Last year, Cirque du Soleil simultaneously produced 20 different shows that were staged around the world, seen by more than 10 million people. To ensure these productions are profitable, the company started using logistics software from SAP, centralizing business management from their headquarters in Montreal.
Today, TV media companies are also grappling with how to manage the logistics of their business. TV content is beginning to be distributed across OTT, VOD, mobile, and social. Advertisers want a piece of each of these channels, and are interested in targeted audiences and addressable content placements that break down standard GRP pricing. Many media companies are creating new channels and subdivisions and are partnering with new vendors in order to keep up. These actions, while they have good intentions, can backfire if they are not coordinated across process, technology and strategy. Media companies must follow several broad strategic principles to ensure their long-term success across new channels.
Centralize Control Over Your Assets
Media companies should start with a centralized audience and product strategy. Earlier this year, NBCU announced Audience Symphony, to stitch together the different flavors of audience targeted advertising that they have created across their various advanced TV content distribution channels. This is the right move. Media companies who are not as far ahead as NBCU should do what they can to start out with a centralized approach. Without centralization, new channels are not as scalable, and it is harder to gain cross-channel insights.
Centralizing an audience and the products sold against it gives media companies control over ad sales, an understanding of frequency and better insights for the entire business (such as which channels deliver the most value or have the highest engagement.) This starts with buy-in of a single strategy, and a champion that can rein in rogue experiments that don’t add scalable value. This is why many companies, Comcast and Charter included, have installed veterans of targeted TV at the helm of their ad revenue businesses.
A centralized strategy also requires technology that can knit together disparate forms of data. Some DMPs like Lotame are starting to manage TV data as well as digital data. However, media companies must also be on the lookout for new forms of data management that might fit better with advanced TV advertising, which includes audiences, channels, formats, metrics, pricing and other important elements. Recently, for example, retail companies have started to use something called a “CDP” or “consumer data platform”, which focuses on building rich profiles of individuals with first party data, rather than cookies.
Be Easy to Work With
Consumers are not the only ones that have gotten used to convenience through technology. While linear TV media companies have a relatively opaque negotiation process with advertisers that can last for days between rounds, digital alternatives like Google and Facebook offer automated audience targeting. Advertisers are not going to wait around for even longer just to get a proposal from a TV company that also includes a small addition of programmatic TV or OTT delivery when they can get audience reach with the press of a button from companies like Google and Facebook.
Turner, Fox and Viacom address another issue—complexity—in their letter about the Open AP initiative where they stress the need for consistently defined audience targets and standard measurement and reporting. This is one area where media companies will do well to work together and push back against advertisers who inadvertently make it harder for everyone to do business by layering on a variety of new metrics and performance targets. Digital media’s issue with too many metrics is an example of the problems caused when media companies allow complexity to overshadow their offerings.
Maintain Control of the Ship
Digital publishers did not focus enough on maintaining control in the market. Programmatic prices are low even though they are more targeted than direct sold. Advertisers bring their own audience data, leaving publisher data to languish. Buyers require a variety of metrics and quality standards that are governed by expensive and arbitrary vendor relationships. Even reporting standards favor advertisers, allowing discrepancies in the buyer’s favor up to 10%, with their own ad server as the source of record.
TV media companies must have a loud voice as advanced TV standards are hammered out in order to avoid industry norms that hurt them. Media companies should start talking now about what they want in a future targeted TV equivalent of the IAB standard digital advertising Terms and Conditions.
Media companies must also start protecting internal assets and revenue controls. Centralized product information in a single catalogue gives sellers control over the proposal process and gives delivery teams control over campaign execution. Yield optimization teams ensure that prices and campaign delivery is maximized. New vendors should be scrutinized for transparency and fair payment practices.
With Facebook and Google dominating the publishers whose businesses have already transitioned to a digital realm, it is clear that TV media companies will be faced with new threats. Channel management is a philosophy and a discipline that ensures media companies stay in control across new channels as their advertisers, viewers and even their content changes dramatically.
Interested in learning more? Find out how Fox noted a 40% increase in bookings coupled with a 13% increase in ad revenue in this white paper, "Moving Broadcasting Towards Advertising Excellence."
Lorne Brown is president of SintecMedia, which offers media business management solutions.
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