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Data’s Here to Save the Wheel, Not Stop It

9/12/2016 8:00 AM Eastern

Inside ad tech, we place enormous value on disruption. To digital people, it’s shorthand for systemic innovations that will revolutionize any industry. But to those on the receiving end, it’s often seen as code for decimation.

 

That’s the current line of demarcation between ad tech’s disruptors and television’s old guard. Traditional television, which has profited tremendously to date, sees any change as a threat. On the other side, digital companies see an online ecosystem where data is the essential ingredient to delivering audience, and wonder how long their counterparts inside the television bubble can ignore the inevitability of innovation.

 

Bridging this divide isn’t easy, and at times digital companies approach television with naiveté, assuming their way is better and that traditionalists would be fools not to adapt. Call it arrogance, if you like. Some ad tech companies believe that better technology, better data, faster transactions and automation are the panacea for all issues, including those surrounding television. But what that mindset fails to account for is the fact that the $75 billion TV industry was built over the course of 60 years, via disparate systems that are held together by imperfect, but accepted practices that have served them well. In other words, television represents a massive achievement that’s gotten right more than it has gotten wrong, even if there are obvious places for improvement.

 

Currently, we’re at an impasse. Now that cord-cutting has shown some real damage in subscriber losses and digital advertising is creeping into TV ad budgets, media companies are recognizing the need to shift to an audience-based strategy. But when the audience you’re reaching is watching on linear TV, mobile apps, OTT apps, MVPD video-on-demand and browsers, how do you offer a cohesive audience to your clients?

 

To date, wary television companies have tried to solve that challenge on their own terms by building walls around their audiences that cordon off content on any device, whether it be a television, computer, phone or tablet. Stitching audiences together looks like a solution, but once those audiences have been on-boarded, off-boarded and ID-mapped, they still exist in silos. That should give advertisers pause, because they’re being asked to rely solely on an audience created inside a seller’s black box.

 

In the short run, advertisers might gamble on those siloed audiences because they want their brands associated with TV’s premium content. But soon enough, two forces will conspire to knock down television’s walls. First, younger audiences will reject television’s outdated rules. The millennials who are buying houses and starting families right now have no concept of appointment television and think a “lead-in” is the next suggested video on YouTube. Second, advertisers that went along with the black box will eventually demand the transparency of digital media.

 

For years, TV has transacted billions of dollars on limited options for audiences based on small panels of viewers. Now that programming is spreading across many screens and distributors, and that ad tech has promised marketers precision in targeting, traditional TV is feeling the weight of this force from all sides.

 

The truth is, digital isn’t here to stop television; it’s here to save it. Consumers want more binge-worthy shows, and if that business is going to be sustainable over the long haul, digital media experts need to partner with TV veterans to create the common data language that’s a necessary prerequisite for monetization in the 21st century.

 

Ryan Reed is director of TV solutions at Lotame, a New York-based data management company.

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