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More Flexible TV Buying Options in 2017

More Flexible TV Buying Options in 2017

While the proliferation of digital has revolutionised the advertising industry, recent issues, including metric inaccuracies, fraud, and low-viewability rates, have dulled its shine. In part, due to this, big-name brands have announced their return to TV to take advantage of its scale and reach, and gain back control over the “who, what, when and where” of their advertising initiatives.  

As of late, the TV advertising industry has experienced a much-deserved resurgence. It’s predicted that global TV ad spend will be $202 billion this year. IPA Research also revealed TV to be the most effective advertising medium, and the best for generating top-line growth that drives profit. Companies, most notably, Proctor and Gamble, are renewing their focus on brand-building TV campaigns while tech giants like Facebook and Netflix continue to grow their TV marketing spend.

The shift of marketing budgets to digital has slowed and brands are increasingly positioning TV as a core part of a multi-channel strategy.

Demand for flexibility  

Even though some advertisers have become disillusioned with digital ad effectiveness, they’ve grown accustomed to the flexibility it offers – especially the opportunity to optimise in-flight. And while the TV industry of yore could offer no such flexibility, it can and is in some cases happening today with the help of measurement and optimisation technologies.  

Using real-time data insights on the performance of on-air spots, advertisers can make changes to days, dayparts, programmes, networks, genres and creatives to improve campaign efficiency. The technology exists to do this, but most advertisers are bound by TV buying options that mean it’s near impossible to make in-flight changes.

In 2017, we expect to see advertisers taking advantage of more flexible buying options to better optimise TV. We may also see advertisers begin to push on networks to incorporate more flexibility into their offerings.

Let’s take a look at the buying options that exist today and discuss the ones that will provide total flexibility, a little wiggle room or none at all.

Lock-in at the upfronts

The majority of TV inventory is currently sold in advance during the upfronts, annual events where networks and advertisers spend days or even weeks negotiating deals for the year ahead. Locking in advertising budgets in advance allows networks to plan their own activities and, primarily, finance pilots.

Upfronts give advertisers access to primetime inventory for the coming season, ensuring they reach large audiences during ideal dates and times. But the downside to upfronts is that they offer no flexibility to make in-flight campaign changes. Once you’re locked in, you’re locked in.

Upfronts will retain importance for the most popular TV shows where scarcity and competition ensure effectiveness but they may not continue to reign supreme as the most popular buying route for long.

Delaying decisions

The scatter market allows for ad inventory to be bought quarterly throughout the season. It currently accounts for a third of TV ad spend in the US. While inventory bought on the scatter market may be more expensive compared to upfronts, it lets advertisers reduce initial spend and make buying decisions closer to the broadcast date. Buying through scatter also allows advertisers to make some changes to dayparts and sales house properties, although this involves financial penalties.

The scatter market in the US grew to particular strength following sluggish upfronts in 2015, with Fox reporting an almost 60% rise in scatter spending for broadcast primetime and Sunday NFL games. This trend illustrates the increasing value advertisers are placing on flexibility.

The flexibility of clearance

When TV inventory isn’t sold at the upfronts or on the scatter market, it’s made available through clearance, where advertisers can bid for inventory on a weekly basis. This method provides, by far, the most flexibility, allowing advertisers to make decisions close to the broadcast date and better optimise TV campaigns.

Technological innovation increasingly enables advertisers to measure the impact of their TV ads – understanding how TV is really working for them by delivering the who, what, when, and where of campaign success. They can understand what spots are working best on what channels, what dayparts are most effective, as well as which audiences are the most engaged. Inevitably, the availability of these actionable insights is leading to an increased demand to optimise TV campaigns in-flight. This trend may see the prominence of the upfronts decline as advertisers begin to demand more flexible approaches to TV ad buying that allow them to make changes depending on what is working and what is not according to data.

Brands may be returning to the safe haven of TV but their sojourn into digital did teach them a valuable lesson in the importance of in-flight optimisation. While the upfronts won’t cease to exist any time soon, we will see growing adoption of other buying options, which provide advertisers with far more flexibility to optimise their campaigns.

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Kevin O’Reilly

Kevin O’Reilly

For over 15 years, Kevin has been helping companies navigate the path from data and analytics to insight and strategy. As CTO at TVSquared, Kevin brings his skills in coding, modeling, team building and leadership to ensure the company continues to provide the industry’s most accurate, same-day attribution technology. Previously, Kevin was the vice president of marketing sciences at TWO NIL, a media-marketing and advertising agency. While there, he led a team of senior analysts and marketing scientists to build advanced optimisation and marketing-mix models for measurable and effective TV and digital media investment strategies.

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