Alphabet recently announced that YouTube earned $15.15 billion in ad revenue in 2019, an increase of 36% from $11.16 billion in 2018 and nearly double from just two years ago. YouTube earned more ad dollars than ABC, Fox and NBC combined. With 126 million unique visitors in the U.S. each month, YouTube continues to be among the most popular streaming video providers, most notably on mobile devices and for accessing music. Additionally, YouTube remains a popular destination with Millennials and Generation Z.

As ad revenue for YouTube and other digital properties continues to increase substantially, the ad revenue growth for non-addressable television remains sluggish at best, hindered by declining ratings, an older viewing audience and continued competition from digital media.

Traditional media companies have embarked on several strategies to better compete as advertisers allocate more dollars to digital media. These include; becoming more scalable by acquiring companies such as AT&T’s acquisition of DirecTV and Time Warner, Disney’s majority acquisition of BAMTech followed by 21st Century Fox. Additionally, Comcast acquired DreamWorks and Sky and, more recently, Viacom and CBS were reunited. All these media companies have been launching their own streaming video services: Disney Plus, Peacock, HBO Max and, more recently, ViacomCBS.

To keep pace with digital media, the TV industry is using more granular data and analytics to plan and buy. Besides the data available from streaming video viewing, these include programmatic buying and addressable advertising with the ability to “zero in” on a marketer’s best customers. There is also a gradual movement away from using demographic ratings for media planning/buying and, similar to digital media, use audiences instead.

Another strategy has been the use of TV attribution models with the capability to measure the impact a TV advertising schedule has on brands’ return-on-investment (ROI). Digital media has for years been able to measure the “lower funnel” effect of an advertising schedule such as brand consideration, purchase intent and, finally, sales. On the other hand, television was used for “upper funnel” objectives such as building reach and brand awareness, but had limited “lower funnel” measurement capabilities.

Jo Kinsella, the President of TVSquared, a global provider of linear and digital TV attribution, says, “Everyone knew TV worked, but had no way to prove it. Today, thanks to attribution, it can be measured and tied directly to business outcomes. Because of that, we’re seeing ad dollars come back to TV every day. It’s really quite simple: when you can prove TV works and quantify its impact on business outcomes, advertisers will spend more.”

Both buyers and sellers are now using TV attribution models, Kinsella adds. “We’re seeing the sell-side start to wake up to the fact that marketers are the ones with the power. Not only do media owners and publishers have to adapt to meet the demands of marketers that want to measure and optimize TV campaigns, but to also capitalize on the convergence of linear and digital.” Kinsella notes some marketers and ad agencies are more advanced and already employing platform-based attribution models to measure incremental reach, to understand optimal frequency across platforms and use audience-level data to get a much richer picture of what’s happening across screens.

TV attribution requires a number of data points starting with the granular tuning data from set top boxes of cable/satellite providers, Automatic Content Recognition (ACR) from “Smart TVs,” the Nielsen People Meter sample and mobile apps, among others. The information from TV is then integrated with inputs from various other data points such as online visits/sales, in-store traffic and “first-party” information from marketers, to name a few. There are a number of ad tech companies providing TV attribution to buyers and sellers; however, there remains no standardization.

Bill Harvey, a well-known industry consultant and serial innovator, says, “TRA did some of the first big data cross-media ROI studies starting about ten years ago, and found that TV outsells digital, as later verified by Standard Media Index and Fox with Bill Harvey Consulting. However, the way ROI attribution is practiced is non-standardized based not only on the data used, but even more based on the secret models used. The Advertising Research Foundation (ARF) will soon announce a project that has been in development for a year to establish a truth standard by which these diverse modelers can continue to use their proprietary tools, but at least be able to calibrate them so the results across the industry fall more in line with each other.“

For decades, network television ads have been negotiated using ratings of age/gender as the target, with a bulk of the buying occurring during the “upfronts” in the late spring, with the ads running months later. Will television attribution change the method television is currently bought and sold? Kinsella says, “Attribution has already and will continue to have a massive impact on the industry as a whole, simply because it makes everyone accountable to do what’s best for the marketer. All campaigns will eventually be sold with performance insight that will change the game– that is the future for every buy type, including the upfronts. Brands are already demanding measurable guarantees for TV buys and ratings no longer cut it.”

Kinsella concludes, “We are in the midst of the most exciting time in the history of TV with more advertising opportunities than ever before. Today, we can give marketers the greatest scale and reach, combined with the ability to target an audience on any device. Because of the convergence of linear and digital video, we are faced with fragmentation, which pushes attribution to the forefront. It promotes a basic industry requirement to deliver all campaigns with insights, and to measure performance, reach and frequency across platforms, screens and devices.”

Harvey agrees and adds that major television networks are beginning to guarantee based on ROI and other such business outcomes, a trend started by Meredith in print and now gradually expanding across TV.  Cable-backed Ampersand (formerly NCC), the data-driven TV advertising sales and technology company, is now reaching out to broadcasters to make their inventory addressable, an idea Next Century Media recommended 25 years ago. Developments like these, plus inherent reach and impact, are destined to cause television to make an ad growth comeback.

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Brad Adgate