Three Digital Video Trends Shaking Up The Linear Market
“On TV & Video” is a column written by the sell side of the digital media community.
Today’s column is written by Frans Vermeulen, Chief Operating Officer at Tru Optik, a TransUnion Company
Advanced TV has a lot to recommend it as an advertising channel. Marketers see it as an opportunity to transition away from cookie-reliant channels in a way that preserves the data and targeting capabilities of those channels. And some buyers who haven’t traditionally purchased linear TV advertising view it as a way to extend their reach beyond search and social.
Three trends are accelerating the convergence of digital and linear TV in both the advanced and linear marketplaces. First, advertisers are using more of their own data. Second, they are prioritizing data-driven decision-making across the planning, targeting and measurement processes. And finally, they are implementing flexible buying strategies.
Let’s examine each of these trends in turn.
First-party data accelerates in the TV space
Data-driven decision making is now a reality across both advanced and linear TV, thanks to the growing number of addressable devices and the opportunity to align consumer insights with planning, targeting and measurement.
Now, television platforms want to integrate even more consumer data from marketers, for whom the activation of CRM and other first-party data is a critical priority. A 2021 Merkle study found that 88% of marketers now rate the collection and storage of first-party as either a high priority (58%) or highest priority (30%) objective.
This sea change in marketer goals is a direct response to the increasing restriction of identifiers and the evolving regulatory landscape. But even with more robust first-party data assets, marketers still need help to scale these insights, especially in emerging ecosystems like streaming, connected TV and over-the-top.
Leveraging those often limited first-party data sets into (very attractive) streaming media ad inventory has been notoriously difficult. That’s why we now see first-party data being modeled and expanded, combined with third-party audience data for activation across streaming media end points.
Convergence of linear and connected TV operations
Few brands or agencies have fully converged teams and resources, though we’ve observed that concerted efforts are underway. As long as linear and CTV remain siloed on the buy side, organizations won’t be able to tap into and execute against specialized data sets across these viewing modalities.
A handful of companies on the sell side have started merging their sales and operations, an encouraging sign. As an example, cable operators invested many millions of dollars in the past decade to enable set-top boxes for video on demand and linear addressability.
On the programmer side, NBCUniversal is a great example of a TV network acting to bring about linear-digital convergence. In December 2020 it announced a partnership with Freewheel to incorporate more technology into the buying process for both linear and digital ads, complementing earlier investments in measurement and inventory fluidity via its measurement solution CFlight.
Next, I expect the buy-side to implement more integrated teams after having success in converged-planning experiments. This trend will become pronounced in the second half of this year.
Traditional TV networks will embrace more bundled offerings for advertisers looking to balance traditional planning with more advanced targeting strategies. While the majority of ad-supported video on demand inventory is sold directly, we’re seeing large TV networks more aggressively package inventory and data solutions for preferred programmatic deals.
This trend will accelerate so long as TV networks retain reasonable and predictable control of inventory and ad revenue while enabling buyers to apply more sophisticated, data-informed trading strategies via a demand-side platform of choice.
ViacomCBS gave its acquired streaming platform Pluto TV a starring role in its 2019 upfront pitch. In 2020, pushed by accelerated and pandemic-driven consumer adoption of streaming channels, more networks embraced bundling, including Disney, Hulu, Fox and Tubi. I don’t foresee consumers reducing their in-home streaming by any significant amount, so I expect that this trend will only accelerate.
What is the future of the TV upfront? Evolution, but not death. There’s no question audience-based trading will continue to change upfront strategies. But there’s still good value for marketers who reserve inventory in advance in exchange for discounts from sellers, additionally reducing risk for both parties.
Marketers and linear TV networks are making serious strides to adopt more data-driven strategies that track with the rise of in-home streaming and the convergence of digital capabilities with traditional TV viewing.
For most homes, digital video has become natural, often driving more personalized interactions by enabling consumers to select what, when and how they watch. When the TV industry is able to embrace the data and capabilities enabled by these digital experiences, we’ll be better for it — driving more business efficiencies and more relevant, seamless advertising experiences for consumers, including lower ad loads.