Uploaded byHimanshu Bari
Addressable TV
This document discusses the opportunities in addressable TV advertising. It outlines two goals: understanding the addressable TV market dynamics in the US and how set-top box data can be used for better online ad targeting and vice versa. It then provides an overview of how the living room and TV watching behaviors have changed, as well as the technology infrastructure that is coming together to enable addressability, including set-top box data and smart TVs/devices. The document envisions the potential of an integrated system that uses TV data for targeted ads across online, mobile and TV platforms, and interactions between the platforms, while also noting several challenges that must be addressed first.
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Addressable TV
- 1. Addressable TV Himanshu Bari Copyright – Himanshu Bari. Do not share 4/25/14 Overview & Opportunities
- 2. Goals 1. Understand broad dynamics of the addressable TV market (US ONLY) 2. How can set-‐top box data be used for beIer online Ad targeLng and vice-‐versa
- 3. Connec>ng the TV data island Data Connec>on Pla@orm Online Mobile TV Other(Cars..) First party OR Third party data Granular| Complete| Mul>-‐dimensional Display |Search | Video | Measurement | Content
- 4. Consumer TV watching behavior has changed • FragmentaLon of TV audience – No longer loyal to networks but to shows – Hundreds of channels & proliferaLon of ‘reality TV’ – VOD • Change in habits – DVR & Ad Skipping – Watch on demand and not linear TV • Second screening – Interact or reach via online/mobile/social media
- 5. Living room has changed • Smart TVs As of Q1-‐2012, per NPD & Neilson there were 25 million U.S. smart TV homes, but only 12 million are connected to the Internet and the raLo is not growing • Game consoles (Q1-‐2012)
- 6. Conversion to digital almost done… • Digital needed for 2-‐way signal exchange for addressable TV • Satellite (aka DBS) & Telcos are digital from incepLon • HD enabled set-‐top boxes – around 40M homes (Q1-‐2012)
- 7. Technology infrastructure coming together Inside the Home Distributors • Set-‐top box data goldmine • Smart TVs & game consoles • Smartphones • Big data processing infrastructure (open source + cloud) • 90% conversion to digital done Complete Customer Data Fair Reach 42M homes addressable with Live TV or VOD in CY-‐2014
- 8. Makes all of us dream of the addressable TV opportunity Consumers watch VOD or Live TV Targeted ad is served Consumer interacts with ad on screen or on Smartphone Online & mobile ads follow-‐up on TV ads Consumers take some acLon Target Measure Analyze OpLmize Cross plaeorm
- 9. And a lot of $$$$ • How much? – $11.6 billion by 2015 – per Bank of America ( needs verificaLon) – Growth not clear • Which budget is the money coming from? A piece of $70B Steal from other media New money from priced out buyers Easier Harder $2.4B PoliLcal Ads
- 10. The pie will be split among fewer players
- 11. Player incen>ves are aligned to realize benefits Player Category Incen>ve Incen>ve Strength Market Power Brands • Reduce spend • Focused targeLng before criLcal events like product launches • Tie TV with online & mobile Very high Varies Agencies • Leverage data to make smarter buying decisions • Their clients are pushing them Neutral Medium Data providers • Incremental revenue Very high Medium Programma>c infrastructure + measurement • Capture market share in a nascent & evolving area Very high Low Distributors • MoneLze their data • BeIer Ad targeLng • NegoLaLng power against the networks Very high Very high Networks • Stem $ flow to digital • Higher CPMs for underuLlized inventory • Close loop with second screen Medium Very high Hence, addressability is inevitable…
- 12. But we s>ll need to cross the chasm Early majority Late majority Inventory - Remnant & local - DVR & VOD - All day parts - Pieces of primetime Sellers - Cable MSOs - Virtual MSOs - Major networks Pricing models - Limited auctions Programmatic players - Specialized for TV - Some digital ad players Agencies - Focus on effectiveness & efficiency of campaigns - Customized video creative & versioning Brands - Niche & differentiated - Mass appeal brands - Reservations & ceilings - Consolidation
- 13. What will help in crossing the Chasm? Buy Side -‐ Broad reach -‐ OrganizaLonal alignment -‐ Cross plaeorm campaign management Sell Side -‐ Controls & ROI guarantees -‐ Yield management -‐ BeIer dynamic Ad inserLon -‐ MoneLze set-‐top box data Programma>c infra -‐ Neutral management & buying plaeorms -‐ Cross plaeorm & cross channel measurement Technology -‐ Infrastructure interoperability -‐ ID mapping Data -‐ Format compaLbility -‐ IntegraLon with online & offline Consumer Privacy & Favorable Regulatory environment
- 14. Connect the TV data island • OpLon-‐1: Targeted TV Ads – Offline first party data +Experian+ STB data =>Targeted TV Ads • OpLon-‐2: Targeted online & mobile Ads – Offline first party data + Datalogix/Experian+ STB data =>Targeted online + Mobile Ads
- 15. CRM data Email, zip ID etc. Third party STB ID + Segment TV audience insights from MSOs OR Ad networks Set-‐top box Subscriber data from MSOs Email, STB ID Op>on-‐1: Using offline data to serve targeted TV Ads is less aarac>ve
- 16. Op>on-‐2: Using TV + offline data for online & mobile targe>ng looks promising CRM data Email, zip, prod ID etc Subscriber data from MSOs-‐ Email, STB ID TV audience data Third party data Online OR Mobile targe>ng Third party
- 17. Companies trying to connect TV data to online Ads • Datalogix – DLX TV – Use TV watching behavior to target online customers – Announced couple years back – Exclusive partnership with TRA ( subsidiary of TiVo) • Experian
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- 19. Serving & measuring Ads with Addressable TV • Context – TV is a joint watching experience. – Limit products that apply to households – Time of the day – Type of program – LocaLon – Weather – People do not want to get interrupted while watching the program so the interacLon with the Ad might be limited • Measurement – Long-‐standing metrics such as Gross RaLng Points (GRPs) and Nielsen Network demos will be replaced with effecLve cost-‐per-‐ targeted-‐audience reach metrics
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- 21. TV s>ll has the highest reach
- 22. Addressability plans of major MSOs
- 23. Willingness to pay by Ad buyers
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- 25. DBS & Telcos pose severe compe>>ve threat to tradi>onal cable MSOs
- 26.