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As industry doomsayers continue to sound the death knell for linear TV, we talked with Graham Heap, Senior Director of Product Management at Imagine Communications, about the brand-safe staying power of traditional TV and how the worlds of linear and digital advertising are converging…

Does broadcast television have a future? Is it worth investing in television advertising?

It is certainly true that broadcast linear television channels are under threat, but I do not see it as terminal. Linear broadcasting will always remain superior at delivering live content to large audiences ― sport, news and big-event television being the most obvious examples.

But there’s no doubt that streaming services post a huge threat, and broadcasters must react ― not least by offering their own streaming services and drawing on their undisputed legacy and excellence in delivering quality content.  We see our customers as being on a journey from being “Broadcasters” to being thriving and innovative “Cross-Media Companies.”  

Our view is that by 2030, we will see 60% of a traditional broadcaster’s advertising revenue coming from digital, which includes linear streaming and VOD. Traditional linear broadcast advertising revenue will still command a 40% share, which means that broadcasters need to prepare for a future comprising a mixture of platforms, screens, advertising models and ways of watching. As part of the overall mix, well-curated broadcast linear services will not only be viable, but will be popular and required, for decades into the future at the very least.

What are the differences between the advertising markets for linear and online?

Traditional broadcast linear advertising is largely sold by fixed spot placement, by program or time of day.  For fixed spot placement, advertisers have a say on exactly where the commercials are placed, and know in advance which programs all their spots will appear in.

Advertisers also have the assurance that the broadcast sales process will curate commercial schedules to avoid conflict between brands. For instance, if you are BMW, you can be certain that your spot will not be immediately followed by a Volvo spot or inside a show that Volvo is heavily sponsoring.

Digital video advertising, on the other hand, has grown up in the computerized era, where the sales and placement of advertising is largely automated by huge ad-serving operations. Placements are by algorithm, designed solely to deliver a promised impression count and audience.

That means that even with linear streaming powered by digital ad insertion, commercial breaks and overall commercial schedules are far less structured, and when combined with low barriers to entry for advertisers, the quality invariably drops. The result is more brand clashing, less brand safety, and more annoying, repeated ads for the viewer.

This is why broadcast advertising still attracts a significant premium: the association with known content with careful curation and placement management. Alongside unparalleled reach and inherent brand safety, this is what has made television the premium advertising medium, and why television accounts for 90% of the average viewer’s video time (source: The Global TV Group). Advertising rates reflect that.

How do you quantify advertising campaigns?

In both television and digital advertising, the ultimate metric to quantify advertising campaigns is the reach and frequency for the target audience, i.e., how many of the right eyeballs watched a particular commercial, and how many times did they see it?

Today, we tend to measure that in CPM: the cost per mille (thousand) views of a commercial. That is easy for digital services to deliver, because they have an identifiable relationship between service and consumer in a one-to-one stream. But digital publishers frequently receive criticism about measurement and potential fraud on their platforms

Broadcasters quantify by building schedules to attract specific audiences, then measure retrospectively using proven ratings agencies that have ways to statistically measure how much of an audience watched a particular program. The benefits of having an independent agency doing measurement is that they can operate as a neutral third party, which removes potential mistrust between the advertiser and the publisher.

Can these two approaches be brought together?

For most broadcasters, sales for linear and online services exist in separate silos, each with its own sales operations and fulfilment systems. Some broadcasters have even outsourced online advertising to the programmatic placement specialists. They may be betting on linear television viewing tending to zero in the foreseeable future. But I do not see that happening.

At Imagine, our view is that linear and digital advertising can be managed together in a single approach. Just as the broadcaster tries to portray a single identity and brand to the consumer whether they are watching a broadcast signal or online, in a linear format or on-demand, so should there be a single value proposition to advertisers.

To achieve this, broadcasters need to tweak how they sell linear advertising. They need to journey away from the negotiations around individual spots (and the consequent tax of “making good” on displaced units) to the proposition of meeting defined numbers in defined audience demographics, whatever the platform: “Your ad will be seen by 10,000 25–35-year-old females, during and around our content, whether they are watching on linear television broadcasting, live streaming or on VoD.”

How do you approach such a convergence?

We approach this with what we call adaptive audience fulfilment. In this model, broadcasters are not selling spots in particular programs (except perhaps where genuine super-premium rates are in play – no one is going to change the Super Bowl market!), nor are they giving away their advertising inventory for others to profit from. One sales proposition — their media company brand — and one sales process, placing ads across all distribution chains to achieve the required audience.

Accomplishing this means not just refocusing their value proposition, it means making a change to the way they sell and place spots. Adaptive audience fulfilment, while maintaining the qualities that make linear television such a premium environment, requires sophisticated campaign planning, monitoring and reporting.

For many broadcasters, it will also mean adding targeted advertising to the mix. Dynamic ad insertion enables targeted advertising in streaming services, and new digital distribution platforms and ATSC 3.0 make it practical to switch out advertising in live linear broadcasts. Pan-industry initiatives like On Addressability and Project OAR (open, addressable, ready) are promoting the advantages of addressable advertising.

Is this a concept for the future, or can it be delivered today?

This can absolutely be delivered today. Powerful technology such as Imagine’s Landmark Sales platform can deliver adaptive audience fulfilment with the necessary “broadcast-quality” placements, while Imagine’s GamePlan cloud-based optimizer can take the audience commitments made and automatically deliver them in highly efficient ways to free up inventory and increase revenue opportunities.

This technology is already in use around the world. Nine Network in Australia was able to go from zero to more than a third of their inventory sold in adaptive audience fulfilment contracts, while at the same time substantially reducing its operational costs and maximizing revenues.

If broadcasters are to level the playing field between linear and digital advertising rates and maintain the premium that allows them to continue to invest in quality content, then they must take coherent control of the monetization of all their advertising inventory. Adaptive audience fulfilment is fundamental to this, helping to bridge the gap between spot-based linear and digital.

With the right technology, broadcasters will be able to demonstrate to advertisers that they are hitting their goals in a targeted, effective, brand-safe and affordable way.

September 15, 2021 - By Graham Heap
Senior Director, Product Management
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