Broadcasters To Supreme Court: Save Our Business Model

This article in MediaPost summarizes the broadcasters' case against Aereo this way:

Calling Aereo a “direct assault” on the broadcast industry's business model, a coalition of TV companies indicated in court papers that Aereo's continued existence could mean the end of free over-the-air television.

In my reading of the Constitution, I see neither a right to free TV nor protections for an existing business model (snark over). 

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Digital Is Selling More Soap Than It Gets Credit For: Nielsen Study

This headline comes from Ad Age today.

I'm glad to see more quantification of online ads' impact for branding. But I lament that this kind of story is still headline-worthy. Why is it still so surprising that online advertising is effective and helps sell products?

After all, I wrote about the first Cross Media Optimization Study (XMOS) that documented the brand impact of the lowly banner ad for Dove Nutrium . . . when was that . . . must have been about 2001. And scores more of these studies have come out since. In my research with marketing mix modeling vendors, I hear that digital is readily quantified and has an important role in the mix.

So can we get beyond nonsensical biases about "banner blindness" and acknowledge the reality that ads don't have to be a Cannes-winning video extravaganza to get the message across?

End of rant. I feel better now . . .

Is Aereo About TV Or The Cloud?

Julianne Pepitone's review of the upcoming US Supreme Court case American Broadcasting Companies, Inc. versus Aereo nicely covers the case's implications on two big industries, old and new: television and cloud computing. (P.S. Thanks for the shout-out to me, Julianne!) The potential impact on the TV industry is pretty clear, but the cloud? I'm not a lawyer, but the issue is likely to turn on the difference between the copy being in the cloud or in your home.

In 1984, the Supreme Court upheld the right of individuals to make a recording of a television program for their private viewing in what has become known as the Betamax case. So far, lower courts have used this precedent, in combination with Aereo's clever technical design, to say Aereo is legal. For the Supreme Court to rule against Aereo, it will have to find that some aspect of their model is different from a VCR. 

And there it is: The VCR sits in your living room, while Aereo is in the cloud. No doubt ABC and the broadcast industry will make the case that this is a crucial difference and since Aereo is the entity sitting on these copies of their programming, Aereo is infringing on their copyright. It will be fascinating to see the arguments in detail and see how the Court views them.

Julianne notes in her article:

If the court rules against Aereo, the startup and its supporters warn the ramifications could put other services that use remote, or cloud-based, storage -- Google Drive, Dropbox, remote DVRs and many more -- at risk. Any of those outcomes depend on the scope of the Supreme Court’s decision.

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Help! The Computer Ate My TV Buy!

How Software Is Eating Video Ads And, Soon, TVMy new report, “How Software Is Eating Video Ads And, Soon, TV” just went live. In it, I document how automation has gained traction in digital media buying and why it’s only a matter of time before we see it jump to assets such as online video. Read the report now and join me for a Webinar on Tuesday, February 25, at 11:00 a.m. Eastern standard time.

Sure, the scarcity of inventory and the premium associated with professional video content drive caution and reluctance among sellers. But in a few years, short- and long-form video content, both user-generated and broadcast-native, will be bought programmatically in an inevitable takeover of automated trading that has already started today – and will work all the way up to TV buying. Two forces make programmatic buying unavoidable:

  • Traditional buying cannot cope with audience fragmentation across devices. The explosion of new platforms and ways of viewing videos will continue dispersing audiences, making it increasingly difficult to reach the desired number of viewers through linear TV alone. And many of these new platforms are digital, enabling a break from broad age/gender ratings buys and a move to addressing ads to individuals. Traditional manual buying approaches simply can’t cope with this volume of video sources and the shift to addressable advertising.
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Marketers: Focus On Video Audience Fragmentation, Not Cord-Cutting

With all the talk of cord-cutting, you'd think consumers were abandoning video entertainment for a return to a Neolithic era of telling stories around the campfire after the day's hunt. I published a report a couple of weeks ago called Marketers: Don't Worry About Cord-Cutting that shows this isn't the case. (First, a shout-out to my colleague Jeff Wray, who allowed me to use some of the data in his Forrester Research Pay TV Forecast, 2013 To 2018 [US]).

Are consumers getting their video entertainment from different source? Yes, largely migrating from cable to telecom providers like Verizon and AT&T. This has little to no impact on how marketers plan and buy their TV campaigns.

Are consumers filling some of their video entertainment hours with online streaming sources? Sure, but for the most part, online video viewers are -- and remain -- heavy linear TV viewers, using new sources to get more of the entertainment they love (as I documented in this report last fall). Some younger consumers are delaying getting a pay TV subscription of any type, and perhaps they may never. But then they will fill their entertainment hours with video from Vevo, YouTube, HuluPlus, etc., where advertisers will have ample opportunity to reach them (oh, yes and some ad-free Netflix, but then, ad-free DVD viewing is fading away).  

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The Sunset Of GRPs

Gross rating points (GRPs) have been debated in the digital world for years — census level impressions should crush a panel-based measurement like GRPs — until you run into the raft of pesky technical issues: bots, viewability, server-side versus client-side measurement, et al. Meanwhile, the big money (i.e., TV) continues to be traded on GRPs, and with the advent of Nielsen OCR and comScore VCE, it appeared that digital was ready to throw in the towel and trade on GRPs, at least for online video.

But the story doesn't end there. GRPs, being a panel-based metric, have become more and more vulnerable as audience fragmentation decreases the number of viewers for any individual show: first small local broadcast markets, then low-rated cable networks, and now the general decline in audience size across the TV spectrum. This leaves a lot of audience unmeasured by Nielsen but still with intrinsic value to the advertiser, if only you could find another "currency." 

MAGNAGlobal's most recent Media Economy Report takes one of the most direct stabs into the heart of this venerable metric, as reported in this Mediapost article: MAGNA calls for shifting to impression-based trading for local TV ad inventory.

I believe this is a harbinger of the end of GRPs. As I said in my April 2013 report Digital Disruption Rattles the TV Ad Market, disruption won't likely be a sudden, massive event but will begin at the margins in areas like spot advertising, which are smaller dollars and thus less risk to the advertiser's campaign results if a new technique isn't successful. 

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