What TV Advertisers Can Learn From Baseball
Record more ad wins by focusing on data first.
The advertising industry is stealing a page from baseball’s playbook — the Billy Beane playbook of data-driven decisions, to be exact.
Billy, of “Moneyball” fame, became the general manager of the Oakland Athletics in 1997, inheriting a team with a limited budget and seemingly limited prospects as, at the time, they had no big-name players on the roster. It was a true dilemma: they couldn’t get more money without winning, and they couldn’t get winning players without money.
However, Billy turned baseball recruiting on its head by ignoring age-old recruiting practices and trying something new. By having his statistics-savvy assistant Paul DePodesta tap into baseball stats known as sabermetrics, Billy was able to pull together a highly competitive team without sky-high budgets or salaries. The player salaries for the A’s ranked 24th out of 30 MLB teams in 2006, yet they had the fifth-best regular season record.
Heads up, TV advertisers
The TV advertising world is facing a similar challenge: ad buying is entrenched in a traditional process that relies on large budgets to fund largely emotional ad-buying decisions.
“Advertisers often make mistakes because emotionally they feel the need to advertise during specific events or shows, even though they may have to pay a premium,” says Jes Santoro, head of sales for Advertising Cloud TV at Adobe. “Sometimes that premium might not be worth it. Instead, they should use data to determine what their customers are watching and make decisions based on that.”
While TV ratings on many programs are experiencing declines, ad prices have still gone up because TV remains the best channel for brand awareness, and for impact with scale and speed. No other medium offers the powerful mix of sight, sound, and motion right in a viewer’s living room. The challenge: finding your specific customers among the broad range of channels and programming available.
Three ways to optimize TV ads with data
Radical changes in TV delivery and viewing habits are providing unparalleled — and untapped — ways to look at the numbers. So, even with TV audiences being displaced or fragmented by so many viewing options, by using data you can improve the effectiveness of TV advertising in three main ways — to define specific consumer audiences, to deliver ads where those audiences are, and to improve the effectiveness of those ads.
1. Use data to define audiences. Traditionally, broadcast publishers provide broad demographic data to identify the audience an advertiser can reach with their ad.
“There are a couple things that are kind of crazy about using demographics,” says Jes. “First of all, what’s important to a 49-year-old, and what’s important to an 18-year-old are dramatically different. Second, while those two people are counted as the same exact value, next year when the 49-year-old turns 50, he’s no longer valuable in that currency. It doesn’t make any sense.”
“We shouldn’t be valuating television investments based on these broad demographics. We should be valuing television investments based on specific consumer audiences,” Jes says. “A lot more value can be extracted from linear TV if we improve the precision behind our ad placements.”
Fortunately, you’re no longer limited to broad demographics as the only definition for TV audiences. Instead, you can now use any data set that can much more accurately define your customer — such as your unique first-party data. By connecting your data from digital channels to linear TV ad buys, your ad dollars will be much more effective.
You can also create audiences with data from second- and third-party sources. For example, a car manufacturer might use third-party data derived from DMV registrations that includes detailed census data of households that bought cars. This is much more specific than “males aged 18-49.”
“Work toward transacting on the audiences that are actually important to your business,” Jes says. “They might be 16-year-olds and 52-year-olds. You should look at them as prospects, not just a demographic range.”
When you identify audiences based on data, you can optimize your ad dollars to more specifically reach your intended audience.
2. Use data to plan ad inventory. With detailed audience segments in hand, you’ll want to identify ad inventory that gives you the best opportunity to minimize waste.
To consumers, TV is TV — regardless of whether they’re watching linear content, such as broadcast or network TV, or watching connected TV with an over-the-top (OTT) device like Roku. While viewers may not see a difference, for advertisers, the people, ads, and measurements very much exist in their own silos. This makes it more difficult to buy ads across the different delivery formats.
With data-driven ad-buying software, advertisers have sophisticated tools to reach more targeted — and granular — audiences for a lower overall cost and with less waste.
For example, if you want to target men who are interested in healthy, active lifestyles, the traditional (and typical) approach is to purchase ads during Monday Night Football. Your specific audience will be a subset of the male 18-49 demographic, so you are prepared for the fact that there is waste in that ad buy — the people who watch your ad who are not in that demographic or who are in that but are not interested in healthy, active lifestyles.
But your audience data matches well to the “Bite Club” audience on the Food Network every Thursday night. By purchasing ads in this time slot — likely at a much lower cost than Monday Night Football — there will be less waste than if you advertised to a more general audience.
Instead of working in silos to buy ads on linear or connected TV, you can use Adobe Advertising Cloud TV to plan and measure brand campaigns across screens, devices, and mediums. Additionally, you can purchase inventory from broadcasters, including NBC and FOX, right from the platform. This will help you create a seamless experience for your customers, no matter when or where they watch TV, and allow you to execute holistic strategies based on all aspects of an audience’s viewing habits.
“Because you need to maximize the value of all of the impressions, we identify the environment, networks, dayparts, and sometimes the specific programs that will have the highest concentration of your customer,” says Jes.
Another advantage to connected TV is that you can receive reporting while your campaign is live, and make on-the-fly adjustments to better spend your ad dollars. For Allianz Australia, tracking their ad placements on connected TV uncovered the fact that the same ads were reaching the same audience over and over due to buying ads mainly with one publisher. To better balance frequency and reach, they spread their buy across multiple publishers and thereby limited audience duplication and achieved better reach.
3. Use data to improve the customer experience. TV viewers are enjoying an unprecedented amount of premium content that they can watch at their convenience. However, the ad experience has not risen in parallel.
“You sit there and you’re bombarded with 16 or so minutes of ads per hour, that are not relevant to you,” says Jes. “And the frequency of the ad is out of control. What we’re challenging ourselves with at Adobe is how do we start improving the ad experience and get it more on par with the very positive experience we have with some of the amazing content on TV. That means making ads more relevant, perhaps lowering the ad load a little bit, and being more targeted.
“With content that is so good and available at the viewer’s convenience,” says Jes, “they aren’t really going to complain about 15-30 seconds of an ad if it’s relevant to them because you used your data to target them directly.”
Hit a TV advertising home run
Changing the TV ad-buying process is complex. But the benefits are huge when you can apply your own audience segments and get real-time data about when, where, and how ads are performing.
“There’s a perception that measurement is difficult,” says Phil Cowlishaw, head of Advertising Cloud for Adobe in Australia and New Zealand. But he also shares three tips for getting started — there are lots of metrics so know what you are trying to achieve, work with multiple publishers to get better reach with less waste, and define your measurement plan and understand what you need to test.
“Your customers consume content in lots of different ways,” says Jes. “They are spread out across hundreds of networks, on different devices, and different types of delivery methods.” The best way to find your customers is through a data-driven approach to TV advertising.
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