"Smarter" TV Ads Means Opportunity for Digital Marketers

Marketers and media planners are constantly faced with the debate surrounding traditional television and digital video. Which do viewers spend more time watching? Which platform will give you a better ROI for your advertising dollars? Should marketers just forget about traditional TV all together?

The short answer to this debate: traditional TV is not dead, not even close.

Today’s programmatic and digital industry news states that millennials are cutting the cord on cable and if marketers and advertisers wish to target them, they have to reach them via digital platforms.

However, this isn’t the full story. Adweek reported a study done by the VAB (Video Advertising Bureau) which revealed that traditional TV lives, even with millennials:

  • The majority of viewers prefer to watch their favorite programs live
  • 81% of people reported that when watching VOD (video on demand), they watch at a time that’s convenient for them which results in increased ad impressions
  • Between 2014 and 2017, VOD ad impressions increased almost fourfold to 23.3 billion.

TV is still very present – consumers are watching it live and on demand – so for marketers, it’s important to understand that this is still a very important advertising channel not to be ignored or forgotten.

In addition, TV is seeing a lot of changes that allow for more effective targeting. Historically, this platform hasn’t seen much opportunity for growth or change, but new features and capabilities are challenging this norm, making it essential that marketers allow for budget in order to implement these changes.
The latest platform that media buyers should be investing time and budget for is Smart TVs and their compatibility with programmatic advertising. One of the biggest challenges that marketers have always found when using TV ads is tracking the consumer journey. What is the time from when they see an ad on TV to actually making a purchase? If someone sees an ad online, they click on the ad, even if they don’t purchase at that moment, as marketers, we are able to track when they eventually do make a purchase. For television, this wasn’t possible until now. Smart TVs are the solution to merging digital with TV for advertising.

Smart TVs create profiles that allow us to know who is watching which programs and thus, which ads they are seeing. This gives marketers a variety of opportunities for better targeting, segmentation, retargeting, sequential marketing, and cross-channel implementation. Examples include:

  • Targeting: Because marketers can see who is watching their ads, they no longer have to play a guessing game. Dollars can be spent more effectively as frequency and timing can be better thought out.
  • Segmentation: Traditionally, TV allowed for very little segmentation, it primarily relied on age and gender. With the smart TV profiles that are created, marketers can rely on more precisely segmented targeting profiles. This also allows them to see the most concentrated audience viewing a program.
  • Retargeting: Advertisers will know if a consumer has also seen a competitor’s ads, enabling them to target these consumers with their products instead – even a direct comparison. With Smart TVs, retargeting can happen both on TV and online.  
  • Sequential Ads: Advertisers know exactly which ads a consumer has seen. This allows them to use a series of ads, in a specific order, to tell a longer or more thorough story.
  • Cross Channel: Once a marketer knows a consumer has seen an ad, they can then target ads on the right device at the right moment.

When all of this comes together, traditional TV offers a great opportunity for marketers to reach consumers on different platforms, with unique messages and at optimal times. However, this can be taken one step further. One of the biggest advantages that advertisers have with Smart TVs is that they can also connect mobile location. This allows them to track from the moment the consumer sees the TV ad to when they eventually make it to the physical store. This eliminates the biggest challenge that TV poses in gauging the length of overall customer journey.

Traditional TV remains an essential part of advertisers budgets and should not be counted out anytime soon. But, in tandem with that, marketers need to ensure they are staying up to date on the latest features and tactics to ensure they are getting the most out of their spend. Tactics like Smart TVs and the ability to track and target cross-channel is a prime opportunity for media planners to reach performance KPIs. Consumers who saw a TV ad followed by a digital ad are 4x more likely to visit the physical store than those who only saw the TV ad. Similarly, consumers who see ads on both platforms, are 3x more likely to make a digital purchase within the hour. It’s clear that with programmatic capabilities, marketers are able to track their advertising more effectively, spend more efficiently and learn more about their consumers.

Talk to us about our TV and Video media buying capabilities including linear TV, programmatic TV, in-stream, out-stream, addressable TV and more.

Programmatic Media Buying 101: Bid Shading And Bid Caching Defined

Programmatic auctions are experiencing a big shift in the way inventory is priced. Media buyers who have been using second price auction strategies are finding that more and more SSPs are moving to first price auctions.  In the second quarter of 2018 a report by Getintent found that 43.3% of impressions were sold through first-price auctions, where the highest bid wins an impression. That figure was much higher than the previous study done in December 2017, when just 5.8% of the impressions analyzed were sold in a first price auction. With more money shifting to first price auctions, the programmatic advertising industry, both on the buy and sell side, had to come up with strategies and tactics to mitigate the effect this change has had on the way they buy and sell inventory.

Bid Shading

Bid shading is one of the tactics, which is relatively new to DSPs, that has been developed as a compromise between first- and second-price auctions.  Buyers are unhappy about paying higher prices than they were used to in second price auctions. Bid shading reduces the price for the advertiser so rather than pay the full first price, they get charged and average price between the first and second price auction.  The price is usually calculated by the SSP or DSP from bid history information which includes typical bid win rates for certain websites.

For right now bid shading is mostly used by the supply-side platforms (SSPs) and is free to the user.  But as first price auctions become the norm for programmatic media buying, more Demand Side Platforms (DSPs) are adopting this tactic out of necessity.

Another, less accepted method of dealing with the shift in auction dynamics has been developed by Ad Exchanges and is called bid caching.

Bid Caching

Why has bid caching all of a sudden become an important ad-tech term to be familiar with over the past month?  This is due to the fact that media buyers using the Global ad marketplace Index Exchange did not know that this tactic was being used for over a year until they published this blog post.

“We didn’t think it was an issue with buyers. We were so surprised. We thought this was an industry practice,” said Drew Bradstock, SVP of product at Index Exchange.

So What is Bid Caching and Why Do Media Buyers Not Like It?

It’s when a lost bid on a programmatic auction is used to fill a subsequent auction, where the impression characteristics do not necessarily match up.  For example, if the buyer bids on a particular publisher’s homepage to appear in the morning and loses that bid, the exchange would roll the bid into another auction for the next piece of content that the consumer views. So instead of running on a homepage, the ad would most likely end up on an article page. For the media buyer, this means that they are not  getting what they originally paid for.

So what are the other negative aspects of bid caching for DSP buying?

  1. Overpaying for inventory: advertisers are willing to pay higher prices for the first page in a user session, so if that’s not what they are getting then they have overpaid for the ad
  2. Messing up frequency caps and pacing: delays between a bid and ad server could increase the likelihood that a DSP found the user elsewhere
  3. Brand safety concerns: ad is served on the same domain but not on the same page

What’s Next for Programmatic Media Buyers?

Ad tech professionals have expressed their frustrations with yet another example of the lack of transparency in the industry.  Just when we think we are finally making strides to improve the negativity surrounding programmatic advertising, a story like this pops up and stirs up controversy all over again.  The negative press that has resulted from Index Exchange’s lack in public disclosure of their tactics has hopefully served as a warning to others in this space to own up to any changes in their platforms that would have a drastic effect on the way inventory is bought and/ or sold.  In the meantime, it’s important for media buyers to know all the tactics and associated terms with the move to first price auctions and how their DSP partners are adapting to the changes being made.  Talk to us if you have any doubts or questions about what your next steps should be.

Post GDPR, Are Data Clean Rooms The Answer To Accessing Walled Gardens For Programmatic Buyers?

As GDPR enforcement becomes a reality not only in Europe but also here in the US, advertisers are struggling to find a way to scale the walled gardens and optimize their data assets.

As of May 25, 2018, Google announced that DCM users will be unable to use cookies or mobile device IDs to connect impressions, clicks and site activities from the DCM logs, users will be limited to Google’s own Ads Data Hub for those metrics.  For some, this means that they are satisfied to stay within the Google stack but not every brand’s solution will be and should be limited to Google.  But if media buyers want to analyze their spend outside of Google’s platform and offer up any attribution, then just using Google won’t work.

“Some marketers who spend 75 percent or more of their budgets on Google will be fine just letting Google do the analytics,” says Alice Sylvester of Sequent Partners.

Google wasn’t the only one to lock down their platform.  In response to the combined pressure of GDPR and the Cambridge Analytica scandals over its handling of personal information, Facebook decided that it would shut down ad tools called “Partner Categories” powered by outside data brokers. Those tools let Facebook advertisers target ads at people based on third-party data such as their offline purchasing history.  This means advertisers will have access only to their own data and data Facebook collects itself.  If an advertiser wants to pull campaign-level insights to inform future campaigns or use the data for the basis of an attribution model then they are out of luck.

Introduction of Data Clean Rooms

Data clean rooms allow large inventory partners like Facebook and Google to share customer information with brands, while still maintaining strict controls in place.  Data clean rooms were named for the completely airtight rooms where microchips and other sensitive materials get made.  In this case, the rooms enable a shared environment between two or more companies that is completely secure from external access (no wifi) where each company decides the level of visibility to their data.  This eliminates the possibility of data leakage for companies like Facebook which caused the Cambridge Analytica mentioned earlier.

“We and a partner combine a data set with very specific rules and controls around how each party can operate within the shared environment,” said Scott Shapiro, a product marketing director for measurement at Facebook, who noted that Facebook didn’t invent the clean-room concept.

The concept is to create a safe space where data can be share and manipulated without leaving the inventory partner’s environment.  Specifically for Facebook, a brand can create an audience based on first-party data, like a list of email addresses and then push that list into Facebook, match it, and grab a copy which they can later combine with their data as the basis for attribution, measurement and modeling.
How it happens in reality is that an advertiser will lead a clean or wiped laptop or device that has never been connected to the Internet with that advertiser’s first party data, which in most cases is an email list.  A second clean computer is loaded by Facebook or Google with impression-level and non-PII campaign data.

Maybe, The Answer to Scaling The Walled Gardens?

For advertisers with a lot of data and substantial programmatic advertising budgets this is a great opportunity to scale the otherwise elusive walled gardens.  The data clean rooms create a safe environment for data providers to share the marketing data that brands need and crave to model future media buys and advertising strategies. If managed in the right way, with the right methods and standards, this would be the tool for brands to really understand their walled-garden ad spends within the larger marketing ecosystem.  For advertisers and publishers there is a lot at stake in the post GDPR world of data governance.  There is no room for unintended data sharing because the consequences are too great.

Marketers have been eager to get more insights out of Facebook and other walled gardens but it’s unclear how many brands or agencies will take advantage of this opportunity to get more out of their spend with the largest inventory providers.  From Facebook’s perspective they are not advertising the data clean room solution because if they gave advertisers too much access to data buyers might eventually become less reliant on their platform for scale and identity data.  But Facebook and Google also don’t want to piss off their advertisers because they are demanding more data so this is the solution that they can offer for brands that pressure them to giving them more insights.  There is still the issue of the manpower involved and the fact that the data is limited to a snapshot in time but advertisers who buy into this solution are fully aware of what they are getting and have to decide if the value is worth the effort.

Amazon Advertising – $1 Trillion Valuation Is Just the Beginning

On September 4, 2018, Amazon became the second publicly traded company in the United States to reach a $1 trillion valuation. Just before noon, Amazon shares reached $2,050.49, before falling slightly to $2,037, ending the day just shy of the 13-figure number. Hitting this milestone in a short month after Apple became the first company to hit this valuation leaves many to speculate which of these 2 players will reach the $2 trillion number first.

Apple, which hit the $1 trillion revenue mark on August 2, 2018, brought in $48 billion in profits last year. Amazon, on the other hand, only saw one tenth of that profit number. But, interestingly, The New York Times reported that in a Facebook poll run by a group of young Wall Street Investors, which posed the question of which company would reach $2 trillion first, the vote overwhelmingly favored Amazon. With lower revenue numbers, what makes people so confident that a company making less money will have a more profitable future?
With a very diversified plan for the future, there are a few different aspects of Amazon’s strategy that give people confidence in the company – for example its breakout into health and pharmaceuticals, AI advancements and physical stores. But the one offering that most feel will propel Amazon into their successful future is advertising. Back in January, we wrote about how Amazon took 4th place for display ad buying in 2017 and is keeping its eyes on 3rd place. This growth has not slowed down with their ad business recently surpassing $2 billion in quarterly sales. This number might seem small when compared to digital ad giants, Google – who brought in $35 billion in digital ad dollars in 2017 – and Facebook – $17.37 billion. However, Amazon has not come anywhere close to capping the advertising capabilities on their different platforms.

Before making any major additions to its advertising, Amazon just announced that they are rebranding themselves. To avoid any confusion. Amazon Advertising will now encompass Amazon Media Group, Amazon Marketing Services and Amazon Ad Platform.

  • Amazon Media Group: This group handled customized ads that required special collaboration from Amazon.
  • Amazon Marketing Services: This is where brands and agencies could participate in ad auctions and buy display, search and video ads
  • Amazon Ad Platform: This is where advertisers were able to target ads outside of Amazon

As Amazon Advertising now encompasses all of these areas, Amazon Marketing Services will be referred to ad “advertising console” and Amazon Ad Platform will now be known as Amazon DSP. Senior VP of Amazon Advertising stated, “This is another step towards our goal of providing advertising solutions that are simple and intuitive for the hundreds of thousands of advertisers who use our products.” This simple brand change will enable the company to push further into digital advertising.

Most of Amazon’s current advertising dollars come from product search results and sellers sponsor product slots. They are at a huge advantage as they collect data from consumers actual shopping habits, rather than just interests and searches. When ads are placed on Amazon, advertisers have a great opportunity to reach consumers at the critical moment when they are about to make a purchase.

Beyond this, Amazon has great opportunities to build advertising products on top of its existing properties, giving them a larger market share of the $88 billion digital ad industry. There is talk that they will soon sell ad space on their Thursday night football stream Twitch, a live streaming video platform. Twitch users could soon see ads if they opted out of the $9/month premium subscription. And, Amazon has yet to run ads on Amazon Prime Video. These are a few of the tactics that Amazon might introduce to reach $22 billion in digital ad revenue by 2020, making them the third largest digital advertiser.

Now is a great opportunity to take advantage of Amazon’s Advertising and DSP platform. If you want to learn more about Amazon’s capabilities and how it can add value to your media plan, or ask questions about Amazon’s Advertising capabilities, Digilant can help. Reach out to us here.

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