The ad-supported TV industry in Canada is moving fast to provide the data-driven environment that advertisers want, including more defined audience planning and better attribution to prove the value of television buying. The stand-out message from Future TV Advertising Forum 2018 was that Canadian TV has its self-confidence back, with a better product to ‘sell’ to advertisers.
Buyer-sentiment towards TV, which was on a negative trajectory in 2015 when this event launched in Toronto, has improved. Everyone can see the progress as Canada belatedly modernises its ad-supported TV ecosystem. This coincides with growing concerns that increased digital buying may boost efficiency but does not help effectiveness, especially in the long-term and especially when it comes to brand health.
Here are some of the themes that emerged from this year’s event, with our three big take-aways at the bottom.
Theme 1: Prove it and we will buy it.
Attribution is one of the top priorities for ad-supported television in Canada – and perhaps the single biggest priority. Time and again we heard the sentiment that ‘if you prove it, we will buy it’, and this applied not only to agency/broadcaster relationships but to brand/agency relationships.
There is a pressing need for agencies to prove the value of their work – including their media plans and buying – to brands who are cost-driven and who may well use procurement officers to oversee spend. Most agencies are convinced they can do a better job if given more budget, but they need to justify extra fees by proving outcomes.
There is a sentiment in Canada that moving back towards an agency fee model, where agencies are paid primarily based on the time/talent they put onto accounts, would be desirable. Proving outcomes is therefore a cornerstone to improving overall transparency in the ecosystem.
Meanwhile, the channel owners need to prove that exposure on TV is causing good things to happen, whether that is more sales, more people visiting showrooms, more traffic to websites, improved brand sentiment or greater brand market share, etc. Attribution underpins much of the progress that can be made. Given that TV is a proven winner (and a major econometrics study presented by Ebiquity confirmed the short-term and long-term profitability of using TV), better attribution is a potential game-changer.
The good news is that TV providers are now showing direct outcomes, like sales lift, that is linked back to TV exposure. Rogers Media (the media solutions/sales arm of Rogers, one of Canada’s major BDUs (and broadband/wireless providers), Volkswagen Group Canada and the Montreal-based agency Touché presented a case study showing audience-based buying of auto-intender segments with verified vehicle sales lift tied to the TV campaign.
The science behind attribution and econometrics is advancing quickly. For a long time, digital sellers from the non-broadcast world (i.e. Google/Facebook) have benefited from the ability to demonstrate direct (albeit often short-term) outcomes from media placement. This significant advantage over TV is about to be diminished.
As the media data and analytics experts at 605 demonstrated at this Toronto event, STB viewing data is the foundation for some powerful attribution capabilities. The company flagged is work with Walmart in America (see this story) to enable ongoing analysis of brand sentiment, focused on ‘persuadable shoppers’. There were campaign optimisations to find this segment more effectively on linear schedules and focus on the most successful creatives, with evidence of outcomes.
That impressive body of work was possible using a large population of STB devices for viewing data – totalling 10% of all U.S. households. One of the important messages for the Canadian market is that you do not need 100%, or 50% or even 25% of homes providing STB data to deliver some comprehensive attribution on brand health as well as sales impact.
Theme 2: TV as a platform
There was a view in Toronto that TV needs to become more like Google in the sense that Google (and indeed Facebook) present themselves as a platform/ecosystem that delivers a good deal of scale from one buy. The call for ‘TV as a platform’ was led by Noah Levine, SVP, Advertising Data and Technology at Fox Networks Group, whose company is one of the founding members of OpenAP, the U.S. initiative that provides audience-based buying at scale across the inventory of multiple broadcaster groups who use the same commonly-defined audience segments so there is complete consistency for advertisers that want to find first-time home buyers or car lease expirees or travel enthusiasts or luxury shoppers, etc. via standard linear TV.
Levine argued that broadcasters should stop trying to differentiate themselves with proprietary data-sets that nobody else has. He flagged the need for combined scale, especially when selling smaller (niche) audience segments.
It emerged at this event that there is meaningful support for a Canadian version of OpenAP, and three major channel owner groups (Corus, the public broadcaster CBC and Blue Ant Media) revealed publicly that they would back such an initiative.
OpenAP is one of the most important collaborations in TV advertising worldwide. Another important initiative globally comes from Finecast (backed/owned by GroupM), which is trying to create a single unified buy for all addressable TV inventory that resides on television screens (via broadcast or connected TV and covering both linear and on-demand).
You can see how, if an advertiser/agency could cover a decent proportion of their audience-based linear TV planning and buying (and reporting) through a single platform, and a decent chunk of their addressable TV buying through a single platform, life becomes noticeably easier. One of the biggest challenges for advanced TV advertising everywhere is to remove complexity from the planning and buying process, so that it can be normalised.
Initiatives like OpenAP and Finecast (accepting that Finecast is focused on helping GroupM agencies today) do demonstrate how TV can become something of a ‘platform’ buy rather than a succession of individual broadcaster/BDU sales house buys.
Finecast was in Toronto, as was Sky from the UK, which provides its own example of collaboration and unified buying, planning and reporting in the addressable space, thanks to its far-sighted decision to partner with its No.1 Pay TV rival, Virgin Media, and make the Sky AdSmart addressable system available in Virgin households as well as Sky homes. See story here.
Theme 3: Addressable advertising remains elusive
Addressable advertising on BDU (Pay TV) systems remains elusive in Canada. At the debut 2015 Toronto event, addressable formed a large part of the debate but the difficulty establishing the business case for BDUs, and in establishing multi-BDU commitments to deliver combined scale, and the lack of dynamic advertising insertion technology in set-top boxes, has limited progress.
There is growing optimism that the technology nut can be cracked, at least, especially as the Canadian BDU market splits between operators using the X1 set-top box platform (licensed from Comcast) and the MediaKind (formerly Ericsson Media Solutions) MediaFirst/Mediaroom platform. That consolidated vendor landscape for the STB/user experience/service delivery functions will make it easier to get the STB population upgraded.
There is good news from Canada for other markets where it is hard to get Pay TV operator or free-to-air addressable TV moving. This market is demonstrating (as Australia is) that you can dramatically improve the television advertising ‘product’ even without addressable if you focus ruthlessly on improving your understanding of data, covering audiences and outcomes. There is much to be gained in linear planning/buying alone.
It is increasingly clear, globally, that addressable TV (including household-level addressable TV advertising) is part of a continuum anyway – one that will include classic linear spot buying, audience-based linear buying and addressable. Addressable is one part of a fast-growing toolbox.
Thus, an advertiser could run a mass-awareness linear campaign, focus on some key audience segments with audience-based linear buying (still at large scale) and then use addressable to get in front of hard-to-reach consumers, achieving incremental reach in a cost-effective manner via TV (once the cost-of-additional-reach curve starts to become unfavourable on standard TV).
Canada, like Europe, does not benefit from the inventory share that U.S. MVPDs get, and which drove the business model there as operators used addressable advertising on their share of the ad breaks. It was pointed out in Toronto (by Jeff Eales, Director of Systems and Development at Sky) that one of the business justifications for addressable is the ability to target the right content and package promotions to the right customers.
Theme 4: Be more like Google
The sentiment was expressed more than once that TV needs to be more like Google. This means, as Noah Levine at Fox noted, treating TV as something closer to a unified platform than a collection of isolated audience pots.
There were separate calls for TV to demonstrate business outcomes like brand lift and sales lift, rather than only demonstrate media outcomes like reach and frequency. Marketers believe this is what Google provides.
Some in TV will argue that Google (and Facebook, and much other digital) outcomes are short-term in nature but that is not the point. Marketers feel they are getting outcomes from Google, and they like it. The ability to deliver outcomes takes us back to attribution (Theme 1) and econometrics.
There were also suggestions that TV needs to more of a solutions partner than a media seller. This can apply to agencies (who are looking for ways to move up the value chain) as well as to broadcasters and BDUs. An obvious example is using advertiser data to create custom audience segments that TV can then target, whether as an audience-based linear buy or an addressable buy. That, however, requires buy-in from the brands who need to share their own data and insights. This is happening in leading markets (e.g. the U.S. and UK) and is now starting to happen in Canada – with a couple of FTVA case studies proving the point.
Theme 5: Industry collaboration
Collaboration was not an explicit theme of Future TV Advertising Forum Canada, but it underpins the best examples of progress in the market. Audience-based buying uses advertiser data to determine the audience targets that are needed, combined with BDU data to understand the homes where you find the target consumers and what they watch, combined with outcomes data from an advertiser (like website traffic that can be linked to TV exposures).
Historically, the Canadian market has been a hard place to get everyone working together as there are so many powerful, competing vertically integrated companies who are fighting big battles around broadband and wireless. Nevertheless, progress is being made on this front. Think TV Canada is a unifying force and there are media companies who are willing to lead and bring others with them.
On a separate level, it is the collaboration between Numeris (the Canadian audience ratings service), Kantar Media and comScore that is making the next-generation, total TV (multiscreen) audience measurement system, VAM, possible (VAM stands for Video Audience Measurement). As we heard last week, the beta trials for the new measurement system start in Ontario next April and in Quebec next July. Few companies (if any) can do everything on their own today; this is another example of the need for expanding ecosystems and new partnerships.
Some collaboration in Canada is being forced upon the industry from above: the regulator, the CRTC, has demanded the creation of a shared STB audience measurement system. This is due to be ready next year, giving channel owners access to STB viewing data, though the exact output from the project is either a tightly guarded secret or still a work-in-progress. This remains (to the best of our knowledge) the only attempt anywhere to regulate a shared STB audience measurement system.
This, along with addressable TV advertising, was a key focus for discussion at the first-ever Future TV Advertising Forum Canada, in 2015. As with addressable, it has been somewhat overtaken as a topic of conversation but could make an important contribution to the health of ad-supported TV in Canada moving forwards.
Our three big take-aways from FTVA Canada 2018
In conclusion, here are the three biggest learnings that we brought away from Future TV Advertising Forum Canada:
No.1. The Canadian TV industry has rediscovered its mojo and is aggressively modernising, led by some pioneers and determined leaders. The progress over the last 18 months is quite dramatic. The TV industry is more united. Canada is starting to close what was a worrying gap between its own data-driven capabilities and those found at the leading media houses in Europe and the U.S. The provision of audience-based buying, now proven in-the-field with some impressive results, is a major advance.
No.2. Closely related to No.1, the mood is more positive and not just from the supply-side. Marketers, in private conversations and on stage, are talking more positively about TV than they were three years ago. There are television fans at brands who are increasingly imposing their views and that is being made easier for them now TV is presenting a more united front and providing more evidence (thanks in no small measure to the work of Think TV Canada).
No.3. There is increasing potential for some very meaningful collaboration between the broadcast groups, like a Canadian version of OpenAP. The U.S. initiative (OpenAP) brings Fox, Turner, Viacom, NBCU and Univision together and is the embodiment of broadcast industry collaboration. It is a big step on the road to where TV needs to be as an advertising ‘product’. Canadian OpenAP would be a potential game-changer, we think, in the battle with digital, especially if you have this plus a meaningful attempt to unify, simplify and ultimately normalise addressable TV buying.