How TV Stations Can Mine Digital Media

Last weekend, which also was the start of the 2016 Summer Olympics, we visited friends at their lake house in Wisconsin. What struck me while we were there was their use of digital media to view the games.

It’s a second home; they don’t have an antenna or cable service. Instead they streamed the NBC app to their giant flat screen TV and took advantage of various other feeds for their smart phones and table devices. There’s no question that digital media is an important part of the revenue picture for the Rio events. 

The national elections are also seeing a greater focus on digital. At the beginning of the presidential campaign, Borrell Associates forecast that 9.5% of political media budgets, a six-fold increase to as much as $1 billion more than in 2012, could go to digital media offerings.

Of course “digital” refers to more than media platforms. Marketers are looking to use digital tools for every aspect of their buys. Rick Ducey, managing director at BIA/Kelsey recently observed, “The programmatic genie is out of the bottle. That said, it took a while to reach critical mass in national TV, and we expect the same in local.”

How TV stations can monetize the digital media opportunities available to them was a major focus of our Media Finance Focus 2016 conference. Held this past May in Denver, the annual conference for MFM and our BCCA subsidiary, the media industry’s credit association, explored the challenges stations face as they seek to ensure a competitive foothold in the “omniplatform” media world.

I’d like to share what I found to be some of the most compelling takeaways from those sessions:

Think LEAN

TV stations looking to market their digital audiences to advertisers must address common challenges faced by the digital media community. Chief among them are ad fraud and ad blocking. A study conducted by Ernst & Young for the Interactive Advertising Bureau estimates the total cost of a supply chain corrupted by bot traffic exceeded $8.2 billion last year.

Latency issues, which result in part from the time required to serve up targeted ads on a web page, are cited as a major reason for consumers who download ad-blocking software. And for smartphone users with data plans, latency isn’t just annoying, it’s costly.

Scott Cunningham, IAB’s senior vice president of technology and operations, outlined his organization’s efforts to help its members address the ad-blocking threat. They include the so-called “LEAN Ads Program,” an acronym that encourages publishers to adopt practices that meet consumer demand for:

• L: Light — Limited file size with strict data call guidelines.

• E: Encrypted — Assure user security with https/SSL compliant ads.

• A: Ad Choices Support — All ads should support DAA’s (Digital Advertising Alliance’s) consumer privacy programs.

• N: Non-invasive/Non-disruptive — Ads that supplement the user experience and don’t disrupt it. This includes covering content and sound enabled by default.

It’s a two-way street as Cunningham explained: “Publishers have the right to tell the ad blocker to go away, but they also need to reward consumers who are asked to opt out of ad-blocking by providing them with a better experience.”

Look Beyond Banner Ads

Scott Stansfield, CEO of Centriply, a media buyer specializing in targeted TV placements, discussed how broadcast TV’s adoption of the ATSC 3.0 standard will thrust stations into the digital mix in a much more meaningful way.

“TV has always been regarded as the medium of choice for reaching a national or DMA footprint with content that delivers huge audiences,” Stansfield said. “With the 3.0’s ability to support geo-targeting and interactive ad messaging, it will allow TV stations to get a premium for ads they sell on programmatic platforms.”

A station’s online digital assets also provide TV stations and other media companies with a variety of different revenue opportunities. Alex Beller, director of business development for StackCommerce, a platform specializing in native content, pointed out that “e-commerce is one of the ways your company can look for new money without cannibalizing existing revenue streams.”

One of the types of e-commerce Beller described is known as affiliate commerce, where a publisher site writes about a product and then gets a commission when one of its users clicks through to Amazon.com and purchases it. “But in order to get a bigger piece of the pie, publishers need to look into native commerce opportunities,” he said. In this scenario, the publisher provides both the native content and the fulfillment aspects of the sale, which can be outsourced to a third party.

Regardless of how revenue is made on the web, it’s important to conduct yield management analyses. “Knowing the real value of your content isn’t accomplished by analyzing page views, which can vary by as much as 262% in a single day,” warned Nic Paul, head of automatic yield for the content delivery platform Outbrain. Instead, yield-management analyses will allow advertisers to “dynamically place bids based upon a guaranteed ROI.”

Optimize Social Media Opportunities

Apryl Pilolli, social media manager for Cox Media Group, cautioned conference attendees against thinking about social media platforms as vehicles for tune-in promotions. “Facebook’s algorithms can be used for driving viewers to content with messages like what a person is watching right now or ‘Did you see that?’ But it doesn’t work if you simply use it to say, ‘Watch us,’” she explained.

For this reason, Jeremy Kagan, CEO of Pricing Engine, a company that helps advertisers optimize their digital ad spending, says it’s important “to use snack-size videos like sports highlights clips that are served up to audiences on Facebook Live and Periscope.”

Misty Montano, digital content manager for Tegna’s KUSA Denver, stressed the importance of matching these “snack-ables” to the news stories that are trending on a social media site. “You have to know what Facebook and Twitter are doing in order to post the content that will get a higher reach,” she said. Montano also noted that station talent who post messages about what they’re doing on sites like Snapchat can increase traffic for their videos on Twitter and Facebook.

Using social media to promote “tune-in” viewing has been the most effective when there’s a breaking news story on the station’s website or other forms of live programming, according to Montano. Cox Media’s Pilolli said her company uses social to drive digital (and sometimes TV) viewers to digital sites, such as a station’s “after the game” live chats with athletes.

“The goal isn’t to make your inventory more valuable; it’s to make it easier to monetize,” said Centriply’s Stansfield. “Digital sites are where you’re going to find the 18-34 year-old males who have disappeared from TV demos.”

With social media playing such an important role in inventory monetization, it’s no surprise that Comcast/NBC Universal looked to the company with deep experience in the medium, Buzzfeed, to oversee social media in Rio.

Stay Current

As the daily news stories on TVNewsCheck and its sister publication NetNewsCheck demonstrate, the digital media landscape continues to change in dramatic ways. Who could have foreseen that AOL and Yahoo would wind up as part of the audience delivery platform of a former RBOC (regional Bell operating company)?

This is why so many of the programs and services offered by MFM and BCCA are created with a focus on providing education to help participants improve the financial outlook for their stations. If you were unable to attend our annual conference, you can read more about this year’s sessions in the current issue of our membership magazine, The Financial Manager (TFM), which can be viewed by non-members on our website for a limited time.

We will also be exploring digital advertising trends at Media Outlook 2017, a half-day seminar to be held in New York on Sept. 14. And, as always, I hope you’ll share your thoughts and questions by commenting here or emailing me. Like those from the members of MFM’s TV committee, your recommendations help us shape the topics we’ll address in our upcoming webinars and other educational programs.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.