The Oracle Data Cloud blog highlights the latest data-driven insights and trends in digital marketing and ad tech.

  • November 5, 2015

Data will de-commoditize TV advertising, says Dave Morgan, CEO, Simulmedia

This week’s blog is a re-post from Oracle Data Cloud's Magazine "Data-Driven: Expert Insights on Driving Smarter Business Action,” by Dave Morgan, CEO, Simulmedia.

In 2015, Morgan also shared his insights on visual media marketing as an Oracle Data Cloud Summit panel member in, “The Convergence of TV, Video and Your Audience.”

Watch the full session at Oracle.com, also featuring thought leaders from TURNER, NBCUniversal, TrueX, and TiVo.

There is no question that data and digital approaches are going to reshape the future of the TV advertising industry.

Just look at the recent headlines Nielsen, the TV measurement company, acquired eXelate, a digital ad data management platform.

Comcast is rumored to be buying AudienceExpress, an automated TV ad-buying platform. And at an ARF event I participated in recently, CBS Chief Research Officer Dave Poltrack announced that CBS would be providing “campaign performance audits” to advertisers, using purchase data from sources like Nielsen Catalina as part of its upfront.

So it sounds as if the TV ad business is on a slippery, data-driven, audience-based digital slope headed to an inglorious commoditized future like online display, with falling CPMs, where content-driven adjacency and brands have largely been kicked to the curb, doesn’t it?

No, TV’s not going to get kicked to the curb. But let’s face it: TV advertising is already commoditized.

The majority of TV ads today are traded on the basis of sex/age demographics and gross rating points, allocated and rotated by network, day and daypart, and little else.

They are not bought and sold according to the specific spot or show. The brand of the show only matters if it appears on an exclusion list.

It’s getting worse. As audience fragmentation worsens, fewer and fewer shows are able to break through and stand out with large audiences on their own.

Already, more than two-thirds of all TV ad impressions are on episodes with national ratings under 0.5 – a metric that’s quickly moving up to 75% of all ad impressions.

So it’s getting more and more difficult for most individual shows and episodes to stand out and be valued uniquely.

Data can only make it better. No one can argue that the best way to value a TV ad spot is solely on the basis of broad sex/age and day/day-part segmentation.

More data about people viewing that episode, from previous purchase behaviors or actual sales caused by ads viewed from that episode, can only add value. More data means more markets for every spot. In a world where there is robust data on viewers and their behaviors, the notion of “non-endemic” advertising will go away.

Every spot will have certain “endemic” advertisers who may find a special connection to a show and its audience, and many other advertisers who will find lots of counterintuitive spots to buy as they match a show’s deep viewer and performance data with their own data about target customers.

Contact The Data Hotline with your digital campaign questions. (What's The Data Hotline?)

About Dave Morgan:

Morgan previously founded and ran both TACODA, Inc., an online advertising company that pioneered behavioral online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc. After the sale of TACODA, Dave served as Executive Vice President, Global Advertising Strategy, at AOL, a Time Warner Company (TWX). 

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