In this story:
- “Granularity of data means that TV can serve not just the top of the marketing funnel but it can serve every level of the marketing funnel.” Irwin Gotlieb, Chairman, GroupM Global
- TV can “absolutely” be more effective than other media like direct marketing when catering for lower-funnel marketing needs
- Marketers must not neglect ‘top-of-funnel’ marketing (to create mass awareness) when they start using television to target – but that does not mean some of the TV budget assigned to mass-awareness will not move to addressability
- The industry has a lot of learning to do in how it optimizes mass awareness versus more targeted television marketing
- Trade support takes three-quarters of the total marketing budget and some of this could be redirected into addressable TV advertising
- “If we have the ability to continue to deliver top-of-the-funnel awareness as well as delivering better addressability, there is no reason why budgets could not come from other places – including direct marking and trade shows.” – Jodie Stranger, President Global Network Clients, EMEA, Publicis Media
- A fast moving consumer goods (FMCG) manufacturer could find value in addressable – like selling ice creams to a coastal town on a hot day – Richard Brooke, Media & Strategy Director, Europe, Unilever
- Ad buyers need a better understanding of the impact of top-of-funnel television spend to make this TV spending more defensible – Keith Moor, Chief Marketing Officer, Santander UK
- Digital is fantastic [as an advertising medium] but has become increasingly complex. “It would be great if we do not create that complexity in the new world of addressable TV – Jakob Nielsen, Managing Director, Digital, GroupM.
Television has been extremely effective at delivering broad awareness for advertisers but we should not think that its role as awareness creator is totally safe. According to Irwin Gotlieb, Chairman of GroupM Global: “TV feeds the top of the marketing funnel and it does that extraordinarily well but we live in the real world where nobody’s position is safe and everyone could be subject to disruption by the next sexy idea that someone dreams up in their garage. MySpace thought they were safe until Facebook came along. That could happen to television – it could happen to any of us.”
With this in mind, the message from GroupM, delivered with uncompromising clarity at Future TV Advertising Forum last month, was that media owners need to get on with the innovations media buyers want – and especially addressable TV advertising. As we reported elsewhere, Gotlieb made it plain that he wants the television industry to get over its internal rivalries and create the cooperative ecosystem that will bring household-level addressable TV advertising [via set-top boxes on ‘traditional’ infrastructure like cable and satellite] to multiple markets. He views addressability as a huge opportunity for television to make itself even more useful.
“Granularity of data means that TV can serve not just the top of the marketing funnel but it can serve every level of the marketing funnel. We can identify consideration and preference and states in the transaction process and we can activate against those.” He added that TV could “absolutely” be more effective than other media like direct marketing when catering for lower-funnel marketing needs. Television could even drive purchases directly. “With second screen devices you can start to interact with the commercial. You [advertisers] can make special offers through the commercial and execute the transaction through the commercial.”
This does require that you optimize the creative to the task in hand. “What is the point of slicing and dicing the audience if everyone sees the same message even when they are in different stages of consideration or preference or transaction?” Gotlieb asked. “You have to speak to them in the appropriate voice.”
The GroupM Chairman made it clear that marketers must not neglect ‘top-of-funnel’ marketing (to create mass awareness) when they start using television to target. “If you forget about the top of the funnel then nothing falls through to the middle of the funnel anymore. I have seen lots of very sophisticated advertisers over-focus on things like ROI [Return on Investment] and micro-targeting and yes, their ROI improves but they have a smaller business next year. They come to market with a smaller budget and then the business spirals downwards.”
So does it follow that any marketer that wants to use addressable advertising on TV should maintain their budget at the top of the funnel and not compromise it? Not necessarily. Gotlieb says the industry has a lot of learning to do in how you optimize mass awareness versus more targeted television marketing.
“If you are a prestige car manufacturer like Mercedes and the first time someone sees your ad is when they are 40-years-old and they can finally afford one of their cars, it is too late. You need to create aspiration in the 12-year-old; there is a long-term effect. If you are a toothpaste and do not have long-term awareness people may not trust you.”
But there are other categories where this long-term awareness is less important, Gotlieb noted, pointing to movies where there is a window of opportunity measured in weeks, so potentially a different approach could be applied to how you allocate money across the different levels of the marketing funnel. He would not rule out the possibility that some television budget could therefore shift from the top of the funnel to addressability.
“How you allocate money across the levels of the funnel will be a function of the brand or category, the brand position in that category and the life stage of the product, and that is just skimming the surface [in terms of listing the factors that could influence where in the funnel the budget is allocated]. My instinct is that some of the top-of-the-funnel budget is going to go away, but when you add everything up across addressability and broad targeting, it [advertising budget allocated to television] is going to grow substantially.”
Gotlieb thinks there is plenty of new money that could come to TV thanks to addressability and it does not even have to come from other media. He says trade support [which includes retail price promotions and store displays among many other things] takes three-quarters of the total marketing budget and some of this could be redirected into addressable TV advertising. He thinks the likely decline in bricks-and-mortar retailing could play into the hands of addressable television as trade support becomes less important [there is no need for an in-store presence if you only sell online, including via subscriptions – like some of the new nappy delivery services, for example].
“If someone cannot see your product physically on a shelf, where do you, as a manufacturer, expose the consumer to your product? You do it through paid media. That would be through targeted TV and broad [awareness] TV.”
Speaking later at Future TV Advertising Forum, Jodie Stranger, President Global Network Clients, EMEA, at Publicis Media agreed that television has an opportunity to attract budget from other sources with addressable, and could therefore see increased overall spend. “If we have the ability to continue to deliver top-of-the-funnel awareness as well as delivering better addressability, and drive precision at scale, there is no reason why budgets could not come from other places – direct marking, trade shows or wherever it may be.”
She confirmed: “Overall TV budget could increase.”
At the same London conference, Jakob Nielsen, Managing Director, Digital at GroupM, echoed the view that you need to keep investing in mass-market advertising even if targeting is available on television. “The ‘top-of-the-funnel’ is immensely important for building brands and if you do not use it you will have a smaller brand in the future. But now we have the opportunity go down the funnel and [television] can take money from other media and also from the warehouses that only sell products online,” he explained.
Richard Brooke, Media & Strategy Director for Europe at Unilever, said there is some value in addressable TV advertising even for a fast moving consumer goods (FMCG) manufacturer. “If you make ice cream you can use addressable to hit coastal towns on a hot day,” he offered as an example. He is enthusiastic about the idea that television could perform a role for different brands and products across more of the marketing funnel.
Brooke believes addressable TV can bring first time advertisers into television including local businesses like a car dealership or dance centre. But he is adamant that national brands cannot compromise on their mass-reach brand building.
For him, there is no such thing as waste in television advertising. The Unilever brand ‘Dove’ (beauty, personal hygiene, etc.) used to be aimed at women until a Dove range was launched for men, by which point everyone, including men, knew the brand values. “People who are not consuming your product today are tomorrow’s consumers,” he declared. “Broadcast wastage does not exist and if you are buying 16-34 [age] women you are not paying for the 16-34 men anyway.”
Keith Moor, Chief Marketing Officer at Santander UK (the bank) provided an example of how addressable TV advertising brought new money – his money – into TV. His company runs national ad campaigns aimed at everyone but also worked with Sky in the UK (using the Sky AdSmart addressable TV platform) to target business banking customers via broadcast TV. The campaign was a success but Moor warned the London audience against the danger of over-targeting, which he said would lead to your business getting smaller and smaller.
Moor thinks one of the main benefits of addressable will be the data it provides to prove that your advertising is working. That, he believes, has implications for the entire television market. “This is a bigger debate than the intra-fighting between top-of-the-funnel or addressable marketing; it is more about the defensibility of the marketing budget and how you define those budgets with the CFO and CEO. With addressability the data is better and that makes it a bit easier to defend television spending.”
Indeed, one of the great attributes of addressable TV advertising, according to its champions, is attribution and the way it helps to illustrate return on investment. But does that then endanger top-of-funnel spend? Is there a danger for any marketing manager that if they prove that addressable advertising works and delivers new sales in the short-term, a new CEO could arrive at a company and, under pressure from his or her shareholders to deliver immediate results, pressures the Chief Marketing Officer to focus on addressable TV at the expense of their mass awareness campaigns, ignoring any pleas that you cannot neglect the top of the funnel?
“That is a very real risk so clients [advertising buyers] need to push for a better understanding of the impact of the top-of-funnel television spend,” Moor declares. “Clients need to work with, and push, agencies and media owners to try to find a way of making [top of funnel] TV more defensible.” Moore agreed that brands need more help proving the value of long-term big brand building.
Jodie Stranger at Publicis Media also sees addressable advertising technology as a way to improve measurement and accountability. It is also a way to segment audiences better and target more effectively but the segments can still be broad and mainstream. “Addressable TV is not necessarily about targeting Martha who lives in Fulham [London], has two kids and drives a red car. It could be as broad as targeting pet owners.”
For this reason, she sees a role for addressable among FMCG brands, although the testing ground today is often financial services and automotive. Addressable is an opportunity for television, she told Future TV Advertising Forum.
Jakob Nielsen at GroupM thinks we are a very long way from targeting Martha in Fulham with her red car. “Maybe one day, but we have to be careful not to start thinking about digital targeting criteria in the TV world. Today we are talking about household-level [targeting] and not a person. A good starting point is targeting by postcode.”
Nielsen acknowledged that TV still delivers what buyers need but agencies like GroupM have to work harder to make it work. There are costs associated with the additional effort. He observed that the digital [advertising] world is “fantastic” but has become increasingly complex with its various demand-side platforms and supply-side platforms and other technology. “It would be great if we do not create that complexity in the new world of addressable TV.
“It would be great if we can work together to build platforms and data sets that work with each other so we do not have to compare apples with bananas when we are buying audiences from different broadcasters,” he continued. “That makes it very, very complex. If we [the industry] make addressable TV very complex, we [GroupM] will try to get into it quickly but our clients may decide that they do not understand it.”
Photo: Leading advertising buyers (from the right, Jakob Nielsen, Richard Brooke, Jodie Stranger and Keith Moor) speaking at Future TV Advertising Forum last month.