Why ROI Data Is The Future Of TV Advertising

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 Steve Olenski ,  Contributor

JUN 17, 2016 @ 02:17 PM

The questions “how much?” and “how soon?” have always been attached to the monetization aspect of TV advertising. When it comes to data insights on TV ad campaigns, those questions will be vital pieces in the future of multi-platform advertising.

Where’s The ROI In Big Data?

Before I can answer those questions, we should have a brief recap of what big data is, it’s benefits, and whether it’s worth the investment or not.

The most basic description of big data is “the large volume data — both structured and unstructured — that inundates a business on a day-to-day basis.” Louis Columbus, Director, Global Cloud Product Management at Ingram Cloud, says that “big data and analytics will revolutionize marketing and sales” by determining how “prices are defined, managed, propagated through selling networks and optimized is an area seeing rapid gains.”

For marketing and sales, big data has contributed to the following;

• Differentiating pricing strategies at the customer-product level.

• Revolutionizing how companies attain greater customer responsiveness and customer insights.

• Customer analytics being used to increase customer acquisition, reduce customer churn, increase revenue per customer and improve existing products.

• Improving the relationships with customers.

• Integrating technology across multiple channels.

• Targeting customers by location.

• Being a vital component of marketing campaigns.

But, do these benefits impact the return on investment?

A study conducted by Teradata and Forbes Insights reported that “two-thirds of respondents report that big data and analytics initiatives have had a significant, measurable impact on revenues.”

“How do you fundamentally associate an ROI back to an initiative? Depending on the size of these companies, if you can save single digits in your operational efficiency or you can grow revenue without introducing new products or channels” then you’re doing good, says Chris Twogood, vice president of product and services marketing for Teradata.

“I think it will continue to grow,” Twogood adds. “I don’t think we’ll hear companies say, ‘Big data analytics alone grew my company by 15 or 20%.’ I think that’s crazy for a single initiative. But as this evolves, you’ll absolutely see it grow.”

Is TV Advertising Effective At Driving ROI?

As for the television industry, Michael Zimbalist, Chief Marketing Officer at Simulmedia, says that “ with each passing day, TV advertising becomes more and more like digital . The reason is data.” Zimbalist continues, “By matching massive, representative panels of high-quality datasets, it’s possible to measure the behaviors of people exposed to TV advertising and use these measures to optimize future campaigns.”

But is worth the investment for TV advertisers to invest in big data?

Zimbalist shares a study released by Gayle Fuguitt, CEO and president of the Advertising Research Foundation, which found that out of 3,200 ad campaigns, TV advertising was “the most effective vehicle for driving ROI, and adding digital to a TV campaign yields a 60% kicker effect.”

Rich Lehrfeld, senior VP-global brand marketing and communications for American Express believes TV as a traditional medium is still important. ” When we run a heavy TV schedule, we see a lift in sales and product awareness . We need to run two weeks of digital to get the reach of one day of broadcast.”

Lehrfeld adds, that is a fear that TV will become “so fragmented and ratings will drop so much that it will be hard to generate reach and frequency.”

That fear shouldn’t become a reality as long as TV advertising uses data like its digital counterparts. Easier said than done.

There’s no denying that data insights will be used to influence ad campaigns in the near future. Here’s a look at where the future of TV advertising will be going.

Setting Ad Guarantees Besides The Nielsen Age And Gender Demographics

For over 60 years advertisers relied on age and gender demographics from Nielsen, but thanks to data, that trend could be modified.

“All of the networks are starting to offer these overlays (of data sources) as well as starting to sell a certain amount of inventory against those targets,” says Jane Clarke, CEO and managing director of the TV and advertising industry-backed Coalition for Innovative Media Measurement. “Now you’re seeing (marketers) buy based on Nielsen age and gender ratings and then get secondary guarantees. By 2017 you’ll really start to see a shift. I think it’s going to take a year for the industry to get used to all this new data.”

Viacom, for example, wrote around 33 deals that are non-Nielsen guaranteed during the upfronts in 2016. Jeff Lucas, head of ad sales at Viacom, said that was up approximately 11 from 2015. And, that number should grow to about 66 in 2017. Industry experts, however, don’t believe that guarantees set on data other than Nielsen age and sex demographics will be completely replaced, despite those numbers growing. Overall, they’ll still remain small in the overall scheme.

Fewer, More Relevant Ads

“Everyone’s migrating toward stuff you can measure. And the winners will be companies who can take the data and do something with it,” says GM, IBM Cloud Video Unit GM and Clearleap cofounder Braxton Jarratt, who believes that over the next couple of years we’re going to see fewer but more relevant ads.

David Kline, President of Media Sales at Charter Communications, adds that, “They’ll look very similar but much smarter and more effective for the advertiser.”

This practice, if you will, of delivering relevant content is a cornerstone of content marketing already.

We’re already starting to see that as cable channels are reducing the number of ads during their programs. Turner, for example, is aiming to keep about 10 minutes of ads per hour during certain shows on stations like TNT and TruTV. Since it first aired, Fox’s “Empire” has had limited commercial interruptions.

The goal is to “enhance the brand effect, create better brand recall, engagement and affinity,” says Turner ad sales chief Donna Speciale.

And, expect to see more native advertising – which is branded content in the style of the show. Remember Sharknado 3: Oh Hell No?

Sure, It’s a cheesy, Syfy film. But, the native advertising was impressive. From NASCAR drivers fighting off sharks during the commercial break or the film conveniently ending at Universal Studios, which is owned by Syfy’s parent company NBCUniversal.

Predict What Viewers Will Watch And Purchase

One of the most fascinating uses of big data is predicting what customers what or using predictive models to create ad campaigns. For example, hotels could use weather forecasts to set hotel rates or offer promotions to travelers. If a snowstorm was approaching, they could send a coupon to customers stuck at airport.

Mitch Barns, CEO at Nielsen believes that “what we call ‘enterprise marketing platforms’ will take in data on the viewing and purchase behavior of millions. They will feed it into software that combines elements of marketing models, attribution models, and other analytical tools. And the result will be predictions that relate watching to buying more precisely than ever before.”

Barns adds, “These models will then inform systems that systematically and ‘programmatically’ bid for and buy advertising, and monitor the buying activity that results. These results will be fed back into the predictive models in real-time. The models get better with each cycle. The waste goes out. The ROI goes up. And the money comes in.”

Matthew Kinsman, founder and CEO of Base Creative, reminds advertisers that “three months is the data half-life for many industries” adding that “data mining and other analytical tools can keep your knowledge of your consumers up to date, facilitating rapid response when their needs and wishes change.”

Doing so will ensure that you’re always one-step ahead of the customers.

Prove Return On Investment

“Technology innovation will make it possible to trim a great deal of waste out of advertising by making it more precise,” says Barns. “As advertising becomes more precise, it will become more efficient, which will drive up its ROIThis higher ROI will then lead to more investment in advertising. Yes, spending more, which many are reluctant to do, will become the attractive option, the smart business move.”



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