Chasing the Wrong Ad Goal: Why CEO’s Should Care

Chasing the Wrong Ad Goal: Why CEO’s Should Care and How They Can Eliminate the Problem

by Sean Cunningham

O’s: Your marketing department could be chasing after the wrong advertising objective—one of ad efficiency, which tracks the proverbial set of “eyeballs” rather than the sale.

Ad efficiency is defined as the “ratio of the cost of advertising to the number of people reached.” The problem lies in the fact that, by definition, “ad efficiency” represents quantity, not quality.

Moving your company’s marketing efforts along the scale toward quality requires a top-down approach to re-prioritization that only CEO’s can command. We suggest four areas of focus.

“Ensuring your advertising is effective and efficient is the job of the CMO. Ensuring your marketing is achieving the vision of the company can be improved with the
input of the CEO.”

Demand sales, not eyeballs. Ensure that your advertising efforts are aligned with the their purpose—to sell more stuff—and request metrics that only report how the marketing cycle is directly affecting sales. If the right tools are not in place at your company to make that connection,approve your CMO’s request to acquire them and for the staff to receive any necessary training.

Focus on the best customers. Being able to prove the worth of all the paths that lead to sales ultimately requires a single view of the customer across the entire company. This way, your marketing team can clearly and accurately evaluate customer value, and ensure that the company is growing relationships with its most loyal, profitable customers—not the easiest new customers for a digital network to acquire (again, eyeballs).

Force a reality check on media. Are you investing in media (which is most companies’ biggest investment after people and plant) the way customers actually use it? People are drawn to content. That’s a power owned by branded networks with reliably target-able viewers. Yet, there are ad technologies that offer up aggregations of audiences as if the content doesn’t matter. Ensure that your marketing efforts are tapping into the media that your customers are loyal to. Don’t assume your CMO understands your customers better than you. Ask questions about who, what, when, where and why.

Once and for all, eliminate silos. Marketing, sales, operations, finance and technology must all work in lockstep to fully understand, reach and retain key customers. When you meet with your CMO, bring all departments together to participate in the discussion and ensure that everyone is working toward a holistic customer strategy, one that’s based on quality, not quantity.

Ensuring your advertising is effective and efficient is the job of the CMO. Ensuring your marketing is achieving the vision of the company can be improved with the input of the CEO.

 

Online TV Versus TV Online: There’s A Big Diffference

Article written by Sean Cunningham, CAB – President & CEO

The wave of online video coverage this spring and into the summer has missed a critical distinction for advertisers: There is a fundamental difference between TV online and online TV. Knowing it will allow advertisers to build from an assured base online.

I call TV online the 50+ sites where viewers seek out streaming, information and conversation related to their favorite TV shows. I call online TV the compendium of user-, publisher and brand-generated videos that consumers encounter across the Internet. Both get about 20 hours of time every month from U.S. consumers. But they do it in vastly different ways, with real implications for advertisers.

TV online sites grow with viewers’ all-screen appetites. Think ESPN, The Food Network, MTV or SyFy and programs like “The Walking Dead,” “Pretty Little Liars,” “Fargo,” “The Americans” or “Conan.” Their audiences convene predictably because they’re committed to the content, so they form masses with a common source of connection.

Show fans watch wherever, whenever they want; they read about the shows and the talent; they watch companion content (e.g., “Last Chance Kitchen,” the online contest that parallels Bravo’s “Top Chef”); and they share their reactions on-site as well as on social networks. They literally propel the content.

Online TV is a different animal. The portals can be destinations, but the programs don’t have natural audience momentum yet. For every “Gangnam Style” billion-view video, there are thousands of videos and channels gaining viewers but not yet establishing audience momentum. Without regularly scheduled content in common, the audiences are floating and free-forming; they come and go in different directions.

TV online sells pre-assembled mass audiences for predestined showings, primarily through direct sales forces. Advertisers buy known audiences attached to specified content. Advertising appears in video players at the center of sites the audience came for. The models are too simple to game (no viewability issues, no bots/fraud), and there are universally accepted measurements of performance. TV programmers come from a make-or-break heritage: Viewers stay or the model breaks down.

Online TV sells discovered audiences that can be aggregated to mass, primarily through an expanding web of third parties and exchanges. Advertisers buy demographic or behavioral triggers, and impressions are allocated and aggregated algorithmically. Advertising appears in a range of venues, often thumbnail-sized players below the fold.

Importantly, TV online pays programmers enough to keep creating content that’s compelling, consistent and sustainable. It takes a concentration of money and time to create the content that sets up robust advertising environments. TV networks invest enormous sums in original content — sustainable stories made for serialization — and audience development. Branded TV programmers put 50% of revenues into owned content (more than $125 billion in the past five years).

In online TV, the biggest portals are just starting to invest millions in original programming. They aren’t destinations for content on a schedule yet, and likely won’t be anytime soon. Online TV pays programmers pennies on the dollar — the LUMAscape exacts its “tech tax” first — that don’t support continual upgrades in quality.

Advertisers need the right number of customer connections to plan against. For them, the real utility in upfront buying is being able to synch audiences to sales goals, thereby laying the foundation for a year’s worth of relevant audience engagement. Buying right is about getting that foundation with an interconnected audience — people who propel content (including advertising) across screens.

TV online brings predictability — planning from an assured base — into the otherwise uncertain territory of online video. In the process, it forms a hedge against the equal opportunity problem of ad fraud, which can leave an advertiser like Mercedes with a 57% unviewable rate.

Contrary to the rallying cry of some Internet ad titans, it’s not “all video.”

With all advertising, the key is knowing what you’re getting, whom you’re getting it from, whom you’ll attract in the way of audience, and whom they’ll draw in through various forms of social networking. Knowing the difference between TV online and online TV is the first step toward predictable audience momentum that sells more stuff.

 

Why There’s No Substitute For The Power Of TV’s Committed Audience

Article written by Sean Cunningham, CAB – President & CEO

Picture this: You’re on your way to test and buy the new Cadillac CTS-V, with a 550 horsepower engine and best-ever features. Right outside the dealership door, you are stopped by an energetic man who introduces himself as “your new friend.” He says he knows you’re here for the Cadillac but he assures you that the enlightened option is a combination of 39.3 Vespa Scooters (14 HP/scooter).

“It’s transportation with 550 horsepower,” he says. “And you’ll get 4,600 miles per gallon with your Vespas. That’s an astronomically higher return on investment.”

When you ask about delivery and warrantees, though, New Friend has two disclaimers. A web of middlemen handles fulfillment, so you won’t know where your Vespa is coming from. About a third of the scooters might not even exist, some may not have brakes, others may be stolen, and others may never leave Ghana. As you grab the handle on the showroom door, New Friend insists you’re not focused on what’s really important. “We’re clearly moving into the Post-Cadillac Age,” he says. “It’s a new transportation paradigm altogether!”

You make a mental note to keep talking with New Friend. There’s a good idea in the Vespa proposition. It’s just not a substitute for the Cadillac.

Aggregation isn’t concentration

That’s a parable of this year’s pre-Upfront posturing. Ad tech giants and startups alike proclaim they’re ready for their “just like TV” close-up. Just don’t look too closely. They’re trying out TV-like content in an environment that lacks the scale of commitment required to be the bedrock of $280 billion in advertising spending.

Their decision to focus on original programming (and the promotion associated with it) presumes that’s all that has been missing, and that the math will do the rest from here on out. The feeling is that mixing old-school content with the best in ad tech, what can possibly go wrong?

At the moment, though, pure-play online video confronts advertisers with a hodgepodge of newcomers and niche content from across the internet. To mimic TV, unconnected audiences need to be aggregated. The magic’s in the math, supposedly – profiling, aggregating, optimizing.

Two assurances make the TV Upfront more mission-critical than ever for the world’s biggest advertisers. Viewers committed to TV shows convene for them by the millions, and extend their commitment across screens and social networks. They convene in time and over time, and their commitment deepens along the way. So advertisers get the unifiers they can plan and count on to move products en masse throughout the year, year after year.

Concentration is power

TV means iconic content brands airing more than 3,000 programs a week, with more than 2 trillion video streams annually on TV alone, and a viewing commitment of more than 75 hours/month. Add in internet interaction with TV content and brands, and the commitment exceeds 90 hours/month. That’s for cable alone, where nearly 50% of revenues go toward a $25 billion a year commitment to original programming, with 3X the “normal” TV trial period for new shows.

This content commitment intensifies and produces increasing returns over episodes and seasons. What’s more, it acts as an authentic bonding agent in the digital diaspora. Advertisers buy their way into the bond to create the kind of sales call that’s missing in much of today’s online ad model. The ad contract and model are proven and transparent. You get what you pay for.

In the case of pure-play online video, the benefit for advertisers gets a little cloudy. Theoretically, they get a chance to be circulated and seen by people across a breadth of sites. The picture gets murkier when you consider the truths coming to light about the internet as an advertising frontier: 36% ad fraud, 55% unwatchable ads, 55% “tech tax,” and more. You don’t really know where your money’s going or what you’re getting en masse.

Pure-play online video is alluring. It’s new. It’s just creating rules of a road it is paving. And that is valuable. But we need to keep things in perspective.

Aggregation is relative; commitment is absolute. We are entering an era where advertising is framed by the commitment of audiences to the content they invest time in. In this era, TV is more valuable than ever. It’s not about how much horsepower you can aggregate; it’s what happens when you put your foot to the floor.

A Newsletter Worth Reading? See Why

By Danielle DeLauro, SVP Strategic Sales Insights

We know everyone’s inbox is already inundated with emails so we thought long and hard before creating a CAB newsletter.  However, with the rate and pace we are creating content we understand if it has become difficult to keep track of all CAB’s presentations, white papers, opinion pieces, etc; so we’ve heard you loud and clear, therefore we present CAB Perspectives.

Our goals with CAB Perspectives is simple – Inform, Encourage & Inspire

Inform you of the goings-on at the CAB

Encourage you to seek out answers to some of the common questions arising within the industry today

Inspire you to think about a topic in different ways

We hope this e-newsletter is a one-stop quarterly source to bring you up to speed on everything CAB.  Starting with “Current Releases,” we review all the original content produced in the last quarter; in “Coming Soon,” we let you know some of the projects you can look forward to seeing from us in the upcoming quarter.  In addition, we have original commentaries on a broad range of hot topics from CEO, Sean Cunningham, and each member of the CAB Insights team.

As always, if you have any comments, feedback or suggestions about the newsletter or future topics/projects please feel free to reach out to me directly at danielled@cabletvadbureau.com

User Experience and Consumer Choice Driving Content Consumption

By Jason Wiese, VP Strategic Insights

During his “TV Now & Into The Future” presentation at this year’s Ad Age Digital Conference Richard Greenfield, one of the industry’s premier media analysts, identified several TV trends that he sees shaping the industry, many of which included common themes centered on how the user experience and explosion of consumer choice will drive content interaction and consumption.

Consumers view their time as a precious investment and as such now demand an easy path to watch what they want, when they want, where they want.  While we’re all aware of the competition facing the industry from other video sources there’s no doubt that cable is very well-positioned to continue delivering on the needs of consumers and effectively compete for their time and attention.

The recent substantial growth in video streams via “TV Everywhere” and increased usage of TV-based VOD are just two examples of cable’s outstanding ability to engage consumers with easy-to-access content both in and out of the home.  This growth should only accelerate with further advancements around the user experience as both manufacturers and cable providers alike develop even more intuitive interfaces enhanced by social media connectivity and addressability functions for next generation Smart TVs, set-top boxes and other devices.

Of course it’ll be crucial to continue evolving to meet consumers demands and desires in this ever-changing world so it should come as no surprise when Mr. Greenfield predicted that we’ll see more innovation and change within the TV space over the next five years than has been seen in the past fifty years…however we would also add to this prediction, “with cable brands leading the charge.”

For more information contact Jason Wiese at jasonw@cabletvadbureau.com

Broadband Only Homes: Who, What and Why

by Evelyn Skurkovich, Sr. Director Research & Insights

For all the talk about Broadband Only homes they currently represent less than 2% of all TV homes.

Nielsen took the step to measure these Broadband Only homes at the start of the ‘13/’14 TV season to account for all TV viewing in households within the national sample.  For now, these TV homes are currently excluded from local TV measurement and an inclusion date has not been officially announced yet.

Because of this addition, Nielsen’s new definition of a “TV home” is one that receives at least one signal via cable/satellite/over the air/telco or broadband.  These Broadband Only homes tend to be a select group though – usually younger (18-34) and financially constrained; they’re typically people who were already lighter TV viewers with limited discretionary spending.

This group will continue to grow marginally and not at the rapid pace some are predicting.  Overall TV trends remain positive and the medium still dominates total video viewing, even among 18-34 (90% of total video time is spent with TV).

For more information contact Evelyn Skurkovich at evelyns@cabletvadbureau.com

Sports and Twitter; the Dynamic Duo

By Bart DiNardo, Insights Analyst

The engagement of Sports fans on Twitter is at an all-time high. Social Media has proven to be a perfect outlet for fans to support or complain about their favorite team or athlete. Quarter after quarter, week after week Sports is one of the top genres in Social TV buzz.

One example of TV’s influence on Twitter can be seen during an extensive delay in the 2012 Daytona 500 when driver Brad Keselowski turned to Twitter to pass the time and interact with fans. Keselowski “live tweeted” during the delay and gained well over 100,000 new followers. By the end of the race, he had increased his twitter followers by 20%.

Since the start of 2014, over 45 million Tweets have been about sporting events, with over half coming from Cable.

In the next few weeks, CAB will be releasing a Sports themed analysis highlighting the success of Cable Sports Programming on Twitter. This in depth look at Cable Sports will provide insight in to the growing relationship between Cable viewers and sports programming.

For more information contact Bart DiNardo at bartd@cabletvadbureau.com

ABC’S Great Cable Moment

Article written by Sean Cunningham, CAB – President & CEO

On Oscar night, ABC got to feel like a cable network for a flash.

When Ellen DeGeneres mobilized the Oscars audience to crash Twitter – by retweeting the “selfie” she took using sponsor Samsung’s phone – ABC got a “peek” experience of how cable networks (including its own ABC Family) get audiences to respond night after night.

Ellen’s stunt was a wonderful exclamation point for the power of TV in the digital age, affirming the medium as the source of the conversation that connects everyone.

What’s more powerful is the multiscreen momentum that cable program audiences create week after week. It doesn’t take a stunt. It comes directly from the commitment of the audiences to the content itself, and to the conversations they create around it – which, by the way, include the ads.

These predictable, plan-able audiences can beat the Oscar stunt in terms of concentration. Think intensity of commitment. The finale of Breaking Bad drew 10.3M viewers and nearly 7M social media interactions. Pretty Little Liars, while smaller by comparison, is even more intense: The 2013 season finale drew 3.3M viewers with 1.9M tweets alone. On a tweets-per-viewer basis, Pretty Little Liars beat the Oscars by nearly 70% (.58 tweets/viewer vs. the Oscars’ .34 tweets/viewer).

That’s why cable networks can design the infrastructure for advertisers to participate in all-screen momentum. Their audience commitment extends to the complete story. The momentum they create is predictable and reliable. You can plan on it.

Once a year, a broadcast network can crash Twitter. We break Twitter’s windows every night.

 

Why Cable Ad Share Will Continue to Grow

Article written by Sean Cunningham, CAB – President & CEO

Beta Research kicked off 2014 with a study finding that agencies and advertisers expect to boost spending on cable networks in 2014 (bit.ly/LMAoE9).

Why is cable’s share in ad spending growing? There are two simple reasons: content commitment and multiscreen momentum.

All of the 10 networks Beta cited have invested heavily in original programming. That’s true across the board in ad-supported cable. Networks and MSOs alike commit more resources to original TV content than anyone else – more than $125 billion in the past five years on the cable side – and they stick with programs long enough for audience to build.

Audiences answer with a commitment of their own. They tune in, binge-watch, talk, tweet and share about the content across all devices. Much has been written about the phenomenon of cable hits gathering multiscreen momentum. What’s gone unsaid is that this momentum is now a matter of design. Cable programmers are launching new shows and expanding existing content with multiscreen connections in place.

More importantly, cable networks have active multiscreen advertising programs. That’s why the big media buyers in the Beta study gave the highest scores for innovative multiscreen opportunities to cable networks. They are built for integration, and act as a bonding agent in an otherwise fragmented digital space. They do it every day. It is the ethos of the brands.

In a snapshot, the study defines the cable difference in digital space. Cable networks not only spark multiscreen commitment, they have created the pathways for advertisers to participate and profit from it. Cable means commitment. Count on it.