Author Archive: Snigdha Goyal

Snigdha Goyal

About Snigdha Goyal

Snigdha Goyal is a Senior Product Manager for Adobe Primetime, leading new initiatives to bring cross-screen data-driven advertising to the TV industry. She has extensive experience in business strategy, monetization, and product management in tech and financial services. Snigdha earned her MBA from University of Chicago Booth School of Business and M.Tech. and B.Tech. in Computer Science and Engineering from Indian Institute of Technology Delhi. In her spare time, she loves to read, hike, and explore new restaurants and coffee shops.

Data-Driven Advertising is Key to TV’s Survival

For decades, advertising has subsidized the cost of media — whether it’s print, traditional broadcast or more recently, digital media. Even today, the seventy billion dollar TV advertising industry in the US is primarily driven by big advertisers looking to build brand awareness among the masses. However, with the rise of digital platforms and their new ad formats, the TV industry is witnessing a threat to its longstanding business model. Last year, digital advertising surpassed TV advertising for the first time in the US, despite better-than-expected TV ad spending as a result of the Summer Olympics, presidential elections, and a strong scatter market. According to eMarketer, the gap between digital and TV ad spending is expected to widen to over $10 billion this year.

Below, we’ll explore the advantages of both TV and digital advertising, where the market is headed, and why leveraging more data could be TV’s saving grace.

Data is a key driver of the growth of digital advertising. In digital, marketers can use data to plan and buy very precisely targeted media. And the targeting capabilities go way beyond the basic demographic targeting traditionally used for TV. Behavioral, contextual, and psychographic data can all be used to deliver the right message to the right audience at the right time, thereby increasing the campaign effectiveness and the value of the ad inventory. In addition, the ability to measure conversions, engagement, and return on investment provides a feedback loop for future ad planning and optimization.

Digital platforms are reaching the scale of TV and competing for viewer attention. For 60 years, TV has been the king of mass media. It reaches 300+ million people in 96% of US households. But with 273 million internet users in 2017, the reach of digital is catching up. Technology leaders have made note of digital’s growing footprint for some time now. Facebook COO Sheryl Sandberg said, “we have a Super Bowl on mobile in the U.S. every day.” Similarly, YouTube CEO Susan Wojcicki claimed, “YouTube now reaches more 18-to-49-year-olds than any network — broadcast or cable.”

However, TV has a clear advantage when it comes to premium content. In terms of time spent watching video, TV commands the lion’s share with US adults having spent an average of 4 hours and 5 minutes watching TV each day in 2016 compared to 1 hour and 8 minutes watching digital video. As a result, TV ad spending is expected to be $72.7 billion this year, nearly 6 times the digital video ad spending forecast of $12.6 billion.

This disparity is largely driven by the amount of highly-engaging TV content produced by long-standing media powerhouses. Moreover, premium content on the living room screen leads to more attentiveness and a halo effect on the impact of advertising. In a study on screen size, Hub Entertainment Research measured how people viewed the same content across different devices. It found that while viewers were equally engaged with program content regardless of the screen, 62% of TV viewers were able to recall half or more of the advertisers, versus only 47% for tablet viewers, 46% for smartphone viewers and 45% for PC viewers.

The superiority of content on TV, however, may soon be in jeopardy...

Digital platforms have turned their attention to acquiring premium content. YouTube, Netflix, and Amazon are investing heavily in original content, in addition to securing rights to premium video from traditional media companies and sports leagues. Very recently, Facebook launched Watch tab to showcase original video content and aims to premiere a slate of TV-like programming. Snap Inc. has signed deals with NBC Universal, Turner, Discovery, ESPN, Vice Media, and the NFL to produce original shows for Snap TV. And Amazon Prime has reached an agreement with the NFL to be its exclusive live streaming partner for Thursday Night Football during the 2017 NFL season.

How does TV keep pace, as digital platforms approach parity with TV in terms of reach and content?

The TV industry needs to up its game in data. As the competition for viewer attention and ad dollars heats up, media companies are increasing their investments in the core pillars of monetization — content, reach, and data. With billions of dollars in ad revenue at stake, TV providers must deliver on the increasing demand for data to deliver more value to advertisers and to protect their revenues.

Adobe is developing tools for traditional TV providers. We are committed to helping TV companies use audience data to increase the value of ad inventory and reduce media waste. In future articles, we’ll outline how TV providers can work with Adobe to accelerate ad revenue through the intelligent use of data and even the playing field with their digital-born rivals.