Not so long ago, in a television universe not so far away, Nielsen families gathered in front of the TV and scribbled notes in their diaries documenting their viewing habits. Nielsen’s sampling methodology and number crunching would tell advertisers the age and gender (more or less) of people watching almost every program on the dial. Advertisers bought media against their brand goals based on this information. For example, because the majority of NFL viewers on Nielsen’s panel are men aged 18-49, Sunday afternoon football is awash in ads for beer, cars and brokerage firms.
But advertisers never really knew who exactly was watching. They could guess what the audience might want to buy, but they weren’t certain. Are all men in this age group interested in drinking beer? What about women who watch football and don’t like beer?
Today, Nielsen families continue to keep diaries, but there are more ways to consume media than just linear TV. Digital platforms have leveraged audience data to transform how viewers engage with content and how advertising is transacted. Media sellers in the TV space are now trying to apply a lesson from digital by embracing audience-based ad sales.
“Advertisers are constantly looking to reach the right audiences and something that’s more complex than just age and gender,” says Hosana Thomas, an Adobe Product Marketing Manager. “The goal with audience-based advertising is to help advertisers understand where their audiences are spending their time and what motivates them to make a purchase or choose a specific product — and the way you do that is by using data.”
Why audience-based advertising?
The ability to access your favorite shows anytime, on virtually any connected device, is great for viewers and an opportunity for advertisers. More content channels have made achieving a unified view of the consumer difficult, but at the same time, technology has made it possible for advertisers to target specific audiences with niche interests. Audience-based advertising allows brands to segment and target their audiences beyond age and gender, while providing more granular measurement than traditional buying. It leads naturally to more effective ad buys with less waste by reaching consumers in whatever corner of digital media they might visit.
The most talked-about converts to audience-based advertising are some of the biggest names in media: Fox, Turner, Viacom and NBCU. In March, Fox, Turner and Viacom formed a consortium to offer audience-based advertising across their TV ad inventory. That same month, NBCU announced it had set aside $1 billion in ad inventory to sell based on data other than traditional Nielsen demographic guarantees.
This new model is a bid to drive parity with digital advertising’s data-driven targeting capabilities. Audience-based advertising allows media sellers to understand how and where their audiences are spending their time and what motivates them to purchase. Because it permits analysis of variables beyond age and gender, media sellers can use the data to learn more about their audiences than ever before and share this information with their advertiser and agency partners. This form of data-driven advertising helps media buyers reach audiences more efficiently, enables media sellers to command higher prices for ad inventory, and improves the viewer experience by delivering more relevant content.
Ad executives say they welcome the ability to buy advertising based on audience data — in addition to traditional Nielsen guarantees— especially with increased consumer demand for more personalized experiences.
“About 78 percent of consumers want to receive relevant, personalized ads, but only 20 percent felt they were actually getting them. That’s what’s driving the shift to audience-based advertising,” says Pete Kluge, Group Manager of Product Marketing for Adobe Advertising Cloud.
“The desire for better measurement also is a factor,” says Jeff Chi, a digital marketing expert and COO of Krush Media.
“It’s important to give advertisers the ability to have different options of targeting that are more precise and backed by measurements that can show what worked for campaign performance and what doesn’t work, so they can optimize both their existing and future buys and help these campaigns perform even better,” Jeff says.
The challenges of audience-based advertising.
Until recently, TV consumed the lion’s share of advertisers’ budgets. However, digital ad spending surpassed TV for the first time in 2016, according to eMarketer, and that trend is expected to continue as digital ad spending grows from an estimated $83 billion this year to more than $129 billion by 2021.
The growth in digital suggests that a more integrated, multi-channel approach is the way of the future for TV companies and ad buyers. Jeff says this may spur more collaborations between TV and digital media companies to give advertisers the audience, measurement, and tracking they crave.
“Audience-based advertising is such a hot topic right now, and you have a lot of big companies finding a solution for this,” he says. “I think what we’re going to see is more linear companies and digital media companies merging in the near future to combine their offerings — whether that’s their data, technology or reputation — to solve an industry challenge, which is the lack of integrated data.”
Data integration is one hurdle, but media sellers also need to address data accuracy and how audiences are defined for audience-based advertising to be successful.
“It’s a matter of coming up with a consistent audience definition across media sellers, since there are still challenges around match rates, how advertisers are buying those audiences, and how they match up with the sellers’ audiences,” Pete says.
While Fox, Turner and others are experimenting, media sellers will need to find the right technology solution to collect, filter and analyze all their disparate data sets. That solution will need to collect and combine information from various offline and online channels — and especially traditional TV and digital formats. This will allow media companies to define and identify the audiences for an advertiser’s campaigns across all channels, and ultimately improve viewer retention and advertising revenue long term.
Kyle Morehouse, Senior Solutions Consultant at Adobe, says the ultimate goal of audience-based advertising is to bring the targeting and personalization power of digital advertising to television.
“Whether consumers are looking at a screen, at a laptop or they’re watching a television show, we want to make sure that people can still find the right eyeballs regardless of what screens they are looking at,” he says.
“The payoff there is that we want people to build an audience in one place,” he adds. “Historically, in the digital world the assumption is that you’re combining all the data and building an audience to activate in paid media to buy banner ads, to buy video and to buy mobile display ads. What we’re saying now is that same effort of building an audience should be leveraged in every channel, including television. This is the central place to build a single concept of an audience that can be activated anywhere.”
To find out more about Adobe’s solutions for Media & Entertainment, visit http://www.adobe.com/industries/media-entertainment.html.