USA, Ms. Scheppach is charged with determining best practices and standards for emerging video technologies and helping clients figure out where best to invest their advertising dollars in venues such as mobile video and viral video.
Below, she discusses initiatives to measure TV viewership, whether or not Madison Avenue can really beat the DVR and the power of high-definition TV, among other topics. She also ponders a world in which consumers can watch network-TV offerings and YouTube videos side by side. You might be surprised by who she thinks is destined to win that contest.
MediaWorks: Starcom has pressed media outlets to make use of second-by-second data from cable set-top boxes that examine viewer behavior. Is there a growing sense that Nielsen's information, long the industry standard, is no longer sufficient or as meaningful?
Tracey Scheppach: One thing you can take to the bank is: TV measurement is going to drastically change, and that is a good thing for not only the marketing community, in terms of accountability, but also the consumer, in terms of increased relevancy. There has been some movement in this year's upfront but still I hear "average commercial minute" and immediately hate two of the three words. There is a better way and I believe it is "exact commercial second." I also believe that we will be using second-by-second data from the set-top box to get there.
With less than 540 days -- yes I have a widget countdown on my desktop -- until the Feb. 19, 2009, digital conversion, I expect the potential second-by-second measurable universe to go from 50% today to 90% of the total TV-viewing universe. That will be a watershed moment in comparison to where we are at today, with such a small sample size driving roughly $70 billion in TV investment. ... What company -- or hopefully, companies -- service the industry is a horse race at this point.
MediaWorks: Can any marketer really beat the DVR? No matter what flashy creative concept Madison Avenue turns out, viewers continue to use the devices to fast-forward past the ads. What solutions are gaining traction, and ultimately, are they really going to work and change the behavior?
Ms. Scheppach: We can absolutely solve the DVR dilemma -- not that we have a choice. A lesson that I have learned from the digital transformation is what the consumer wants, the consumer will get. Don't try to swim upstream regarding a consumer movement -- better to ride the wave. The solution to the DVR dilemma is not a single silver bullet but a full arsenal of techniques. It starts with insights and measurement and that is why Starcom was so excited to purchase the TiVo StopWatch data. The data have really helped us understand how much time-shifting and how much ad-skipping there is, and what programming might need a reinforcement solution to the traditional ad message.
Some creative reinforcements that show promise are addressable advertising; making the ads more relevant and therefore [causing] less skipping; telescoping; and ad banking, where self-selected consumers interactively engage with advertiser product or message either immediately or at a later time of their choosing.
I could even imagine a day when some of the creative online ad units from the likes of Video Egg make their way to TV. Things like Video Egg's little bug that the user can click on opens up, and the video pauses and you go to the ad message, and then go back to the video where you left off. Or Ooyala, where all the content is "hot" [and] you can see that all the content is essentially live and clickable, so if there was an interesting visual -- kind of like "What sweater is Jennifer Aniston wearing?" -- you are able to mouse over it and click to it and figure that all out.
MediaWorks: High-definition TV is gaining traction. What risks do advertisers run by placing the same old spots on HD channels that don't look as good as the programs they interrupt? Are there other, more creative ways to use this medium?
Ms. Scheppach: Clearly, this movement is gaining momentum. Late last year we did a study we called "Are All Views Created Equal?" where we compared our traditional ads in HD and in standard def, and we definitely saw an increase in recall and in such key brand metrics as likeability and purchase intent. They were significantly higher in HD. That is definitely one of the data points I would use to convince my advertisers to shoot their commercials and traffic them in HD. We are seeing more people do that.
MediaWorks: How soon will advertisers be able to finely target the ads they put on TV? Is a scalable, addressable technology really on the way, and will it work across various cable and satellite systems?
Ms. Scheppach: The famous quote, "Every journey starts with a single step," is relevant when talking about addressability. With that said, I am confident we will see a major development in this area before the end of this year -- or a first step on a long journey. Another quote comes to mind as well: "Rome was not built in a day." Or maybe even, "Patience is a virtue."
I am personally one of the industry's biggest believers in addressability, specifically as it relates to household addressability on TV. I am such a big believer for two reasons. One, consumers and markets are both clamoring for relevancy -- evidence from the consumer perspective by the fact that 60% of the ads are skipped when they have control. The second reason is the industry is demanding accountability. Both issues are fundamental benefits of addressability.
I simply want to deliver my desired message only to my true target, and not one defined by age and sex media-planning surrogates. I also want to measure delivery of my message to my true target at a census second-by-second level. This results in both relevancy and accountability.
In terms of scale, we need this to happen on three levels. First is at the cable MSO level. I believe there is solid commitment at this level. One proof point is Comcast saying on its earnings calls to Wall Street that the No. 2 priority after the triple play is addressability. Second is at the regional level. The technology is a market-by-market roll out and MSO's need to be committed and share their rollout timelines at the market level. And the third level is a very important piece and that is rolling out to the national programmer inventory level. All three must happen for addressability to be a success.
MediaWorks: How will broadcast TV develop online? Are people really going to watch full shows on their computer screens, and if not, can you measure the snippets people watch on the web in a meaningful way that will satisfy advertisers and their need to know what their ad dollars spent on this venue are really doing?
Ms. Scheppach: What we have found is the majority of the viewers watch the entire episode. ... Networks appear to still take up about 2% of overall streaming activity on a monthly basis. This is compared to YouTube at roughly 15%-20% of streaming activity. This comparison is a bit misleading, as it appears as though users are consuming more videos a month on YouTube, but are spending more time on the networks. In April, ComScore reported that, on average, 23.5 videos were consumed per user on YouTube over the course of the month, with an average 56.7 minutes for the month. The ComScore ABC Primetime report showed that, on average, users consumed 14 videos a month, but stayed an average length of 72.6 minutes a month per user. CBS showed similar results.
We are seeing monthly streams increase across the network. ... We expect to see additional growth in Q4 with the launch of the new broadcast season. The programmers have done a great job supporting the offerings with solid research that helps us evaluate who is watching and why. We have an understanding of the demographic we are reaching and the recall of our ad messages. We have seen unaided recall has been between 50% and 70% and aided recall between 70% and 80% across all networks.
Moving forward, we will be receiving third-party tracking metrics from all networks. This will allow us to track impressions as well as length of stay with a commercial pod. This is important because we will understand exactly how long the user stayed with our clients' messaging.
What about shorter form? Of course, shorter form will have a significant share of impression and also minutes associated with video consumption, but one lesson that I have learned from TiVo is when a consumer has control over what they want to watch and when, the long tail is just not that long. People want to watch the prime programming content at a place and time that is convenient to them. Once all of these shows are on all platforms, people are going to watch prime content. That's not to say they aren't going to watch YouTube, but there's a lot of hype that the tail is really long, and what I'm saying is all this content is going to find its place and the tail is not that long.