TV's Ad Growth is Dependent on Advanced Data and Analytics

The most critically relevant asset required for TV network ad revenue growth is advanced data and analytics According to a new report conducted exclusively for MediaVillage by Jack Myers TomorrowToday and based on survey feedback from 750 national advertiser and agency executives and more than 100 interviews conducted over the past twoyears the most significant contributing factor for ad spending growth among eleven measured attributes is amp8220market research data resources and analytics that support marketersamp8217 and agenciesamp8217 media decisionmakingamp8221 Other primary influences even to achieve revenue stability include an effective sales organization trust and visionary leadershipTo effectively compete it will be essential for the TV industry to achieve near data parity with the walled gardens of the threelegged marketing GAF juggernaut Google Amazon Facebook However even as Facebook is being slammed on trust issues those involved in daytoday decisionmaking for media buying say most TV networks have different trust issues They are critical of many TV networks for underestimating ratings erosion and their consistent failure to deliver on ratings guarantees Yes traditional models will remain intact and the industry will appear to be stable as the UpfrontNewFront season approaches However as the TV industry looks forward the need is increasingly apparent for wider distribution of advanced television technologies and standardized data to determine the ROI value of addressable and interactive TVThe recently published MediaVillage TomorrowToday Advertising Shopper Marketing ampamp Trade Communications Spending Data and Forecast 20002020 estimates 2018 Interactive VOD ampamp Addressable TV advertising spending of 11 billion an increase of 40 over 2017 TomorrowToday optimistically forecasts growth to slightly more than 3 billion in 2020 with true hockey stick growth dependent on access to technology rollout and availability of settop box data Realistically these goals face significant obstacles and risksFirst advanced television solutions remain nascent and the ad models for addressable TV are undeveloped While Wall St loves tech companies with unproven models investors have little patience with longterm investments made by legacy media companies There is a horse vs cart analogy at work what39s comes first amp8211 proven ad models and revenue streams or the data required to validate and support the businessSecond privacy concerns need to be respected and addressed more proactively as targeted advertising becomes more transparent As has become obvious in the past few weeks it does not serve the best interests of the industry when privacy issues move to the forefront of the conversationThird antitrust issues will crop up as the TV network industry comes together as it must behind new standards for competing with the walled gardens of Facebook Google and AmazonWhile several broadcast and cable network companies have invested millions in data initiatives often with great fanfare they have yet to establish positive perceptions of their efforts among advertiser and agency executives Fewer than a quarter of ad executives surveyed by TomorrowToday rate those investments as very good or excellent top 3box on a 10pt scale compared to twice the number who highly rate walled garden data and analytics available from Google Facebook and Amazon Only ATampampT and VerizonOath are currently considered viable competitors to the three digital behemoths for advanced technology solutions and advanced data and analytics says the TomorrowToday reportUntil there is a base of standardized reliable and representative walled garden data that accurately reflects the ROI of addressable interactive OTT and advanced TV marketing the TV industry will struggle to justify significant ad spending increases Competing with GAF will require access to TV settop box data an asset most MVPDs multichannel video programming distributors cherish and hold very close to their vests Their reasons justifying these protective policies will be difficult to overcome as global regulatory policies become increasingly more nationalistic and consumercentricAntitrust realities are also evident in an industry that has been stung in the past by accusations of collusion My opinion fuhgeddaboudit TV networks should actively consider integrating the multiple data initiatives currently underway including OpenAP THOR and ATP The past cannot be prologue and the regulatory issues need to be confronted headon if the TV industry is to effectively compete in the Battle for Data Equality The only other option is for the industry to identify alternative growth strategies The future of the TV industry depends on how the Battle for Data Equality unfolds

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TV's Ad Growth is Dependent on Advanced Data and Analytics

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Jack Myers

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