Transforming the TV market through ‘audience as currency’

I believe this moment of time we’re in—what many refer to as our new normal—will be remembered as the time that accelerated the shift to audience as a currency.

Our current environment has forced the need for greater flexibility, accountability powered by data and precision targeting, and messaging that’s more relevant and impactful to consumers.

Over the last month, we’ve seen a groundswell of support for accelerating beyond traditional age and gender metrics to an audience-based approach as marketers seek to connect with consumers in new and more personalized ways.

With the evolution of consumption patterns and underlying consumer journey, what was once considered either a discrete “branding” or a “performance” technique is now less defined as a result of the COVID-19 pandemic. This time of transformation is showing us, more than ever, that upper-funnel branding and conversion-based tactics are way more effective when they coexist.

At the root of this shift is increased access to high-fidelity data.

We’re seeing brands use data and targeting to improve the relevance of brand messages across the funnel. For instance, advertisers may leverage geotargeting and insights to uniquely personalize messaging in different regions as states work through staggered phases of reopening. Or advertisers may leverage viewership insights from set-top box data to aid in branding a new entertainment release—while simultaneously driving downloads of an accompanying app.

But it’s worth noting that this transformation toward audience as currency was already underway before COVID-19, and the driver was access to high-value data. Three of the major holding companies spent in excess of $8 billion in the last two years to acquire Merkle, Acxiom and Epsilon to create audience-based tools using actual census-level data.

Publishers and programmers with subscription relationships at the household or device level have also partnered with these agencies to connect third-party data sets with first-party viewership data and premium inventory as identity-based solutions emerged as an alternative to cookies and samples.

The point is, the marketplace was already evolving to meet the new needs of buyers.

Audiences, upfronts will complement each other

Here’s the catch: Despite the evolution to audience-based buying powered by data, I don’t believe the upfronts—the way TV has traditionally been bought and sold for decades—is going away anytime soon.

Advertisers historically committed upfront spend as a way to secure placement against new programming, and that ability of reserving media upfront was put in place to protect the scarcity and premium nature of the inventory and to create the pricing stability advertisers needed based on seasonality.

Because TV is scarce and isn’t traded through real-time bidding the way we’ve seen in digital, the underlying dynamic of TV buying—securing tonnage at a fixed price—hasn’t changed, even if the dynamics around the event where it was traditionally purchased have. Planning cycles and agreed-upon booking rates, or the notion of a commitment, are the long-established fundamentals of the TV business

But with better data created by the shift to audience-based buying, advertisers will have a new definition of “scarce.” Scarcity will mean impressions overall, but also the scarcity of the specific audience type the advertiser is looking to reach.

Case in point: At any given time only a certain percentage of the population is in-market to buy a vehicle. Using a combination of third- and first-party viewership data, these new planning tools can now size the available premium video in-market impressions to match this desired audience. By definition, it’s unlikely there will be enough of this audience to satisfy the demand of all auto makers, resulting in a scenario where the brands that secure this real estate in advance will have a competitive advantage.

The future of upfronts

Although our current climate has invited healthy debate about the future of the upfront model and cast a new light on scarcity, as I mentioned above, my prediction is the fundamentals of the upfronts aren’t going away. We’ll just see greater flexibility, greater precision in audience targeting and greater creativity fueling it.

From effectively managing reach and frequency to enabling advertisers to tailor relevant messages to reach specific households, audience-based buying and addressability have empowered buyers in these uncertain times.

On the flip side, media and entertainment companies are powerful storytellers and have always adapted to meet market demand. We’re seeing many move swiftly to offer a broad range of inventory opportunities and custom content solutions to suit both upper-funnel and conversion-based tactics.

Tactics such as addressable and data-driven linear help maximize advertisers’ media investments, while new technology solutions that deliver better automation, data insights and, above all, flexibility will help us all to continue driving better results and outcomes for marketers—and better ad experiences for consumers.

Although the customer journey has certainly changed as tactics around digital and offline converge, the acceleration of high-fidelity data to drive upper-funnel awareness is key to not only helping advertisers meet rigorous financial goals set by their finance teams, but also to connect and engage the end consumer at every point in their journey.