With more and more people cutting the TV cord, figuring out the formula behind addressable and connected TV has quickly become top-of-mind for advertisers. But breaking through the old way of thinking around linear TV ad buying is still a challenge. ExchangeWire talks with Damian Garbaccio, EVP, Nielsen Marketing Cloud at Nielsen, about the advantages of addressable TV, the challenges the space still faces, and the value of connected TV for advertisers.
ExchangeWire: With its history in TV, how has Nielsen moved into the world of addressable and connected TV?
Damian Garbaccio: Nielsen has made some big inroads in the world of addressable and connected television in a few very important ways. As you might have seen in the news recently, Nielsen continues to push the boundaries of TV measurement across every viewing channel imaginable. We announced a new service, Nielsen Subscription On Demand (SVOD) Content Ratings, to measure streaming services’ programmes in a way that’s comparable to linear TV. We’ve already lined up a number of companies interested in trying it out, including NBC Universal, Disney-ABC, A+E Networks, Lionsgate, Warner Bros. Television, and three others.

Nielsen Marketing Cloud, the division of Nielsen that I lead, has played a big role in Nielsen’s move into the world of advanced TV as well. We recently launched the world’s first person-level TV DMP, which leverages Gracenote’s Real-Time Smart TV Data to enhance the audience targeting, consumer analytics, and measurement capabilities of the Nielsen DMP. This brings the industry one step closer to standardised audience segments across linear, advanced TV, and digital. Nielsen is leading the way towards a consistent currency for addressable media, something the market is starting to demand to ensure the quality and reliability of the audience segments advertisers are planning, activating, and stewarding against.

Finally, the Nielsen Marketing Cloud acts as the connective tissue that makes addressable advertising and content optimisation across the linear and digital TV ecosystem possible. We integrate seamlessly with major streaming services like fuboTV, connected TV, ad servers like BrightLine, OTT-TV players like ROKU, and we own the most advanced person-level viewership measurement technology on the planet with Gracenote and the Nielsen TV panel.

What are the advantages for advertisers to use addressable TV over programmatic TV?

Scale. Addressable TV can be applied to linear TV right now. Advertisers can target households and DMAs across the board right now, which means they can reach huge numbers of people based on relatively simple and generic targeting use cases.

Addressable TV doesn’t, however, power the more specific audience targeting we associate with programmatic. There are clear advantages to reaching exactly the audiences you want to target, but right now that comes at the cost of scale. Programmatic TV doesn’t have the scale at this point in time to meet the needs of national advertisers.

Another advantage that addressable linear TV has is that it can rely on the current analog TV ad-serving infrastructure. Real-time programmatic ad serving is great for digital, but doesn’t translate to linear TV.

What challenges does addressable TV still face, especially around adoption?

There is a big business culture challenge at play here. I’ve learned just how complex the strategy and business dimensions are around linear television. You can’t just immediately flip the digital automation switch and assume it’s going to work in a media like TV that’s been conducting billions of dollars in business for decades. That would cause chaos. Fears of decreasing ad revenues, increasing costs associated with infrastructure upgrades, and a sales force accustomed to direct sales would all stand in the way.

There is a growing demand for a consistent addressable currency for advanced audiences and this requires data standardisation. This will make the market more liquid. And with liquidity comes adoption. Nielsen is working hard with the industry, including with organisations like Open AP, to get the industry where it needs to be.

We have been anticipating this change and have been building out capabilities so that we are ready for the marketplace when it makes this shift.

How can marketers, as well as media owners, extract the value from connected TV?

First, ad buying in the modern era requires supreme flexibility. Advertisers demand creativity and options. As a result, we have seen content owners experiment with different ad loads on different platforms to find the right balance between linear and dynamic advertising.

Connected TV is no different – we have seen many media networks start to evaluate how to maximise the value for their advertisers and really start to bridge the linear and digital worlds. With connected TV, not only can you start to segment the audience based on any type of behaviour (e.g., heavy news viewers, families who purchased diapers online, people who requested a test-drive on my connected TV interactive ad) and, more importantly, you can begin to analyse their behaviour.

Maybe they happen to subscribe to a particular magazine, spend a lot on beer, or have certain interests that make it easier to engage with them again either directly through a digital campaign or using the extended reach and advanced targeting of linear television. And, as advertisers spend money to reach these diverse segments across linear and digital, they can measure the true impact of these campaigns.

The true power of our Nielsen Marketing Cloud is that you can find, engage, and re-engage with shoppers and audiences with increasing relevance as you continue to learn more about them and become smarter about how you reach them across both linear and digital worlds alike.

Damian Garbaccio, EVP Nielsen Marketing Cloud, Nielsen

What would be the one thing that you would immediately change (if you could) that would give brands more confidence in the space?

A focus on better measurement – that third-party independent measurement is necessary versus publisher-built measurement, which may be cheap/convenient, but may omit important and uncomfortable truths.

How do you see the future of connected TV changing in the next five years?

Five years from now, advertisers will be screen-agnostic, every impression will be understood based on the platform and the engagement it brings and the experience it creates – through relative comparable value.

Researchers and buyers will be able to combine and identify viewing in any way that fits their business need. This information will be supplemented with a more advanced and nuanced understanding of consumer behaviour like product purchase and retail behaviour, lifestyle choices, psychographics, device usage, and geolocation. Content and advertising will be more personalised, based on these far more granular audience characteristics. All of this will be increasingly served through digital pipes to ensure speed-to-market.

Viewership measurement won’t be limited to traditional TV content, rather we’ll have full measurement of subscription 'video', so both studios and distributors like Netflix, Hulu, and Amazon, have data they can use to discuss and establish value.

We will have the capabilities to better understand audience changes in real time across a wide spectrum of marketing execution platforms such as search, social media, email, video, mobile, and connected TV. Marketers will also get better at reaching the right audiences with relevant and timely advertising and content across all these channels.

We know consumers will have new devices, new ways of engaging with content, new behaviours, both in and out of the home, that will be important to continue to measure. And, as long as we continue to remember to always keep the consumer at the centre and connect media exposure with buying behaviour – this industry will continue to grow. And, ultimately, this is what matters most to the advertiser – what combinations of media choices drive optimal sales results.