Digital killed the television star

05 May 2014

It has always been tricky to identify and target audience demographics in TV advertising. "Spray and pray" is how Yahoo’s chief of sales, Wenda Harris Millard, recently summarised the position. The advertising business was built on top of network television. Traditionally, advertisers could reach the majority of viewers by buying prime time slots on 2 or 3 channels. That approach is still possible (Superbowl, World Cup, X Factor Final) but the choice of channels and the rise of personal video recorders (PVRs) have materially diluted the model. The development of cross-platform content offerings and the natural corollary, a platform agnostic audience, is equally significant.

Cross-platform Ratings

In October last year, Nielsen launched a cross-platform campaign ratings system which combines commercial exposures from TV and online ads. The system is a welcome evolution in campaign data, allowing advertisers to see combined audience and platform splits and vary the effectiveness of campaigns accordingly. However, whilst data sources such as Nielsen are useful indicators of viewer size, over-the-top content providers (OTT) such as Netflix, Lovefilm and Hulu are pursuing a more scientific approach.

The Science of Data

According to the Australian*, Netflix has 800 engineers in Silicon Valley dedicated to dissecting user behaviour: "Not only do they track what people are watching, but how they watch it, when and on what device. The company knows when its subscribers pause, when they fast-forward, when they "binge view" and when they abandon a series."  Hulu speaks of its ability to hyper-target viewers based on geography, platform and device. This level of audience understanding and service personalisation brings clear benefits for brands and advertisers. However, most OTT providers (Hulu excepted) do not carry ads. As long as that continues, a Pandora’s box of rich data will remain closed to them.

Brands as Content Owners & Creators
Enterprising brands and advertisers are finding alternative means of interacting with their audience. Product placement offers a simple opportunity to target viewers of specific shows although it is yet to become the panacea many advertisers and broadcasters had hoped.

The most adventurous brands are investing aggressively in original content creation and production. Global nutrition company Herbalife and U.S. football team LA Galaxy recently launched their first-ever original web series, Be A Pro, with the objective of changing the culture around fitness, nutrition and soccer. Red Bull, a pin-up for content production, operates a TV station, prints a global magazine and produces hours of documentaries, films and music. The Creators Project is a fascinating collaboration between Vice and Intel.

Ownership provides control; the brand becomes storyteller; a direct relationship is established between brand and audience. Most significantly for a sector often hit hard in times of financial hardship, new revenue streams are being created.

*20 September 2013, Why Netflix’s viewer data is TV’s next star.