VIDWeek: Optimism for Advanced Ads Despite Challenges

Panelist at Programmatic TV event sees ‘inflection point’
Jonathan Steuer crop web press.jpg

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Audience-based ad buying – using data analytics, adding automated buying, targeting viewers based on attributes such as propensity to buy soon rather than age and gender – is still complicated and a relatively small percentage of total TV ad spend but is rising and might be reaching a take-off point, experts from the “buy side” of the business said on a panel Tuesday at VIDWeek.

These experts also recommend that other pros join them in continuing to advocate that agencies and advertisers move toward advanced-ad buying, however much those buyers might find the process to be outside the comfort zone of TV advertising.

“We all need to do a better job of at least trying to incrementally walk certain advertisers down that road,” Brent McGoldrick, CEO of research firm Deep Root Analytics, said on the panel during the Programmatic TV event that kicked off VIDWeek. His firm’s clients are split between consumer brands and political campaigns or organizations, he said.

McGoldrick said the 2016 president election outcome – which surprised most pollsters – pointed out to advertisers the need to re-assess how well they know their customers or potential voters, what their lives are like and what they value most.

Jonathan Steuer, chief research officer at big agency Omnicom Media Group, said that in six or seven years it’s quite possible that industry observers will see 2017 was an inflection point for advanced advertising, though buying ads based on gross ratings points (GRPs) will still be the focus for many advertisers.

Even talking about “audience based buying” means different things for different advertisers, Steuer noted. Two big Omnicom clients are McDonald’s, whose target audience is “basically anybody who eats through their mouth,” and SAP, the enterprise software firm that would love to influence perhaps 10,000 key people around the country. For McDonald’s, even ads that miss their target are still valuable; for SAP, most ads missing their mark won’t help as much.

Asked by the moderator, B&C business editor Jon Lafayette, their forecasts of how big the advanced-ad side of the business will be in two years or so, McGoldrick predicted “probably in the 3-5% range” if the education process goes well.

Steuer said 3-5% sounds reasonable in a year, adding: “I think if two to three years from now that doesn’t look more like 20 to 30 [%], there’s a real problem.”

Maribeth Papuga, executive in residence at BIA/Kelsey, noted that speakers at the Programmatic TV event were committed to making progress on audience-based buying. “What gets in the way is people’s business habits of their current quarter.” But if things keep things moving in the right direction, “I think it will be maybe 3-4% more in a few years, which is a lot.”

Brian Wallach, senior vice president and chief revenue officer, advanced TV, at ad-tech vendor FreeWheel, said use of data is on the rise and will continue to do so. More advertisers will embrace it, he said, and probably shift dollars in that direction.