A look at the current state & opportunity in the Addressable TV market

1. Addressable
TV
Himanshu
Bari
Copyright
–
Himanshu
Bari.
Do
not
share
4/25/14
Overview & Opportunities

2. Goals
1. Understand
broad
dynamics
of
the
addressable
TV
market
(US
ONLY)
2. How
can
set-­‐top
box
data
be
used
for
beIer
online
Ad
targeLng
and
vice-­‐versa

3. Connec>ng
the
TV
data
island
Data
Connec>on
Pla@orm
Online
Mobile
TV
Other(Cars..)
First
party
OR
Third
party
data
Granular|
Complete|
Mul>-­‐dimensional
Display
|Search
|
Video
|
Measurement
|
Content

4. Consumer
TV
watching
behavior
has
changed
• FragmentaLon
of
TV
audience
– No
longer
loyal
to
networks
but
to
shows
– Hundreds
of
channels
&
proliferaLon
of
‘reality
TV’
– VOD
• Change
in
habits
– DVR
&
Ad
Skipping
– Watch
on
demand
and
not
linear
TV
• Second
screening
– Interact
or
reach
via
online/mobile/social
media

5. Living
room
has
changed
• Smart
TVs
As
of
Q1-­‐2012,
per
NPD
&
Neilson
there
were
25
million
U.S.
smart
TV
homes,
but
only
12
million
are
connected
to
the
Internet
and
the
raLo
is
not
growing
• Game
consoles
(Q1-­‐2012)

6. Conversion
to
digital
almost
done…
• Digital
needed
for
2-­‐way
signal
exchange
for
addressable
TV
• Satellite
(aka
DBS)
&
Telcos
are
digital
from
incepLon
• HD
enabled
set-­‐top
boxes
–
around
40M
homes
(Q1-­‐2012)

7. Technology
infrastructure
coming
together
Inside
the
Home
Distributors
• Set-­‐top
box
data
goldmine
• Smart
TVs
&
game
consoles
• Smartphones
• Big
data
processing
infrastructure
(open
source
+
cloud)
• 90%
conversion
to
digital
done
Complete
Customer
Data
Fair
Reach
42M
homes
addressable
with
Live
TV
or
VOD
in
CY-­‐2014

8. Makes
all
of
us
dream
of
the
addressable
TV
opportunity
Consumers
watch
VOD
or
Live
TV
Targeted
ad
is
served
Consumer
interacts
with
ad
on
screen
or
on
Smartphone
Online
&
mobile
ads
follow-­‐up
on
TV
ads
Consumers
take
some
acLon
Target
Measure
Analyze
OpLmize
Cross
plaeorm

9. And
a
lot
of
$$$$
• How
much?
– $11.6
billion
by
2015
–
per
Bank
of
America
(
needs
verificaLon)
– Growth
not
clear
• Which
budget
is
the
money
coming
from?
A
piece
of
$70B
Steal
from
other
media
New
money
from
priced
out
buyers
Easier Harder
$2.4B
PoliLcal
Ads

10. The
pie
will
be
split
among
fewer
players

11. Player
incen>ves
are
aligned
to
realize
benefits
Player
Category
Incen>ve
Incen>ve
Strength
Market
Power
Brands
• Reduce
spend
• Focused
targeLng
before
criLcal
events
like
product
launches
• Tie
TV
with
online
&
mobile
Very
high
Varies
Agencies
• Leverage
data
to
make
smarter
buying
decisions
• Their
clients
are
pushing
them
Neutral
Medium
Data
providers
• Incremental
revenue
Very
high
Medium
Programma>c
infrastructure
+
measurement
• Capture
market
share
in
a
nascent
&
evolving
area
Very
high
Low
Distributors
• MoneLze
their
data
• BeIer
Ad
targeLng
• NegoLaLng
power
against
the
networks
Very
high
Very
high
Networks
• Stem
$
flow
to
digital
• Higher
CPMs
for
underuLlized
inventory
• Close
loop
with
second
screen
Medium
Very
high
Hence, addressability is inevitable…

12. But
we
s>ll
need
to
cross
the
chasm
Early
majority
Late
majority
Inventory
- Remnant & local
- DVR & VOD - All day parts
- Pieces of primetime
Sellers
- Cable MSOs
- Virtual MSOs
- Major networks
Pricing models
- Limited auctions
Programmatic
players
- Specialized for TV
- Some digital ad players
Agencies
- Focus on effectiveness &
efficiency of campaigns
- Customized video creative &
versioning
Brands
- Niche & differentiated - Mass appeal brands
- Reservations & ceilings
- Consolidation

13. What
will
help
in
crossing
the
Chasm?
Buy
Side
-­‐ Broad
reach
-­‐ OrganizaLonal
alignment
-­‐ Cross
plaeorm
campaign
management
Sell
Side
-­‐ Controls
&
ROI
guarantees
-­‐ Yield
management
-­‐ BeIer
dynamic
Ad
inserLon
-­‐ MoneLze
set-­‐top
box
data
Programma>c
infra
-­‐ Neutral
management
&
buying
plaeorms
-­‐ Cross
plaeorm
&
cross
channel
measurement
Technology
-­‐ Infrastructure
interoperability
-­‐ ID
mapping
Data
-­‐ Format
compaLbility
-­‐ IntegraLon
with
online
&
offline
Consumer
Privacy
&
Favorable
Regulatory
environment

14. Connect
the
TV
data
island
• OpLon-­‐1:
Targeted
TV
Ads
– Offline
first
party
data
+Experian+
STB
data
=>Targeted
TV
Ads
• OpLon-­‐2:
Targeted
online
&
mobile
Ads
– Offline
first
party
data
+
Datalogix/Experian+
STB
data
=>Targeted
online
+
Mobile
Ads

15. CRM
data
Email,
zip
ID
etc.
Third
party
STB
ID
+
Segment
TV
audience
insights
from
MSOs
OR
Ad
networks
Set-­‐top
box
Subscriber
data
from
MSOs
Email,
STB
ID
Op>on-­‐1:
Using
offline
data
to
serve
targeted
TV
Ads
is
less
aarac>ve

16. Op>on-­‐2:
Using
TV
+
offline
data
for
online
&
mobile
targe>ng
looks
promising
CRM
data
Email,
zip,
prod
ID
etc
Subscriber
data
from
MSOs-­‐
Email,
STB
ID
TV
audience
data
Third
party
data
Online
OR
Mobile
targe>ng
Third
party

17. Companies
trying
to
connect
TV
data
to
online
Ads
• Datalogix
– DLX
TV
–
Use
TV
watching
behavior
to
target
online
customers
– Announced
couple
years
back
– Exclusive
partnership
with
TRA
(
subsidiary
of
TiVo)
• Experian

18. Thank
You

19. Serving
&
measuring
Ads
with
Addressable
TV
• Context
– TV
is
a
joint
watching
experience.
– Limit
products
that
apply
to
households
– Time
of
the
day
– Type
of
program
– LocaLon
– Weather
– People
do
not
want
to
get
interrupted
while
watching
the
program
so
the
interacLon
with
the
Ad
might
be
limited
• Measurement
– Long-­‐standing
metrics
such
as
Gross
RaLng
Points
(GRPs)
and
Nielsen
Network
demos
will
be
replaced
with
effecLve
cost-­‐per-­‐
targeted-­‐audience
reach
metrics

20. Benefits
of
Addressable
TV

21. TV
s>ll
has
the
highest
reach

22. Addressability
plans
of
major
MSOs

23. Willingness
to
pay
by
Ad
buyers

24. Major
media
spend

25. DBS
&
Telcos
pose
severe
compe>>ve
threat
to
tradi>onal
cable
MSOs

26. Simulmedia