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November 16, 2014

by Bart Brassil

I was recently listening to Marc Knopfler’s iconic guitar riff for Dire Straight’s, “Money for Nothing,” and it made me think about the changing landscape of TV. The song’s MTV video aired in a time when cable was pretty cheap - almost free - since the impressions and CPMs were so low. As the very first computer-generated music video, it was groundbreaking; even though Marc Knopfler was anti-video, Warner Brothers insisted on using computer-animated characters, and it ultimately went on to win MTV’s Video of the Year.

Times have changed since then. Music videos have largely become a thing of the past, and CPMs are significantly higher across the board. The TV landscape is changing, and regardless of what Knopfler wants you to believe, nothing in this world is free.  

A new industry trend, developing over the last two years, is the move to monetize impressions that traditionally have been “free.”  With the convergence of the linear television and digital inventories, content owners are finding creative ways to save precious inventory and increase the value of previously cheaper inventory. The national broadcasters’ deals go by many different names: CW uses the term “convergence” deals; ABC calls its offerings “Unified”, CBS uses “Fluidity”, and NBC has “Flex ADUs” (“Flexible Audience Deficiency Units”). And the cable networks are just around the corner, getting ready to offer similar deals.

What’s at stake here?  A fundamental change to how guaranteed deals are met by the vendors. Previously, when a deal did not meet the agreed-upon guaranteed CPM level for their target, the vendors had to offer free linear units as makegoods.  This caused a potential waste of linear inventory.  For example, if the network had to make up 5 rating points to achieve the guarantee, the audience deficiency units (ADUs) offered may actually deliver above the 5 rating points, thereby wasting the limited supply of units (and impressions) available for sale. 

This is where digital inventory becomes very useful.  The networks can literally deliver the exact number of impressions (GRPs) missed by serving them online, and, once met, immediately stop serving commercials for that advertiser/brand.  Not only do they achieve the guarantee of the deal using previously less expensive inventory priced at higher CPMs, but they also retain those perishable linear units for sale in the scatter market.  The networks have extended their initial foray into online makegoods and have begun to create annual deals based on this model.  For example, an ABC “Unified” deal will provide “an annual guarantee on a single demographic against the total number of demo impressions purchased by an advertiser, across all screens/platforms, at a contract level.  Guarantees are not offered at the brand, flight or platform level.”  

Some networks essentially say that if a certain percentage of impressions can be delivered online outright, or if the linear part of the deal does not meet the guarantee, those impressions go straight to the digital inventory to provide delivery.  They embed the “Flex ADUs” right from the start, knowing they will under-deliver.  Less expensive impressions just became more valuable from the vendor’s point of view.

Given all this, the question remains: is television in “dire straits”?  According to Nielsen, television viewership is still increasing, with over 60 hours watched per week in a household.  Yes, there have been some decreases in age groups like teens and 18-24 year olds, the latter having either cut the cord or only using OTT (over the top) to receive their content, but the vast majority still watch linear content instead of digital or mobile.  Yes, there is fragmentation, but with the networks adapting to these changes to make sure they follow the viewer wherever they go, and monetizing these impressions at linear prices, television is not in “dire straits”. 

However, this leaves a challenge for the linear buyers: they now have to adapt to the digital world and manage online video throughout the entire buy workflow and report that back to their advertisers.  This is where Mediaocean steps in to meet that challenge. We develop the proper workflow tools that meet the needs of these converged deals, so our users can flex their muscles seamlessly across platforms. 

 

Technology is providing opportunities to advertisers that they haven't before. In this video, Michael Palmer, SVP Sales of Optica, explains the trends that are influencing television and providing marketers with more flexibility and automation. And to find more thought leadership videos on the advertising space, visit our blog today.

 

Last week, Mediaocean hosted a Connect Series session titled "Programmatic Uncut: An Honest Conversation About the Buzzword of Today". This session featured panelists from AOL, Yahoo, Pubmatic, and Deutsch, moderated by our CEO, Bill Wise. In this session, these thought leaders spoke about programmatic and how it influences the way they work in the industry and with each other. Check out the full session in this video today and be on the look out for more thought leadership videos on our blog.

In this interview from Advertising Week, our CEO Bill Wise talks about how programmatic is all about efficiency and storytelling, and not just about RTB and ad exchanges. Hear what he has to say about programmatic and the trends in advertising he's most excited about in this video, and be sure to check out more videos on our blog.

 

Programmatic is going to make the RFP process change, and in this video, our CTO, Vedant Sampath, explains how the need to RFP is evolving in this process. He also talks about how planners and buyers can maximize their time with fewer manual processes. Check out his video today and view more thought leadership videos on our blog.

 

In this video, our CTO Vedant Sampath gives a brief history of the RFP and explains why the RFP came into being in digital media. Check out his video below and see more thought leadership posts on our blog.

 

Today’s advertising industry is changing rapidly, with consumers actively engaging in an ever-diverse mix of online and offline media channels on a daily basis.

Individuals now have more control over how, when and where they engage with different media and – as a result – marketing models need to be dynamic and agile to keep up with changing consumer demands.

Over half (53%) of all UK adults now media multi-task on a weekly basis and the average user spends seven hours a day consuming media across multiple screens. In response to this changing behaviour, marketers are seeking to provide a seamless brand experience and deliver consistent messages across all new and emerging channels – whether through traditional, or digital channels including mobile, desktop or tablet.

Some retailers, such as Burberry, are embracing the challenge of using cross-channel platforms to drive sales, but for others the prospect of delivering effective campaigns across multiple devices is daunting, preventing them from making the leap to multi-channel marketing.

So, how can marketers embrace the age of media multi-tasking?

The first step for brands is understanding that multi-channel marketing campaigns need to be planned and designed to work across all channels from the outset, rather than operating in silos. The device should never be the starting point for the campaign; instead the goal should be to deliver the right content to the right customer, at the right time, regardless of their chosen channel.

Marketers need to be able to identify the media that their most valuable customers are using at any given point and have the agility to focus their efforts on that media in real-time. And with this in mind, convergence technologies that bridge the gap between traditional and digital buying methods are an effective solution to this issue.

But it is the challenge of breaking down these marketing silos that present a further hurdle for the industry – and effective data management is the key to overcoming this. As the proportion of online consumer spending reaches an all-time high – with the latest figures predicting that consumers will each spend on average £4,000 online this year – so will the volume of available information.

As technological solutions advance in line with this, increasingly granular data will become available in the marketplace enabling marketers to more accurately target consumers across all devices, rather than taking a channel-by-channel approach.
To benefit from the power of the huge volume of data at their fingertips, marketers need to identify the questions required by their business and use data to provide these answers.

To enable this, information needs to be shared across the organisation, and a single, centralised platform should be created so that individual data sets – such as media metrics and sales data – can be connected and overlaid to create meaningful insights that marketers can use to make educated decisions about the content and positioning of ads.

This includes using effective tools to enable different media platforms, and the convergence and streamlining of the ad sales process across all channels.

The integration of ad servers, data solution providers, supply businesses and technology providers – along with agencies and sellers – coupled with the automisation of all media ad sales, makes it easier for marketers to perform cross-channel buying.
Delivering these elements alone would bring marketers one-step closer to a holistic approach to managing and executing their campaigns, as opposed to marketing by device or channel.

Multi-channel is here to stay and as more devices enter the market, consumer behaviour will become increasingly complex. The goal of marketers should always be to deliver insightful campaigns – driven by intelligent data – across the entire spectrum of media channels and devices. Technology that bridges online and offline purchasing and consolidates all the disparate data is a growing necessity for modern marketers.

Those who choose to adopt will find that, less of their time will be spent thinking about the channels through which brands are delivering ads, and more about using data in increasingly strategic ways to drive reach and ROI across all channels.

Read more: http://wallblog.co.uk/2014/10/17/convergence-is-key-the-future-of-the-ad...

We spoke with Jon Collins, President of Integrated Advertising at Framestore, and asked him about the new trend in advertising that keeps him awake at night and how he's leveraging technology for global marketing campaigns. Check out his responses in this video, and for more on Advertising Week, visit our blog.

Daniel Zeff, CEO of Evidently, speaks on what keeps him awake at night and how he sees the advertising industry changing in the next 3 years. He notes that brands are getting better and better at storytelling, so the industry is no longer about selling, but inviting people to share in a story.

Check out his interview today and watch more from Advertising Week by visiting our blog.

Cindy Stockwell, Chief Media Officer at Hill Holliday, stopped by during Advertising Week for this interview and spoke about programmatic and how she sees the advertising space changing in the next three years. 

Check out her interview below and see more videos from Advertising Week on our blog.

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