According to Nielsen, prime-time ratings for all cable networks declined by 27% since 2016. We know why. Linear TV has taken a back seat to the new consumption of content on a variety of devices and set top boxes. It’s been difficult to track viewership and, therefore, to feed commercials to this audience.
You can’t just buy more GRPs because with ratings down, there just isn’t enough supply to match the growing demand. And even if you can get the points you need, the rising costs of buying TV this way may destroy your advertising’s ROI.
Consider the current state of TV ad buying. Supply is down because ratings are down. Your post analysis is down to 70 or 80 percent because your viewers have left. They’re consuming content in other ways. And while ratings are down, CPMs are up. That’s pretty much the opposite of where we ought to be.
For example, Viacom just went through a year of 15% – 20% ratings decline across their Linear portfolio. That’s forced a shift in dollars towards their newly acquired audience-based platform Pluto TV because they need additional rating points to deliver their original scale.
So, we have to find that disappearing audience and hedge against the artificial rate increases on the linear side. How?
Technology to the rescue
The advertising industry has begun solving this problem by going directly and digitally to that lost audience. Now that much of TV advertising has moved from feeding an analog signal to households and depending on them to manually report what they watch, their digital viewing habits can now be tracked, measured, and bought.
Programming delivered through set-top boxes leverages audience data by transforming how viewers engage with content and therefore how advertising is transacted. Advertisers can now reach the right audiences using something more targeted than just age and gender. This is a much more cost-effective means of buying. Finally, you no longer have to throw ad dollars at a broad pool of people, many with no interest in your products. All in the name of age, gender, and geography.
The media buyer is now having a different conversation with the networks. They’re saying, tell me how to get to this audience and how you’ll deliver the same amount of impressions that you would have delivered last year, but let me do it this year by buying a total audience. I’ll allow you flexibility across your various content to bring me that audience regardless of program.
The networks prefer to deliver on this audience-based request rather than to provide a guarantee against a specific unit. They will take the same amount of money traditionally spent to buy specific shows and use it to deliver the reach and frequency with the specific audience demanded by the advertiser.
Audience-based buying is a different animal
You can still have your traditional linear budget, but a portion of your budget airs across the OTT platform and across all of the network’s offerings. This delivers advertising back to the people that traditional TV has lost. Additional KPIs and other buying parameters can be added to OTT-type buying that are important to buyers and that they could never get through traditional linear buying.
Be aware that the CPM is higher with some networks the more targeted you buy. But if you do open it up and do a portfolio play to allow the network to air across all programs (their entire portfolio of video offerings) that creates greater efficiencies for you. That flexibility can, in certain cases, lower the cost of your CPM and create a hedge against the problems of traditional linear buying.
One often unforeseen effect of audience-based TV buying is the reduced control the advertiser has on the type of programming in which their ad is seen.
Advertisers having historically restricted the programming over which their ads air from certain violence, alcohol consumption, sex, etc., may want to rethink those restrictions. They may be hindering their advertising’s performance. In the audience-based buying world, advertisers can black-list shows to a degree but if it’s more than two or three, they are limiting the buy’s performance by cherry-picking content that they believe is more aligned to their corporate values.
When you buy an audience, those prospective customers of your product may be watching shows that you previously missed. In this new world of hyper-targeting the people most likely to buy your product or service, you may need to rethink your strategy and in the process, modernize your methods for bringing previously unfound people into your brand. They may be hiding, but you now have the means to find them.