Fix the following errors:
Copyright © 2016 Econsultancy.com Limited. All rights reserved.
An Exclusive Interview with David Cohen
Download your copy
*By submitting this form, you are granting: Econsultancy, a subsidiary of Centaur Media USA, Inc., 350 7th Avenue, Suite 307, New York, New York, 10001 United States, permission to email you. You can revoke permission to mail to your email address at any time using the Unsubscribe link found at the bottom of every email. Emails are serviced by dotMailer.
Our Road to ad:tech New York
Exclusive Content from Econsultancy: Issue 6
Econsultancy is delighted to have partnered with ad:tech New York 2016. Download our latest report Customer Recognition, and scroll down for more exclusive content.
Download your free copy to discover:
The ongoing discrepancy between media allocation and customer behavior
The Customer Recognition webinar explores where marketing is today in its pursuit of personalized promotion and finds a stark gap between perception and reality.
Why the single customer view eludes marketers
Belief vs. reality in digital capabilities
Why it’s vital to reduce data-friction with customers
David Cohen has been in the IPG family for 17 years and in January 2016 took on the role of President, North America, of Magna Global. Ahead of his appearance on stage at Ad:Tech, he talks to Econsultancy about addressable TV, cross-screen measurement and the challenge of balancing demand for ROI with the need to innovate and experiment with new media.
Why has 2016 been an evolutionary year in media?
It’s the first year in the US where digital spend will eclipse that of TV. It’s a momentous event and one that makes us sit up and think about how we are architecting solutions for clients. Second, we’re just about to turn a corner in terms of getting a handle on cross-screen measurement. It’s been a vexing problem for the industry for years and years and years, but we’re getting much better at using the cross-device graph, device IDs and cookies. While Nielsen is about to release a cross-screen measurement solution on the agency side.
Finally, programmatic – which has been locked into these walled gardens for quite some time – is being democratized.
How do you distinguish between TV and digital in this cross-platform world?
For the moment we have defined anything that’s delivered by IP-based technology – OTT, Apple TV, Roku – as digital. Anything that’s delivered by coaxial cable or satellite is in the TV bucket.
If you look at the total amount of digital video being consumed the vast majority of it is not with the big network TV players. About a third is YouTube. About 12-15% is Facebook. In aggregate if you add up all the big TV providers their digital viewing is less than 10%. So YouTube is the 800lb gorilla.
We look at big tent pole events such as the Olympics, the Academy Awards, the VMAs and we look at the aggregation of audience. Linear TV is seeing tremendous declines but when you add in digital consumption it’s class to flat. It’s not a growing entity but the number of screens and channels are just fractionalizing.
Earlier in the year you moved $250m in ad spending from TV to YouTube. Why did you do that?
Linear TV audiences are declining and we were predicting inflation that was really uncomfortable for us and our clients.
How promising is addressable TV advertising, in your opinion?
Addressable today is still a relatively small piece of the overall equation. It’s mostly being done through DirecTV, Dish, Cablevision and a couple of other small players. In the grand scheme of things it’s small but we are very, very encouraged by its ability to deliver client results on a cost per rating point basis.
What’s holding it back?
The single biggest challenge is the creative challenge. The ability to customize messages to what we know about an individual household costs money and is hard to scale. You can’t get a machine to replicate the emotion of a creative spot, so you have to think about add-in components to assemble dynamic creative. It happens in the digital space the whole time.
What do you see as the media industry’s biggest headache?
Staying on top of all the new platforms. There’s never a time when it’s a static marketplace. Snapchat is coming out with a 10-second vertical ad, YouTube has a 6-second bumper, then there’s virtual reality, augmented reality, mixed reality. So, fragmentation is the challenge; being an expert in all things is difficult.
How do you balance innovation versus standardization?
We are in a scale business. We can’t run our business if everything is one-offs. So we have to think about how we raise the bar and drive innovation across multiple clients, multiple partners. You don’t run Snapchat’s 10-second format anywhere else. It is challenging, but the industry is ripe for galvanizing around a standard that’s different.
What are some of the most promising new media trends?
Mobility and location-based services. What do we gain when we add location as another dimension in marketing? By understanding exactly where you are, whether you are at a movie theater, the aisle of a supermarket, a car dealership or Best Buy. Where you have visited in the physical world gives us insights that can help give measurable results.
Social video in the short term has blown away all of our expectations. Video consumed on Facebook, Twitter and Snapchat will have significant implications for where we put our dollars in the short term. And addressable TV over the next five years will start to materialize.
How do you experiment when clients are increasingly demanding better results with less money?
I remember 10 years ago we had a test and learn budget, that could have been 5-10% of the total just to explore. It was OK to fail and just learn. I don’t think that happens nearly enough any more. The pressure around business performance has never been greater. There needs to be some risk tolerance in order to drive innovation otherwise it isn’t innovation – it’s standard practice.
What do you consider to be a fad rather than a trend?
VR in general. We seem We seem to be talking about it like it’s the next coming of the Messiah. While as a technology guy I love it for my personal consumption, I can’t imagine a household situation with everybody sitting on the couch with a visor on in our own little worlds. In particular applications like gaming it makes sense, but at scale I’m not sure.
Get in touch today to find out more
Customer Recognition
Packed with invaluable insights.
Inspiring examples of success.
Core skills for everyone.
Live and interactive insight.
Share insights with your peers.
To save you time and money.
Insight delivered straight to your inbox.
To keep you on top.
Over 30,000 stats and growing.
How Econsultancy can help you
Econsultancy distils and demystifies digital marketing information, turning it into useful, independent insight with practical applications. Our customers come to us to build their knowledge and teams’ capabilities, validate their decisions, stay up to date and benchmark their activity. They know they can trust us to provide independent advice. Without mincing our words.
Unlock the tools, inspiration and insight to excel in digital and gain access to unrivalled research, market data, best practice guides, case studies and elearning through to digital transformation services including capability programs, training courses, skills assessments and audits.
by Olivia Solon
Uptake is pretty modest
According to eMarketer, addressable TV spend in 2015 was $400 million in the US. In 2016 that will reach $890 million, topping $2bn by the end of 2018.
Sounds healthy enough, but for 2016 that's only 1.3% of total TV ad spend in the US.
Some of the main providers offering addressable TV ads include Cablevision, Comcast, DirecTV and Dish.
Creative versioning has not yet taken off
Though providers such as Cablevision do offer the technology, advertisers are not yet versioning creative for addressable TV like they do with programmatic display ads.
This isn't entirely suprising, given the nascency of the technology but it will prove an interesting talking point in the next few years.
Will TV ads benefit from one-to-one dynamic content? Can retargeting (of a sort) be done creatively on the family set?
One might suggest such impressive but rather functional targeting has been partly responsible for a malaise in online advertising.
Lack of standardization makes for more work
Different operators use different technologies and so it can be time consuming to run and report on ads across a number of them.
Controlling ad frequency becomes possible
Addressable TV means that advertisers can measure and optimise the number of impressions a given person or household is exposed to.
In theory this will allow advertisers to experiment and better understand optimum exposure. Ads can be changed or stopped when the audience hits a particular threshold.
Of course, as online advertising shows, this isn't always the case in practice. TVs are rarely personal devices and we all make a cup of tea now and again.
However, what's clear is that where some are advertisers are still concerned about ad fraud and viewability online, TV (both linear and on-demand) maintains a reputation for quality and transparency that advertisers love.
The question is one of scaling addressable TV and making it work for all.
Advertisers pay for audiences not content
The advertiser defines the audience it wants to target and pays for impressions regardless of what content that audience is watching at the time.
Addressable TV chiefly refers to ads targeted at specific household audiences watching linear television. Currently, the number of addressable households number around 50m in the US (essentially those that have a set-top box and for whom census-level data is available).
Census data allows for targeting based on income, ethnicity, children and even car leases.
Of course, there is are addressable media available in TV and video. Video-on-demand (VoD), smart TVs and over-the-top (OTT) services allowing for programmatic ad buying and can offer more specific targeting (particularly on personal devices).
Addressable ads make TV accessible for more niche advertisers
Being able to buy fewer but much more targeted impressions helps more niche advertisers.
Though addressable TV is more expensive per 'impression', there is inherently less wastage.
A common example cited is the example of an advertiser targeting home renters - something that would be too wasteful if done with traditional broadcast advertising.
Six things to know about addressable TV advertising
As David Cohen, President, North America, of Magna Global points out in a recent interview with Econsultancy, digital ad spend will surpass TV spend in 2016.
But, of course, TV itself is not standing still. Innovations in TV advertising continue, with addressable TV ads of particular note.
Quite how advertisers will take full advantage of the addressable ad opportunity is still up for debate - creative execution of addressable media has arguably been lacking across the advertising industry and is one of the main challenges for advertising as a whole right now.
In this post, I thought I would give a short introduction to addressable TV. How does it work? Who is doing it? What do brands need to know?