BIA/Kelsey: New Directions Of Advanced TV

In a new report, BIA/Kelsey shares views from top executives at some of the leading Advanced TV companies to get a sense of the progress that’s been made to date and of how new directions are evolving.

BIA/Kelsey’s updated (July 2017) local video forecast shows that linear TV and digital video platforms will grow from $31.9 billion in 2017 to $37.3 billion by 2021. Linear television (broadcast TV and MVPD) will account for 82% of overall local video spend. Linear TV will account for just over half (54%) of this growth. Broadcast TV will grow $2.7 billion and Cable/MVPD will grow by $200 million. That means almost half of the growth in local video ad spend will go to digital platforms including local mobile video, local online video, and out-of-home video spending.

According to BIA/Kelsey, “Advanced TV has tech stacks and business processes that evolved separately to serve the needs, characteristics, and capabilities of the linear TV (e.g., broadcast and MVPD) and digital video (e.g., OTT, AVOD). As marketers and agencies want more cross-platform campaign planning, activation and evaluation, these stacks and business processes must work better together. Capital investment, innovation and change is coming to the local TV marketplace and trading in data-driven audience targeting, or Advanced TV, solutions.”

Until a few years ago, Advanced TV was defined primarily by two forms of activity that involved linear TV commercials:

• Interactive TV applications appearing over portions of TV commercials or TV content in which TV viewers were offered the option of clicking on a banner for additional free content or product samples, or registering a vote for their favorite in a TV poll.
• Addressably-delivered TV advertising, in which a commercial is delivered to a pre-designated, targeted household — when the TV set is on — unbeknownst to the viewer of the TV program.

Advanced TV — now comprising data-enhanced audience targeting via addressable, contextual audience networks, OTT, connected TV and programmatic TV platforms — continues to innovate, and bring change in the national and local TV markets through technology, data, and new forms of automation and efficiency, the report says. The key components of Advanced TV include platforms, workflow, and data.

The major platforms involved in the Advanced TV space (addressable, programmatic and contextual audience networks) are the players currently operating as advertising platforms in the national TV and/or local TV ad markets.

One of the report authors, Rick Ducey, report author and managing director, BIA/Kelsey, said: “Advanced TV has tech stacks and business processes that evolved separately to serve the needs, characteristics, and capabilities of the linear TV (e.g., broadcast and MVPD) and digital video (e.g., OTT, AVOD). As marketers and agencies want more cross-platform campaign planning, activation and evaluation, these stacks and business processes must work better together. Capital investment, innovation and change is coming to the local TV marketplace and trading in data-driven audience targeting, or Advanced TV, solutions. These are the important topics we are analyzing in this latest installment of reports on advanced TV.”

Some of the highlights of the company responses:

Sinclair Broadcast Group argues that, “Local television faces an impediment of being very difficult to buy versus other (often inferior) media options. We need to become easier to buy. Local TV systems and buying protocols were designed for simple local sales around single stations – the ecosystem has evolved far beyond the traditional spot based, single station sales paradigm, as consolidation has spawned larger broadcast groups. Furthermore, the ATSC 3.0 landscape will spur added complexity and opportunity that will need its own automation.”

TiVo looks to data evolution. “The industry is evolving; from using data sets just for planning to now executing TV campaigns against them to great success. Furthermore, the data is now used more frequently to measure business outcomes from TV campaigns. It’s becoming foundational throughout the end-end workflow of advanced TV, as well as creating a strong connectivity for targeting across screens.”

AudienceExpress finds that Advanced TV is often a “managed service” or largely manual service, even though it benefits from more automated workflows.

Discovery Engage uses two types of data: Off-the-Shelf and Custom. “With “off the shelf” data, the data segments are readily available and can be created on demand through an advertiser’s preferred Boolean logic. “Custom” data is data ingested from outside sources as requested from advertiser or agency. This class of data consists of first party data or advertiser CRM data segments, digital/DMP segments, mobile ID data (location-based) and or Agency custom proprietary data sets.”

FreeWheel sees a market where, “Workflow is fragmented across the screens. Steps being taken to make the process more holistic. The silos and technology stacks that exist between linear TV and digital video means that we have some time to go before we can fully operationalize, execute, and optimize single buys across all video environments.”

Tremor Video “lives in the OTT world.” [Editor’s note: On Sept. 26 Tremor Video renamed itself Telaria.] “Compared with traditional, digital video advertising, Over-the-Top (OTT) lacks formalized industry wide standards to support mobile video buying and selling. However, with that said, enhanced targeting is being introduced by progressive DMPs and the adoption by an increasing number of brands, based on the wave of consumption is growing in advance of more formal and traditional measurement.”