[Editor’s note: This article has been reposted with permission from the ANA. View the original article here.]
According to eMarketer, TV ad spend is north of $72 billion per year. But, what quantifiable effects do TV ads have on sales? Any marketer unable to answer that question isn’t alone.
As with many aspects of marketing today, the answer lies in the data. But there’s a secret to uncovering the answer: This data needs to be specific and clean; it needs to be collected, vetted, and shared in a way that complies with today’s standards of ethical data usage.
In reality, the secret to finding out how TV ads influence sales is not about the data itself; it’s about how the data is used and applied to help inform a better view of the consumer. After all, when used in the right context and with the right combination of insights and technologies, data acts as the cornerstone for any successful TV advertising strategy that drives sales. Proving what effect those ad spots have, however, can be difficult.
Making matters worse, there are a number of myths about quantifying the effects of TV ads that have left many marketers misinformed. To get a better understanding, here are four myths and the realities of the TV ad targeting and measurement space.
Myth 1: Only a small number of households can be reached via addressable TV.
This was the reality a couple of years ago when the number of addressable TV households was less than 10 million. However, as DISH Media Sales noted in a 2016 contribution to Media Village, the number of households with addressable TV will top 70 million by 2020, which is about 70 percent of the total U.S. consumer market. Furthermore, there are about 90 million households with a pay TV subscription to a cable, satellite, or other telecommunications provider, TechCrunch reports. These households should have a clear and compelling role in any marketing plan.
Myth 2: Only two dimensions — age and gender — can be used for targeting TV ads.
Some major TV networks (e.g., Open A.P. consortium, NBCUniversal) have launched or announced plans to launch capabilities for data-driven ad targeting on linear TV so that their advertisers can buy the right shows based upon precise audience targets that go far beyond age and gender. The approach is known as “audience index and reach” advertising. With this approach, advertisers can plan against networks, dayparts, or programs that index well for specific audience characteristics and have maximum custom audience reach for their TV investment dollar.
Today, it’s become increasingly more difficult to discern between where traditional linear TV ends and digital channels begin. That’s because the TV industry has made a concentrated effort to bridge the two — taking the best of both worlds to create a supremely advanced TV ecosystem that promises to rectify challenges such as cross-device viewership, slow-to-measure campaign reporting, fraud, transparency, and flawed last-click attribution, which plague both traditional linear and digital media. This advanced TV ecosystem offers marketers a diverse set of behavior-based dimensions that they can use when identifying the right audiences to target.
As digital and TV continue to come together, the convergence is giving way to collaboration. Networks are doing more to work with media buyers on pre-campaign planning and to explore ways to best identify advertisers’ ideal custom segments up front. It takes some training to start thinking of a target audience outside the legacy framework of age or gender for media planning. Marketers can use ad creative briefs (that describe the ideal audience profile based on rich research and analysis) to create custom segment definitions. Custom segments can include first-party data or any of a growing number of third-party data sources.
Myth 3: Closed-loop measurement is not possible for TV ads.
For the digital ecosystem, viewership data is highly coveted as a means of finding a viewing audience in the digital landscape and either extending a target or retargeting viewers. Viewership data collection for premium video content is also in high demand, and ad exposure data is in even higher demand for measurement. Not only that, but TV ad exposure data has changed, and can be more precise than digital. For example, content (and ads) delivered via set-top box devices are authenticated TV/video experiences, meaning the pay-TV operator has a first-party, personally identifiable information-based data relationship with the household, which means there are no anonymous cookies to manage or reconcile, as there would be with digital.
In this closed-loop environment, marketers can see who was exposed to the ad, create upper-funnel metrics for reach and frequency against a custom audience segment, and use transactions from their customer relationship management (CRM) files or via third-party data partners to determine incremental impact on priority consumer outcomes, such as conversion rate. But marketers should keep in mind that set-top box data is fundamentally different from automatic content recognition (ACR) data, and they should not be afraid to use and test both.
Ultimately, what’s available today is still leaps and bounds ahead of reach and frequency or purely modeled solutions. That said, the proliferation of TV viewing data sources in the marketplace is still relatively nascent, so there may be messy or incomplete data issues that marketers will need to grapple with for some time.
Myth 4: Advertisers cannot reach and measure the same audience segments across TV and digital channels.
In fact, using identity resolution technology, ad sellers and ad buyers can accurately identify consumers across devices and reach “apples-to-apples” segments across channels and platforms, including linear TV, video on-demand, over-the-top video, TV everywhere, digital, and mobile.
Your Next Move: Closed-Loop TV Measurement
Savvy brands are already taking advantage of data-driven TV advertising to optimize campaign lift and ROI. How do they get positive, quantifiable business outcomes? It starts with an investment in closed-loop measurement services, which marketers can think of as multiple inputs being fed into a single output, similar to signal-level data feeds. Furthermore, to measure the incremental lift in sales for pay TV campaigns, advertisers and their partners must follow a “test and control” methodology to evaluate the effect of campaign exposure versus unexposed audiences.
In addition, to generate TV post-campaign reach/frequency and conversion lift reports, marketers or their measurement partners must begin by processing, linking, and integrating multiple data sources, including national (or local) as-run linear TV ad exposures, TV viewership data from set-top box data and ACR data partners, first-party CRM transaction data, and any third-party data sources.
As one can see, closed-loop TV measurement is very real. As marketers budget their ad dollars, they should also invest in the people, processes, and technology to get the right answers for their TV advertising strategy.
To learn more about advanced TV, download our guide, The Future of People-Based TV Advertising Is Here.