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Open Mic: Pay-TV operators and audience data

Wed, 09/11/2013 - 6:59pm
Chris Hock, senior vice president, product management and marketing- BlackArrow

Coming off a resurgence from the success of programs such as “Desperate Housewives,” “Lost,” and “Grey’s Anatomy,” ABC in 2005 launched a new website that prominently made full-length programs available to anyone with an Internet connection and a browser. Delivered using relatively new Adobe Flash video technology, programs were quickly and immediately available for the first time to viewers who could watch their favorite TV shows whenever they wanted.

Other broadcasters quickly followed suit, starting a new way in which consumers would think about watching TV.

While some of the technology may have changed, one fundamental element of those early days persists: The fact that the owners and licensees of content can now use the Internet to deliver their content directly to consumers, bypassing the traditional pay-TV operator. The introduction of the tablet and other consumer electronic devices are facilitating this by making it even easier for viewers to watch where and when they want.

With both programmers and new OTT market entrants jumping on this trend the question is – where do the traditional pay- TV operators fit in the future and how do they add value? While all of these viewing options are great for the consumer, they open up a giant can of worms for the advertisers and agencies. Until now, the TV advertising industry thrived by taking a 30-second video ad and “spraying it” across TV. With TV buys, advertisers got large reach and were able to control the average frequency with which their audience saw the ad—two key variables that drive gross ratings points (GRPs), the basis for the entire $70 billion plus U.S. TV ad industry.

Now that TV can go over any screen and can be watched at any time, the problem of controlling reach and frequency is exponentially more complex. To reach people who are watching TV time-shifted or on devices, advertisers need not only to buy traditional linear TV, but also to buy campaigns on all the other new TV platforms as well — a cost prohibitive proposition. Further, they need to be able to control the frequency with which the target audience sees the ad. They also need robust, real-time reporting to confirm the viewer saw the ad and, ideally, measure its effectiveness.

While the latest OTT (over-the-top) vendor may have been grabbing all of the press and attention, pay-TV operators have also been leveraging the emergence of IP for delivering video.

Operators innovated by offering on demand programming not only from their traditional TV services, but also via their web portals and tablet applications. They continue to innovate today by leveraging IP to deliver live, linear programming to new platforms and devices and by allowing viewers to time-shift via cloud based DVR services.

In addition, leading pay TV operators have quietly rolled out dynamic ad insertion (DAI) to a point where the footprint has reached critical mass; 30 million North American households across 27 of the top 30 DMAs in the nation. As billions of impressions run through those systems, DAI, coupled with a sharp increase in the rise of on-demand viewing, is making VOD a must-have platform for advertisers.

Here’s where it starts to get even more interesting. Operators are also starting to use DAI for inserting ads in linear TV delivered across those new TV platforms.

By bolting on real-time “audience data services” to that DAI infrastructure, and then hooking this up to their new TV platforms (addressable TV, VOD, cloud DVR, TVE, Linear IP ABR streaming, etc.), operators are laying the foundation to solve the reach, frequency and measurement challenges.

Using a subscriber information service (SIS), operators can tie viewers back to the audience segments that advertisers want to reach. DAI can then be used to enable advertisers to reach their target audiences on any platform, whether the content is time-shifted or live. The efficiencies gained by delivering ads only to the right audience will make it feasible for operators to get a higher price for their inventory and for advertisers to cost-effectively run campaigns on all TV platforms.

As advertising is executed across their TV platforms, operators can leverage that “return path data” to solve the frequency and real-time reporting and measurement issues. Advertisers can access critical viewing information they need to determine the performance of the campaign, including what ad was viewed, how often was it viewed, and whether the viewer fast forwarded through the ad.

So, how do operators add value in this world of “New TV?” With their data.

Audience data—both market segmentation data on viewers as well as return path data tying performance back to viewers—will be a fundamental requirement for executing TV advertising as it flows across multiple screens and goes from live to time-shifted.

All of this data flows through the operators' networks. They are in the best position to leverage it—both for their own ad sales efforts as well as for the rest of the TV ecosystem— and get paid doing so.

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