Inevitable Impact Of TV-Derived Business Outcomes On This Year's Upfront

John Piccone

Originally posted on MediaPost

We are entering a new era of television history, an era where data has as much value as content. In the 2015/16 upfront season, the networks will still need to deliver on the promise that content will carry the audience weight it has historically delivered. But starting this year, the networks will also need to predict, guarantee and deliver the audiences most likely to buy an advertiser’s product.

For TV media owners, the pressure is now on, with agencies turning up the heat. Media agencies are investing heavily in data to prove the impact of their choices. Their data-fueled, finance-driven, trading-desk tactics approach the TV negotiation table with the hope of upsetting todays inventory packaging strategies, yielding a better set of media metrics for their clients. Some have gone as far as offering a guarantee on the business outcome of media. Can agencies do this? Can networks do this? Yes, in theory. In practice it may take a while.

13_blog_inline_27_1420x790.jpg

The real winner of this audience data arms race will be the advertiser. As more audience-based ad schedules are offered alongside contextual offers, advertisers will be able to measure and compare individual tactics through their most important lens: the media’s impact on sales. With data giving them a better view of this factor, advertisers will be able to decide how much to spend in advance, and how much to hold back in scatter. The goal of holding back? To optimize their media mix, and reward those sellers who beat the average return on ad spend (ROAS).

This business-outcome battle will rattle the status quo of TV media buying and selling practices. The standard, safe and familiar tactics will be forced to prove they can exhibit a profitable return. As a result, important and hard-to-measure metrics such as awareness and intent to purchase might not enjoy the pole position they do today.

Closing the loop on TV advertising will require greater participation from advertiser and media analytics teams. They will be tasked with ensuring new measurement methodologies that complement todays Nielsen-derived currency while adding incremental, actionable insights.

What won’t change this upfront? Bulk- and demo-based deal-making will remain in place, in part to keep year-on-year CPM fluctuations in check. But this time next year, when the impact of that bulk buying is measured on a business outcome basis, generic CPMs will have to share the stage with new ROAS (Return on Ad Spend) metrics.

Also not likely to change at this year’s upfront will be sellers of TV media not be able to prove how their media will move their advertisers’ businesses. These sellers will be selling demo-packaged content that leave too many targeted audiences on the table. These valuable audiences will be swept into the pool of remnant despite their unique value, or sold by alternative sellers able to capitalize on that inventory at a lower price.

If buyers of TV media cannot measure the outcome of their purchased television inventory, they run the risk of misunderstanding the actions audiences took who were exposed to an advertisers message, versus those who were not.

We are at a tipping point for the impending upfront. One of two things will happen in May. Either the buyers of TV media who have invested in data will be ready to take a stand on the impact their media will have on advertiser’s business outcomes – or the data will merely water the gardens of analysis paralysis, where status quo trumps risk and reward.

Interested in getting the latest from Simulmedia?

News, insights, and events sent straight to your inbox!