The Top Signs Point To North America Finally Embracing Audience-Based Buying
For decades, the spot has ruled supreme in U.S. TV advertising. The audience is unpredictable, the costs high and real measurability elusive, but it’s simply been what TV has traded on. Until as recently as just a couple years ago, it seemed that despite the flaws, the spot wasn’t going anywhere, in North America at least. But we're starting to see signs that the move to audience-based buying happening in key global markets is finally poised to gain ground in the U.S. too.
According to Ad Age’s annual pricing survey of media agencies, the cost of a commercial in some of the biggest shows on TV is driving lower. According to the survey, of the 66 returning series on the big four broadcast networks and The CW, 41 saw the cost for a 30-second ad decrease in the 2018-19 season. Meanwhile, Nielsen noted at a breakfast meeting this month that it expects addressable ads to hit $4.7 billion next year. That’s up from the only about $1.8 billion spent today, according to MediaPost. In other words, the spot isn’t holding its value and the ability to target segmented audiences is in ever-higher demand.
We see firsthand the trends driving this shift in our work with Nine in Australia. As an integral technology partner in the top broadcaster’s 9Galaxy automated TV trading platform, we’ve helped power audience-based buying initiatives that have removed 80 percent of the workload associated with trading TV. By 2020, Nine intends to make all inventory available for advertisers and brands to buy in an automated fashion, maximizing value, and reach along the way.
In the U.S., we see a perfect storm of factors and trends that are driving a significant shift in demand or interest in audience-based buys:
- Spotlight on the spot’s flaws getting brighter. Make-goods, manual processes, and an increasing need for speed all put spots at a disadvantage versus audience-based buying.
- Social has brands and agencies hooked on measurability. Data is king, and the metrics served up by major players like Facebook have made brands and agencies more demanding when it comes to TV.
- Some media companies are eliminating certain linear channels in favor of video-on-demand plans, thereby removing spot opportunities altogether. This, combined with the increasing trend of younger audiences consuming media on the move via mobile devices, shows why audience-based buying is beginning to make more sense.
- Key stakeholders coming to the table to find a better way. Local TV broadcasters' TV Interface Practices (TIP) initiative is bringing agencies, tech vendors and broadcasters together to pursue a shared vision and set of standards to improve workflows.
- The global content, station, and MVPD owners are seeing success outside of the U.S. A considerable number of content owners, MVPDs and broadcasters have global parent companies that are seeing audience-based success outside of the U.S., making it only a matter of time before they seek success from similar strategies in North America.
Audience-Based Strategies Help TV Buying Get More Scientific
Audience-based approaches to TV buying are incorporating audience predictions into planning. They are using algorithms and AI to find hidden pockets of desired audiences across a range of programs for more effective campaigns. In short, they are applying some of the critical innovations powering many of Silicon Valley’s greatest hits to simplify how TV ads are purchased and provide a critical path to monetization in shifting competitive landscapes.
See how xG GamePlan can bring the power of audience-based buying to your content monetization strategy. Learn More...