Redefining a market

Do consumers really see all video, online and offline, as one as we say in the industry? I suspect not. On the contrary, I think they draw a clear distinction - For e.g., " I don't watch TV anymore, I have Netflix!" and so on...

However,the convergence from the business point of view is very clear. In a nutshell, TV is moving towards the data-driven targeting and automation aspects of digital and digital video is trying to be, well, TV-like on several things from content type to positioning in the advertisers' / ad buyers' mind.

Trying to be 'TV-Like' seems to be the more dominant pattern of the two right now.

Consider some of the recent news from the US : Google's OTT play on Cable & Satellite TV with You Tube TV (and thereby on to the Addressable TV space through distributor ad slots) and re-entry into Programmatic TV for linear inventory via DBM; Plans from Facebook, Twitter,Snap, Amazon et al to get into TV-type shows and the focus on premium content in general ; the related conversation about the living room TV set as a screen for digital video; the very existence of something like the NewFronts that, unlike the TV Upfronts ,is a marketing rather than a transactional exercise. Etc.

Why should this be when the market is clearly going in favour of digital ? For example, digital ad spend is expected to equal and, according to some sources, even exceed TV this year in the US.

And therein lies the flaw (in this video-value context ) in comparing those two.

Unlike TV, 'digital' isn't one entity. Specifically, Search is a separate format for a separate objective and a different market that exists pretty much independently.It has very little significant influence on most (read non-Google) of the digital market. Stripping it out reflects the real battleground on which all of those players find themselves, i.e. the market is smaller and TV's share larger. (Ref. chart below)

Arguably there are only two ad markets : branding and search/performance. TV dominates the first , Google the second. Media and channels may and do have elements of both - e.g. Social - but the fundamental drivers remain those two. This is a redefining of the market that the players themselves , either consciously or otherwise, have already worked out but something that the rest of us tend to miss out on from the headlines.

Now add to the above the TV subscription market and you have a big value bucket to draw from (as the likes of You Tube TV, Sling, Hulu, Netflix and the like are already) - but that is a separate story on which more later.

Thanks for reading. Cheers

Removing the Measurement Cap !

Measurement hasn't perhaps got the attention across the wider marketing ecosystem that it deserves. While the challenges of digital measurement - Person vs Cookie, Third Party vs Walled Garden, Cross-device/platform measurement and attribution, etc.- are out there in the conversation , it tends to be mostly among specialists.

The cost from the lack of measurability should be assessed more rigorously and appreciated for what it is - a cost. And this is where a ground-level micro perspective may play a part.

For example, in the simple - though not simplistic! - case of skippable online video (OLV) advertising when average viewing frequency per cookie is known , the duplication rate makes a significant difference to the actual 'person'-reach and therefore frequency and cost.

Imagine a hypothetical OLV campaign of 500,000 paid views with a specific creative copy with an average VTR of 20% targeted at a demographic base of 1 million individuals with an average cookie view frequency of 1.5. As the chart at the bottom shows, depending on what the duplication is in reality, reach can be anything from 33% all the way to 5% and below. Cost per reach obviously increases accordingly.

But it goes beyond just  cost per reach.

Assume that the actual 'person'-reach is close to unique cookie viewers, i.e. an actual 'person'-frequency of around 1.5-2.0 ish (meaning the user wouldn't watch the same spot more than a couple of times or three - a reasonable enough assumption on anecdotal evidence in the absence of anything else ), what happens when another 500K views are bought , say, in the following month ?

Now, at 20% VTR, around 2.5 million impressions would have been already served first time around to generate those 500K views. These impressions would have covered most if not all of the addressable 1.0 M TA base already. So in terms of incremental audience in Month 2 , what are the chances that users opting to skip or drop out the previous month would choose to view the same spot now ? Or that those who viewed it last month would view it again this month ? Neither case is impossible or even improbable but ,well,it doesn't sound very probable either ! The math just does not stack up. Now this becomes not only a question of X% additional cost per reach but also the very tenability of the campaign, i.e. the possibility of a 100% additional cost

This example is obviously illustrative - and,yes, extreme ! In reality, a buyer would take audience size and related info into account before deciding on the buying volume. Equally important, copy would be refreshed regularly. And this is only a case of purely demographic-targeted buys which in reality is a relatively small number of buys.

(Measuring outcomes differently - say, through engagements, etc - doesn't affect this argument. Firstly, they are not mutually exclusive - one doesn't preclude the other. Second, this goes for those measures too, e.g., substitute 'click' for 'view' and the same Person vs Cookie discrepancy holds. Third, 'engagements',for example, tend to be low and stable in this format and , moreover, still a function of scale)

The point here though was to illustrate costs that may fall in the cracks of micro campaign management away from headlights and headlines.Should they - and numerous other more complex cases across channels and formats - be thought about, quantified and aggregated, it could provide the urgency and push which would expedite the move towards better measureability sooner.

Almost the entire illustration here is conjecture built on assumptions. Only the facts and figures could really tell. And for that to happen requires an understanding from the ground-up and cooperation among both marketers / buyers and platforms / sellers. Most questions are not easily answerable and require advanced measurement , including (especially ?) Third Party but some 'clues' could also be provided by platforms - for example, viewing distribution even if at cookie level. The buyer needs to think about that and ask , the seller needs to appreciate the market growing potential of such moves and provide ! The onus is on both because the benefits go to both.

As a post script : talking about frequency and such leads me to a sign off on Frequency Capping. It's a no brainer that Frequency Capping is a huge boon in today's digital era.

But how meaningful is it in the context of served impressions for skippable videoads with completed (or at least paid) views as KPI ? In the above hypothetical example of 20% VTR and an average View frequency of 1.5-2.0, how meaningful is a Frequency Cap of , say, 5 (or 4 or 6 or 10) here ?

When it is highly unlikely that a person will watch your ad three or four times , the cap becomes redundant at best. And at worst, you are limiting the chances of future exposures by not serving it again.

Also,as an aside, when a viewer has actively opted to watch an ad multiple times, is that still a waste ? One to ponder

Two Elephants in the Ad Measurement Room

The first elephant is the difference between digital consumption and digital advertisingconsumption. All the usual issues of viewability, bot fraud and, well, plain unnoticeabilty - and I'm looking squarely at you here, little banner ads ! - is why the percentage of ad exposures will remain relatively stable even as online consumption grows exponentially.(Though,obviously, the absolutes of ad exposures will grow with it)

The good thing with online video advertising where the difference is clearly quantified as the difference between ad impressions and ad views is that the elephant is easily sighted, understood and can be responded to.

The second elephant in the room is the less obvious one : TV ad avoidance.

There is simply no way of knowing whether people really watched your ads on TV. All that commercial ad break ratings tell us for certain - and this is keeping aside markets such as ours in MENA where these are not even available in the first place ! - is that people didn't switch off the TV and didn't zap channels.

Whether they walked out of the room or switched their mind off or buried their noses in their phones or , indeed, watched the TV commercials with love and adoration during those three or five or ten long minutes we do not know. And have no way of knowing.

So in effect we are penalizing online video for being transparent while not holding up TV to the same level of scrutiny and accountability. So TV ad exposures* all over the world are likely to be overstated simply because of a quantification gap (see figure)

* This post is only from the limited point of view of ad exposure. Engagement, impact, sales outcome et al are a different- though surely correlated !- matter.

While realistically speaking this gap can't be eliminated, can it be reduced ? Perhaps through syndicated sample survey-based research or,say, through more pervasive individual advertiser-level A/B experiments ? Hard to tell - but as viewer consumption boundaries blur and the market battles intensify, more attention will probably need to be paid to this TV elephant to size it up to some reasonable approximation.

(click to enlarge picture)

Questions : the next best thing to answers !

I just wrapped up a small project analyzing social media data on Ramadan TV programming in the region. (Ramadan , if you didn'tknow , is the holy Islamic month marked by a complete change in daily lifestyle and habits in Islamic societies. It's also the main / only seasonality in ME TV). Some of the findings were different from the public information available online. Now, the scale of the study was too small to base definite conclusions on one way or another. If anything , I'd discount it over the others.  But the moot point is that it threw up a couple of different perspectives or hypotheses to explore. 

And sometimes I think that's what's missing in our daily worklives amidst this deluge of information. It's often a lot of buzzwords and 'Have article, Will share' that completely substitues , instead of complement , primary research and the weighing of evidence. Metrics evolve but the fundamentals that those metrics are meant to measure remain valid irrespective of which era we operate in. The data era is about improving that , not erasing it. A data strategy is not the same as forwarding articles on data strategies ! :)

In  my area of TV and Video , these are some key 'elephant in the room' questions for our region that turn out to be more challenging than they appear 

1. Is there in fact a drop in linear / live TV consumption ?

2. If so , how much is it ?

3. Where is it going to specifically within on-demand  ?

(a) Catch up service on existing TV connections ? 

(b) Online streaming : You Tube ? Others ? 

(c) Online download : Torrent ? Others ?

4. Which of those are addresseable for advertising and marcom ?

5. What forms of communication are appropriate , efficient and effective ? 

   

What is a challenging ask anywhere in the world is compounded in our region by the absence of even basic data. So even something like 3(a) is not knowable without reliable estimates of Pay TV and IPTV penetration. Hopefully things will improve in the near future.

It's also up to each one of us to make a start by asking  !  

Too much of a 'good' thing ? DON'T skip ad !

Facebook introducing autoplay video is an interesting development (read here)

This has game changing potential for the industry. As COO Sheryl Sandberg says , in terms of audience sizethis could be like a Super Bowl every day !  It needs to be done right of course , both from user experience and advertising POV.

Personally I feel we may have taken permission marketing just a little too far , especially with video ad Opt Out's. The free internet began unwittingly during Web 1.0. It has since  gone on to become a one way street.

Efforts at monetization by charging for access have panned out unsurprisingly : 'quality' content  with high perceived value and scarcity, stuff like Business and Sports  , can be put behind a pay wall but in a limited way mostly. Where inroads have been made , hybrid, limited- free-access is the dominant mode.

As irreversible as the free internet process is ,  there's scope to extract  higher advertising value from all those eyeballs by easing off the self-imposed sanctions just a little bit. Would audiences really mind watching a 30 second advert before a You Tube video ? Or having a display ad take up half their Facebook screen for a minute? We know the probable answer. But a couple of things have to be in place.

First, 'perceived value' is the operative word.  Users need to be informed and reminded of the value provided to them for free. It's become a blind spot that's taken for granted. And they need to be told of the costs involved. And, yes, also reassured that it'll lead to an even better usage experience.

Which takes me to the second point. The wider industry has to get it right on their part too. Sites  should continue to improve the user experience in terms of features , minimize intrusiveness , maximize product relevance, optimize for access device etc all of which is simple from a technical point of view. Advertisers and agencies should maximize  ad 'quality' the best they can. 

Once the benefits are seen by all concerned - user, site and advertiser / agency - we'll find it to be a  much smoother  roll out than we may presume now. I suspect all this will start to happen soon enough.