Digital Video and TV have had quite a fascinating relationship over the last few years. As the dominant marketing platform for decades, TV has always been bought using high level reach metrics — e.g. gross rating points (GRPs) —because until very recently it was extremely challenging to measure both the direct audience viewership and downstream impact of a television ad. Marketers typically relied instead on panels, sales lift measurement, or if they were direct response — a 1-800 number — until the digital world upended this in some surprising ways. Digital advertising has always operated with more direct tracking mechanisms, enabling marketers to track conversions and other high value events happening online. However, digital video had to struggle through the transition to broadband, limited reach, and the ever present fear around brand safety.
At first, many digital video platforms attempted to operate like TV networks, selling ads using TV levels of targeting. Famously, when Snapchat first offered “Brand Stories” three years ago, they struggled to sell packages and were forced to drastically slash prices. Digital video buyers were expecting to target at the level they were accustomed to, not just using basic data like age and geo.
However, things change quickly, and we’re now arriving at a paradigm shift in the way advertisers measure both TV and Digital due to the interplay that these channels have — and with each measurement approach starting to converge.
There are a few major drivers of this shift, which we’ll dive into below:
One of the core advantages Digital Video carries compared to traditional TV is the specificity of targeting. Advertisers can target exactly the users they want, using their own data, to ensure that their ads are perfectly positioned to the optimal user. This follows from the general recognition amongst advertisers that not all views are created equal.
None have expressed this viewpoint more clearly than Neil Shah, Diageo’s global senior brand manager for Smirnoff, who last week said “TV is still a very important channel for us because it gets us unparalleled reach,” Shah said. “But with the phrase ‘unparalleled reach,’ I think there lies the paradox. It’s the paradox that reach is really, from my point of view, a vanity metric. When we’re using reach to understand how many people are seeing our ads that we’re running, especially on cable TV, fundamentally we do not know if they are actually engaging with the ad.”
Furthermore, as mechanisms for watching TV fragment (linear TV, OTT, etc), the standard currencies of the past for buying TV are becoming less reliable, prompting individual networks and agencies to try to create their own cross-device measurement mechanisms, which inevitably has lead to even more confusion and difficulty in the marketplace. This of course has prompted industry insiders to wonder how valuable it is to do all TV buying across a single metric.
The seed of much is this is coming from the second-screening nature of TV watching. Brands have gotten much more sophisticated around not just measuring the spikes in web traffic as a TV attribution mechanism, but intentionally driving integrated digital behavior (for example Shazam, recently acquired by Apple, has been a major enabler and predominantly focused on it since 2013). Of course this behavior has to be measured by more than a gross rating point.
Per Artie Bulgrin, the former research chief at ESPN “How do we account for different qualities of exposure by platform?” and added: “The idea of one metric is a fool's errand. Exposure is just the beginning. Business outcome may have to become part of the measurement process.”
Between the difficulties in cross device measurement and audience tracking, it is not a surprise that the New York Times reported this week that IPG Mediabrands forecasts traditional TV ad sales to fall at least 2% a year through 2022.
However, TV networks are not planning to take these changes lying down. NBCUniversal recently announced that they are banding together with Fox, Turner and Viacom in an effort to standardize and simplify premium video advertising. We should expect to see more efforts like this as TV networks attempt to compete with the measurement capabilities of digital video.
Last week, Adidas announced that it was suspending Facebook video ad buys after concerns over viewability arose. It was reported that they believe that as much as 30% of their spend on Facebook could be wasted because of low viewership. This is emblematic of a broader concern around inaccurate or false digital media reporting, which has led 21% of marketers to pull back on ad spendaccording to a new CMO Council study.
Heineken is taking note of brand safety issues as well, with news this week that the brand is bringing ad verification in-house. This change is an effort to better control their market and overcome ROI measurement challenges. Nestle, Ford, and Procter & Gamble are all to join the trend of in-housing advertising.
Meanwhile, Cisco just announced that they’re removing all of their ads on YouTube out of fears of their ads being featured around any “unwanted or sensitive content”.
These concerns around measurement quality and brand safety are core to the challenge of successful and scalable digital video — and notably not a real concern in the world of linear TV.
A topic we’ve covered before here in the Content Advisor is the cyclical nature of marketing channels. Every marketing channel goes through the same 4 step cycle:
Digital video is no different, and it is fairly clear that it is crossing the chasm from stage 3 to stage 4 — meaning that demand and scale are increasing, prices are going up, and those exponential returns early advertisers saw are starting to slip away. Just this week, Digiday reported that an increasing number of brands are frustrated with Facebook’s ROI particularly as prices have gone up — though some of this can be attributed to measurement issues.
One thing that seems pretty clear from all of these changes is that the concept of a view as the core value metric for digital video is going away. Advertisers and networks are both looking to provide and utilize customizable metrics that define goals based on views, engagement, conversions, or other high value outcomes for advertisers. Much of this will be driven by in-housing of measurement and verification.
Additionally, the introduction of second screening is enabling traditional tv providers to provide compelling metrics and data. Using a new attribution model built around measuring traffic to websites and foot traffic to certain locations, A&E Network is starting to introduce outcome specific guarantees as part of their advertising packages. Expect to see more efforts like this as TV networks try to compete with digital TV capabilities.
When it comes to proving the ROI of content, direct response B2C and B2B marketers have always had the upper hand. Brands that sell through a retail or partner channel, have complex paths to purchase, or invest heavily in publisher-created branded content — typically brand-oriented consumer marketers — have had a much tougher time proving out the impact of that content. Check our guide to tackling these challenges.
There have been major changes in organic consumption recently — and winning at organic reach is becoming increasingly difficult. Algorithms are changing and old strategies are becoming less effective. Let’s take a look at how marketers are approaching this bravest newest world.
One of those shifts is that we’re seeing more advertisers rely on Twitter, Snapchat, and Instagram to accommodate for the loss in reach from Facebook’s algorithm changes, which is estimated to have decreased by as much as 34%.
Some brands, such as Steak-umm, are leaning into Twitter heavily, favoring the ability to have a “real conversation” with their audience. This trend prompted Daviel Ives, the Head of technology research at GHB Insights to say, "We do believe a renaissance of growth and new [monthly active user]/engagement is starting to benefit both SNAP and Twitter as organic initiatives/targeted ad algorithms, app redesign, and a host of content driven campaigns are serving as positive catalysts in the field for 2018.”
Instagram continues to grow. Publishers and Influencers are taking advantage of the story format to drive audience acquisition and email sign-ups, while trying to walk the ever difficult line of making sure their asks don’t seem too much like ads.
Additionally, the Vitamin Shoppe is launching 800 individual Instagram accounts, one for every local store. Their goal is to build a more engaging profile based on community and individual store events and news.
Other brands are creating virtual influencers. Recognizing the power of influencer marketing, but also its pitfalls (Read: Jake Paul), some marketers are trying to have their cake and eat it too by creating digital influencers that have all the panache of a Kardashian, but none of the fears around brand safety.
Just do us a favor, when you try this, make sure there is a real person/team running the account, not a bot that can’t handle the internet hordes.
Brands are starting to explore Twitter commerce with gusto. Though they phased out the buy button last year, options like direct integrations with platforms like Shopify enable Twitter to position itself as a direct sales channel. Absolut is one of the brands taking advantage of these capabilities, focusing on organic posts via GIFs and videos to drive engagement and commerce.
Katherine Chen, senior brand manager at Absolut, had this to say about Twitter: “Facebook and Instagram are the pay-to-play platforms, whereas we see Twitter as more of a playground for our content that is less product-centric than our content on the other social networks.”
Not all efforts to adjust to the algorithm changes are proving worthwhile. Many had hoped that Facebook Groups would provide growth in organic engagement on-platform, yet user interest has proved tepid at best. Fitbit and the Vitamin Shoppe both hoped to use groups to increase brand engagement, but were disappointed by the results.
Fitbit had created groups in major cities, hoping to create fitness communities anchored around their brand, but at best each group has around 200 members at this point, with limited engagement in each group. Similarly, the Vitamin Shoppe created a series of groups built around fitness and healthy eating, but they haven’t seen much growth in those groups thus far.
Part of the issue with the failed group engagement attempts lies in a lack of marketing for the groups. But, Facebook is trying to make visibility of groups easier by offering plugins for websites and better search results.
Organic reach isn’t totally dead, but it’s really hard. The winners are winning because of either a long track record or new, sophisticated measures to adjust to the rapid changes. The brands who will come out ahead will be those who are willing to be flexible and respond quickly to the changes
Assumptions about what’s mainstream and what’s niche in terms of marketing tactics and strategies are becoming more fluid. Advertisers are starting to question tactics they’ve always used, while considering new tactics that were unthinkable just a few years ago.
Marketers are starting to question the effectiveness of retargeting ads, a strategy that has for a long time been a stalwart of any self-respecting media plan. Though these ads are designed to boost sales, 83% of marketers are now skeptical that the retargeting is responsible for as many sales as the tactics claim. This is supported by research that shows that 57% of consumers say retargeting ads have no influencer on their purchasing decisions, as well as other research from Accenture that 35% of consumers find social retargeting ads “creepy”.
This isn’t to say that retargeting is dead as a tactic. Just ask Amazon, who is testing their own retargeting platform right now. However, don’t be surprised if you see a reckoning when it comes to attribution around retargeting ads.
A topic we’ve covered extensively is the shifting consumer expectations, especially amongst the youth of America, around what they want a brand to be. The days of hiding behind perfectly worded press releases and staying out of social issues are fading away fast.
In fact, Unilever has found that it’s sustainable brands have grown 46% faster than others in it’s portfolio in the last year. They believe that their investment in products that are responsibly sourced, focus on the environment and natural resources, investment in renewable energy, and social impact initiatives have been responsible for the brands’ successes. This diversion from traditional marketing tactics allows consumers to connect to the brands at a deeper level, leading to strengthening of brand loyalty.
The Danish publication Zetland is shifting their marketing strategies in response to their audience feedback. After hearing that their followers would rather listen to their content than read it, Zetland launched an audio app. Their audience can now get the journalistic news they want the way they want it. Editor-in-Chief Lea Korsgaard pointed out, “It’s your readers and your members who should have the last say in how your product is [done].”
These shifts in marketing are proving again that eventually the advantages in all marketing tactics get arbitraged away, and brands have to work harder to give consumers what they want.
Curated and published by Adam Orshan, Amber Brooks, and Matt Levin in New York City.