Opposing Forces

The TV ad buying industry has recently become enamored with programmatic buying in hopes of lowering costs (media and service).  Programmatic buying works best when buyers can determine the value of an audience based on proposed cost, the size of the audience and knowledge of that audience.  Having worked with programmatic buying in digital I can tell you that the way programmatic buying will work in TV is by buying many smaller, more homogenous media properties and fewer large, diverse ones. That should mean media buys will be laden with “long tail” cable networks rather than lots of highly rated programs like American Idol or The Super Bowl. If set top box and shopper loyalty card data can be used to better understand the audience’s product purchase behavior it will be a boon for clients and agencies driven by ROI.

However, two opposing forces could limit our ability to execute on this. Both are pushes by government and consumer advocates. The first being the desire to unbundle cable TV packages—allowing a la carte channel selection–in the hopes of lowering subscription costs. The second is the ongoing push for personal data privacy.

A la carte cable selection will have major impact on many long tail cable nets who will have a tough time surviving. Will people choose to pay for networks that they rarely watch or will they select only the networks that they routinely watch?

Privacy concerns will mean less and less data will be captured and shared about people. With less data we are forced to make less informed decisions than we can with more data. Privacy advocates fail to tell consumers that more data sharing may result in a) people seeing fewer irrelevant ads and b) fewer ads in total.

We don’t know where the chips will fall on this but it is worth watching how it plays out.

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4 thoughts on “Opposing Forces

  1. David Hoo says:

    Data, but the right data, is how media should be valued. The right data is loyalty card purchase data which hopefully will not be an issue so long as the privacy agreements allow sharing on a fully de-personalized basis, By fully de-personalized, I mean that it is not identifiable either directly or indirectly. Personal health data is properly protected in this way by HIPPA regulations, including personal criminal liabilities if the data is compromised

    Importantly, this data then needs to be properly analyzed. In analyzing advertising effects for 20 plus years, we have learned that for frequently purchased products and services, that advertising only impacts penetration and not repeat purchases. The latter is impacted not by advertising but rather more fundamentally by underlying consumer usage patterns and the product or service experience itself. Therefore, ad effects must be isolated on penetration purchases is order to best understand the effectiveness of copy and media in impacting consumer purchasing. Thus applies to both offline and online advertising.

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