The power of TV and video in the streaming era is growing — but there’s work ahead to build the ecosystem of the future, according to a new report from Comcast Technology Solutions.
“There are too many silos across different pools of inventory, the market is becoming more fragmented and is often challenging to interact with, and there are significant inefficiencies across many parts of the market,” the company’s Technology Solutions division says in the report, “What’s Next for TV Advertising – Four Changes That Will Drive the Industry Forward.”
“TV isn’t going anywhere — it’s going everywhere,” reads a headline in the report.
But to get there, the report says more investment is needed to “build the marketplace of the future.” It highlights four key changes: addressable advertising, workflow processes and automation, leveraging the benefits of scale, and ownership of data.
Addressability Becomes Reality
Addressable advertising, or the ability to show different ads to different households while they are watching the same program, is growing but it’s still a small part of TV advertising overall, so the industry needs to do more to simplify and standardize addressable TV advertising in major markets.
“One obstacle to widespread adoption is that many buyers argue that planning, buying, and measuring addressable campaigns at scale remain challenging,” the report says.
On the bright side, there have been new collaborative efforts to simplify buying across different pools of addressable inventory, the report says. Looking ahead, the industry will need rules on managing the functionality of addressable advertising; common systems to support ad replacement across live, streaming, and on-demand content; and new protocols for controls across platforms and services.
“I firmly believe this is the direction of travel [during the 2020s] — targeted ads, delivery to any video screen, using custom audience segments defined by the advertiser, with seamless, consistent measurement and full attribution,” a US media executive says in the report.
Workflows, Processes and Automation
All that content out there makes for a challenge. Today’s market is diverse and fragmented. Certain audiences are hard to reach, and delivering targeted ad campaigns on today’s platforms is complex.
“We negotiate distribution agreements with affiliates and TV platforms like Roku to deliver streaming services to audiences — and lots of these distribution deals include inventory agreements, with the platform taking some of our inventory to sell against,” a senior broadcasting executive said in the report. “The arrangements vary quite widely, so you have to have a system that’s flexible enough to manage and deliver ad campaigns across lots of different platforms, with different business rules and commercial arrangements.”
Comcast says investment is needed in automation capabilities, to increase efficiency and handle growing volume; developing global platform capabilities, to allow consistent offerings; and employing data specialists with expertise in identity resolution, CRM, data science, and more.
Leveraging the Benefits of Scale
TV advertising has traditionally been the domain of large brands with big budgets. Digital platforms, on the other hand, have millions of advertisers, big and small, using sophisticated self-service platforms for buyers to plan, manage, and measure campaigns.
But the industry is now investing in similar tools, with some major TV ad platforms launching self-service platforms for smaller businesses to buy low-cost, targeted campaigns, for example.
“The TV industry can’t stand still,” one broadcasting executive says in the report. “Advertisers have adopted these kinds of tools for digital and want to use similar approaches in the TV market. It’s a defensive play — but also an offensive one, that can help grow the market.”
Data, Data, Data
More and more, advertisers want to apply their own data to ad buying and move to programmatic, data-based trading mechanisms, and from broad demographics to more specifically defined audience segments.
Programmatic offerings have to date focused on premium VOD and streaming content rather than in linear spot ads. The opportunity for the industry, one executive says in the report, is to accelerate the application of data across platforms and interconnecting insights across data owners.
Credible, transparent, and accountable viewer data is critical to the success of programmatic initiatives.
“We have to build out better measurement solutions that cover all TV, including streaming services. And data-enabling TV is critical,” one ad executive says in the report. “Our clients are looking for us to demonstrate value from media buys, and that means attribution and outcomes measurement. TV can deliver on this requirement, but it needs work and investment — and there’s a long way to go.”
Can the industry tackle these opportunities? The report says yes, overall.
“The challenge here isn’t technology,” a European executive says in the report. “It’s about a willingness to collaborate, to break down silos, and develop the common frameworks and approaches we need.”
The report is available for download on the Reuters Institute website.