TVSquareds Daniel Gulick looks at IP tracking, optimisation and price points
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Dec 20, 2017Social count:
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TVSquareds Daniel Gulick looks at IP tracking, optimisation and price points
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Increasing use of set-top boxes and smart TVs as well as alternatives, such as Amazon's Fire TV Stick and Google's Chromecast mean TV viewers can watch an entire series on Netflix, check out a newly released film via Amazon Prime or enjoy user-generated content on YouTube, just as easily as watching traditional TV.
The rise of second-screens has led to consumer attention being split across various devices. But now, TV is facing further fragmentation within the set itself. Even live sports the last bastion of TV is starting to shift online, with Amazon Prime inking an NFL streaming deal, and Twitter reaching a similar arrangement with the WNBA.
Shelly Palmer recently predicted the impending death of the TV industry at the hands of Facebook, Amazon, Netflix and Google/YouTube (aptly naming the famous four, FANG), due to the richness of the data these platforms have vs. TV.
So, is it true? Will digital channels take over from TV as part of a seamless, data-driven, highly trackable online advertising experience?
The answer is no, and here are some reasons why:
IP address tracking is problematic
The ideal situation for advertisers is to link a consumer's digital activity to a common identifier using IP-address data. This could include activities such as set-top box viewing, web browsing on a home computer or smartphone searches conducted via home WiFi.
The problem lies with cable companies who anonymise their data, so there is no IP address information available, only profiles. Meaning marketers can recognise the wider audience, but are unable to gain an understanding of what users are viewing at an IP level.
Walled gardens have their limitations
Walled gardens are increasingly using their rich data sources to compete with broadcasters for advertising revenue. For example, Amazon can specifically target individual users of its Fire Stick with data from wider Amazon profiles. Facebook is also joining the party with an app that enables users to watch the platform's videos directly on their TV sets, allowing targeted advertising using detailed information from users' social footprints.
However, as walled gardens are closed networks, with limited external measurement, advertisers find it difficult to truly understand the impact of their campaigns. Without that information, it's almost impossible to create seamless, cross-channel experiences.
TV is now highly measureable and optimisable
The prognosis for TV's extinction is based on the assumption that the broadcast TV industry is data-poor. In reality, today's TV is a performance-driven channel, just like digital. Real-time attribution is now fully achievable by measuring real-world, TV-driven response in the form of things like spikes in web traffic, search, app activity, SMS, etc. Advertisers can then use those insights to optimise campaigns against business outcomes for the best ROI.
In determining where to spend their budgets, the advertising industry needs to be focussed on response data, rather than delivery. Advertisers are now able to use response data for audience profiling no matter when or where their commercial ran on air. Consideration needs to be given to whether linear TV or emerging channels perform better against a brand's specific critical metrics. For extensive reach and frequency, linear TV still leads the way, with relative efficiency.
Price is always a key factor. Advertisers want to reach their target audience, but this needs to be at the right price to ensure a desirable trade-off. As audience targeting tightens, the price of inventory is raised, the scale reduced, and the real cost of responses can become prohibitively high. While this may work well in a niche market, many brands prefer a wider reach.
A recent IAB survey demonstrated the significant word-of-mouth marketing opportunity for brands, with more than 90 per cent of the US population aged 13-to-64 watching TV in groups of two or more (co-viewing), and linear TV capturing the highest co-viewing audience reach, closely followed by OTT. The study found more than half (56 per cent) of these audiences discuss the brands they see on screen with others in their company, with ad-supported programming more popular than subscription-only formats. Brands must consider the most effective solution, balancing reach and price, to generate the best response rates.
Audience fragmentation is likely to be an ongoing phenomenon as new viewing experiences develop. But the emergence of new channels for content distribution and consumption is far from a negative trend there is plenty of premium content to go around. And when a wider reach is needed, the fact remains that linear TV is still a very effective way to engage large audiences and contrary to traditional viewpoints it can now be measured, targeted, and optimised.
As TV and online environments inevitably collide, providing widening opportunities to gather valuable data for insights across all channels, advertisers must focus on customer response; running campaigns at the scale and price point that works for them.
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TVSquareds Daniel Gulick looks at IP tracking, optimisation and price points
