Last May, Viacom CEO Philippe Dauman declared that half the company's ad revenue would come from deals untethered to Nielsen metrics just three years from now, up from less than a third.
It was a bold prediction, but also, increasingly, a reflection of necessity. Viacom's U.S. ad revenue fell 9% in the second quarter, while three-day commercial ratings declined 24% at MTV and 29% at Comedy Central in the third quarter.
Pressure is growing on Viacom's powerful team of data scientists, researchers, former agency executives and former marketers to quickly devise data-driven products that can meet marketers' needs.
But that same pressure makes Viacom the company to watch. "Every day we are becoming less and less reliant on Nielsen ratings," said Jeff Lucas, head of sales for music and entertainment at Viacom.
It's been one year since Kern Schireson, who consulted for the company for four years, was brought in to lead Viacom's data strategy and consumer intelligence. The cable giant subsequently introduced its Viacom Vantage product, which lets marketers target specific types of consumers beyond traditional age and sex demographics. Mr. Schireson's team has now expanded to 170 people. The data strategy and audience science groups number 70 -- about half of those people joined after Mr. Schireson's arrival -- and the research team counts 100 people.
So far Viacom has worked with 11 of the country's biggest marketers, which have used the company's data and software to buy audience-targeted commercial time. Year two will be about offering new capabilities to marketers, allowing more advertisers the chance to buy in, and helping build out new forms of currency, Mr. Schireson said.
Its efforts are getting noticed.
"This absolutely enhances their portfolio," said David Campanelli, senior VP-director of national broadcast, Horizon Media. "I can better prove I am reaching the audience going in, regardless of the size of the audience. I can know I am getting the concentration of the audience I want to reach. Scale becomes less important as we shift more value to targets."
Of course, Viacom isn't the only one investing in data. Nearly every TV network group has some type of offering that promises deeper targeting and better efficiencies for marketers. While Vantage is similar in structure to products from Turner Broadcasting or NBC Universal, however, many observers rate it more advanced than rivals.
One of its biggest advantages is letting marketers optimize their buys once a week or every other week, compared with competing products that only allow for optimization once a month or once a quarter, Mr. Campanelli said. "This is much more near-time than anything we have done historically in TV," he said.
But Viacom remains a ways away from making Vantage a meaningful part of marketers' ad buys. That's where Bryson Gordon, who was appointed senior VP-data strategy at Viacom Vantage earlier this year, comes in. One of the first priorities for Mr. Gordon, who spent more than a decade in consumer marketing, product management and business incubation at Microsoft, is recruiting more marketers.
"We are not going to transform TV advertising if we only cater to the 1%," he said. "We need to be flexible in order to scale to a broad advertiser base."
Earlier this month, Viacom also tapped digital agency veteran Julian Zilberbrand to head up the newly formed audience science group, where he is responsible for integrating data sets across linear, digital and social. His 11 years on the agency side, most recently serving as exec VP-activation standards, insights and technology at ZenithOptimedia, gives him insight into what both agencies and clients really want when it comes to data products, from performance measures to new levels of precision.
Viacom is exploring several fledgling currencies that aim to capture far more than the traditional measures, all the more important because its audiences are younger than the norm. One such effort is Symphony Advanced Media, a cross-platform measurement tool that uses audio recognition to measure viewing on any platform, so long as consumers download the software onto their phones.
The company is also using all of this data internally to inform the way it promotes its own content and to evaluate distribution vehicles. Part of Mr. Zilberbrand's role will involve working with Viacom's marketing teams, and Ms. Fahey Rush has beefed up her staff with the hire of Irina Dzyubinsky, VP-advanced analytics, to identify the best platforms for Viacom's content across video on demand, social media and elsewhere. One criteria, according to Ms. Fahey Rush: Putting Viacom content in places where it can ultimately drive traffic back to TV.
Thanks to its bold predictions -- and the investments it's making to back them up -- Viacom now finds itself part of a small group of media companies on the forefront of reinventing the way TV sells itself, fighting to hold the line against digital competitors.
"TV has not managed the brand as a medium," said Brian Wieser, senior analyst, Pivotal Research Group. "This is part of that reinvention."