In just a few short years, DVRs and video-on-demand have dramatically altered how television is watched. In 2006, fewer than two percent of households owned a DVR. Now, more than half do. The use of DVRs has changed along with market-growing penetration. Instead of just being time-shifters, many viewers are effectively becoming collectors, stockpiling so many shows on their DVRs that they don’t have time to watch them all. As a result, they’re also watching shows later, at a time when it’s convenient to them.

As The New York Times reported recently, this fall’s television season saw a surge of viewers watching shows four to seven days after the initial air-date. Broadcasters and cable networks typically base their ad prices on so-called C3 ratings or the amount of viewership over the course of three days of delayed viewing, and view those later impressions as effectively uncompensated.

The Way I See It

  • I see people spending A LOT of time in front of a screen. According to a recent survey from eMarketers, adults in the U.S. spend four hours and thirty-one minutes in front of a television and an additional five hours and sixteen minutes in front of a computer, tablet, or smartphone screen every day.
  • I see some doors opening while others close. While most viewers fast forward through at least some of the commercials on their DVRs and services like Dish’s AutoHop continue to proliferate, many networks are creating apps that allow viewers to easily access their favorite shows on their phones or using dynamic ad insertions to update ads embedded in shows viewers’ access through video-on-demand services.
  • I see a growing integration of TV and social media as viewers use tablets and smartphones to engage with friends or networks while watching TV.
  • I see the very meaning of “watching TV” changing as viewers increasingly access programs from a variety of devices. While televisions still dominate living room viewing, a recent survey by Motorola shows that most bedroom TV viewing now takes place on a tablet.

The Way the Industry Sees It

TargetCast has had great success as an agency helping its clients navigate these churning media waters.  I sat down with Audrey Siegel, TargetCast’s Agency President, to discuss how shifting viewing habits have changed how TV advertising is sold and used.

A lot of the discussion around changing viewing habits has been focused on viewers being able to skip or fast-forward through commercials, or view ads later, because of delayed viewing. Are there other, more subtle trends in viewer behavior that are getting overshadowed by these larger issues? If so, do they represent opportunities?

It is certainly true that increased consumer control over multiple aspects of their viewing behavior has forever changed the medium at its core.  The ability to time-shift viewing is really the tip of the iceberg.  We must now add to time-shifting the viewer’s ability to platform shift, to actually change the location of their viewing as well as the time in which they view a particular program.  In effect, dayparts are becoming intensely personal; “my primetime” supplants generic primetime.  The language around the nature of the viewing experience – at-home, lean-back, me time – must now recognize mobile as well as multiscreen viewing.  All of this viewing, ultimately, will be wrapped in the cloak of digitized delivery, of both ads and programming, and will open up television advertising opportunities for addressable messaging and dynamic creative versioning.  This ultimately will make our most mass medium most personal, promising greater viewer engagement and potentially greater brand engagement as a result.

How have changes in viewing habits altered our ability to track the effectiveness of the advertising that does get seen? What opportunities does that create?

Tracking the effectiveness of TV advertising has long been a promise unfulfilled.  We have settled for surrogates – such as program engagement, ad awareness, and commercial ratings – but in fact have not been able to directly connect television advertising with marketplace effectiveness in the most direct manner.  The increasing digitization of the video medium, as well as the multi-screen nature of program and ad delivery, brings us closer to the realization of effectiveness metrics.  In addition, as we build more complex multi-channel attribution tracking and modeling applications, we will better understand not only the effectiveness of one video channel, (television) but its impact on, and relationship with, other video elements (mobile, online) as well as other messaging channels (search, social).

Continue Reading Changing How We Watch Changes How We Sell

I talk here on Madison Ave Insights a good amount about digital, social media, and mobile advertising trends and developments, and how they are changing the industry.  Advertisers are shifting dollars from traditional print and television to online media outlets and novel platforms – that is no question.  However, televisions are still in nearly every home in America, tuned to leading sitcoms, special programming, news, and sports.  So, how do advertisers determine which programs are worth allocating ad dollars to in order to reach target audiences?  Cue Sweeps periods.

The Way I See It

  • I see Sweeps, which are a data-collection periods used to determine local viewing information and provide a basis for scheduling programs – what gets renewed and what gets cancelled – and making advertising decisions for local television stations and cable systems, as a sort of precursor to the type of data-collection processes that advertisers are able to initiate online and on mobile.
  • I see many arguing that Sweeps are an outdated process and one that are no longer relevant in the age of new consumer data and because viewers can be determined through other aspects, especially given the new “second screen” trend of using social media to discuss TV programming while watching.

The Way The Industry Sees It

I sat down with Matt Seiler, CEO of Mediabrands, Interpublic’s media-buying division, to discuss the upcoming annual Sweeps periods and the relevance for the advertising and entertainment industries.

How and when did the Sweeps process begin? How have they evolved over the years to remain effective?

The concept of sweep periods are almost as old as television measurement itself. Nielsen began sending out viewing paper diaries in 1954 to capture demographic information, a practice that continues today in the smaller TV markets—almost sixty years later. Because the data is only collected at certain times of the year, networks and stations tend to heavy up on first-run and special programming in order to influence the ratings. This is especially mind-boggling when you consider that top and mid-tier markets are being measured electronically, fifty-two weeks per year. In terms of evolution over the years, there’s been virtually none, and better measurement of local television is something we strongly believe in. To Nielsen’s credit, they are currently exploring different forms of improved electronic measurement in smaller markets and we are involved in several committees to help guide the process.

How important are the Sweeps periods and data collected for advertisers in terms of allocating spend? Are there other factors that impact that decision as well?

To our dismay, it is still a significant consideration for our local investment staff because of the nature of the measurement. However, it is hardly the only factor involved in their decision-making, as we leverage all of the data at our disposal to help us buy smarter.

Continue Reading Television Sweeps Periods: Still relevant or outdated?

Ask anyone in Ohio what they’re least excited for during the home stretch of this year’s Election season, and I bet you they’ll say the non-stop television, print, and online advertisements from Obama, Romney, and other Ohio politicians trying to win the battleground state. At the Democratic National Convention in August, the crowd cheered and laughed when Obama said he was even tired of saying, “I’m Barack Obama and I approve this message.”  Election season always means a surging tidal wave of political advertising. The 2012 elections are expected to break records for ad spend – after the 2008 elections hit a new record as well. According to Kantar CMAG, the United States will see 43,000 political spots a day until Election Day. We know what all of this means for the average American voter preparing to go to the polls, but what does it mean for the advertising industry?

The Way I See It

  • I see a surge of revenue for local television stations, especially in battleground states, and online ad networks with spots from politicians and campaigns, as well as business groups, interest groups, and think tanks.
  • I see a promising surge in activity for the advertising industry that should have a positive overall impact on advertising spending – perhaps enough for the rumored recession ahead to be postponed.
  • I see an election season that may spell change for the future of political advertising and advertising in general – with a potential shift from traditional, local TV spots commandeering political ad spend to more innovative online, social media, and mobile advertising claiming more of the ad dollars. What has a greater impact on voters?

The Way the Industry Sees It

I sat down with Steve Farella, the founder and CEO of TargetCast, to pick his brain on this year’s political ad spend and what it means for the advertising industry as a whole.

Kantar CMAG projected the total spending on local spot TV advertising in the 2012 elections will be at $3 billion. What impact will that have on the advertising market as a whole?

At this point in the race, the largest ad spends are anticipated to be in those states that are still considered “swing states” where it is unclear whether they ultimately join with other blue or red states in the election. Those states currently include: New Hampshire, Ohio, Virginia, North Carolina, Florida, Wisconsin, Iowa, Nevada, and Colorado. Generally we see little national advertising and it tends to have only slight or no impact on national broadcast. Most agencies work with their clients to plan their local scheduling and daypart utilization so that, where possible, they side-step the heaviest pre-election weeks based on the clients’ needs. Primetime garners 23% of campaign spend, while combined News dayparts gets 32%. Early Morning saw significant growth between 2008 and 2010 and we expect that trend to continue. Access and Early Fringe also see activity while Late Night, Daytime, and Weekend see less.

In 2008, spending on political ads hit a new record. How does 2012 spending and overall advertising compare with the last election?

The explosion of Super Pacs – 501 (c)(4) organizations, trade associations with political arms – are the biggest development in 2012. For example, advertising weight in the market of Columbus, Ohio for the week of 8/15-8/22 reached 1,842 presidential race spots as compared to 832 spots in 2008. Las Vegas saw its presidential spot count go from 925 in 2008 to a record 2,870 in 2012. Wells Fargo analyst Marci Ryvicker has raised political advertising estimates from $4.9 billion to $5.2 billion by Election Night. So far, presidential candidates have spent more than seven times the amount of money spent in 2008 on digital ads (up from $22MM to $159MM). Online ad spending has doubled as a percentage of campaigns’ budgets over the same time period. Thus far, online ad dollars have mostly focused on emails, display ads, sponsored search terms, and audio and video ads.

Continue Reading Paid for by Ron Urbach: 2012 Election Season for the Advertising Industry