As we approach the Upfronts, one of the biggest events of the year for the television industry, it’s becoming clear with the changing television landscape that the way we value programming has also evolved. Television buys for ad spots were typically assigned a cost based on how many viewers that particular TV program is expected to have. Gross Rating Points (GRP) were what governed program costs and determined rate cards for linear TV ad buys. Networks leaned on these metrics to justify their pricing (think of the cost of an ad spot during the Super Bowl vs. a program aired during a typical early fringe time spot).
But as advertisers are looking to target audiences with more meaningful messages, we’re moving to a place where content delivery is worth different amounts based on who is watching and buying, rather than when the spot is or how popular it is. For example, HGTV’s “Property Brothers” may not have the same GRP as broadcast network NBC’s “This Is Us,” but for an advertiser like Home Depot, a spot during “Property Brothers” could be more valuable to reach its target audience than blanketing broadcast viewers during “This Is Us.” For Home Depot, a spot during “Property Brothers” could potentially reach a higher concentration of the retailer’s target audience than “This Is Us”—and be cheaper, resulting in better ROI for their campaign.
By activating their own first-party data, or applying third-party data to campaigns, advertisers can put a true value to TV inventory based on how the data indexes towards a target audience and how it performs in achieving the intended conversion.
With the decline of linear TV viewers, programmers and Multichannel Video Programming Distributors (MVPDs) are trying to lure and retain viewers by reducing the number of ads consumers see in an attempt to improve viewer experience. While the supply for ad time is thus reducing, demand continues to remain high, with approximately $80 billion spent on TV ads in the U.S. in 2018. Advertisers are willing to pay top dollar to get in front of their audience—and the networks know it. As a result, prices are increasing with the high demand and low inventory.
Activating first-party—or even third-party data—to help plan your campaigns allows advertisers to get smart about their TV investment while also ensuring that their ad buy fits into the overall omnichannel video strategy of the campaign. Television ad buys may be pricier, but pinpointing your target audience with first- or third-party data will better refine and reach your target audience within linear TV households.
As advertisers head into the Upfronts, it’s important to remember the true value of their ad buy for their target audience, beyond GRP and ratings. To really see a return on ad spend, advertisers must take an omnichannel approach to TV buys and leverage the power of data in the campaign planning process to inform ad buying decisions throughout all parts of the marketing funnel. LiveRamp’s data marketplace has hundreds of permission-based data sets to help advertisers clearly define your intended audience and discover what TV programming is keeping them engaged. Learn more about the future of people-based TV advertising and how to get started with advanced TV strategies.