Adapting in the Data-Driven Evolution

November 1, 2014

The shifting media landscape and the need for a new approach

Traditionally, TV has been sold on a program or network basis and, beyond age and gender, has placed less emphasis on the specifics of the audience watching the program. This sales approach worked extremely well over the past 40 years, when ratings for individual programs were high and advertisers could reach the entire TV-viewing population by buying less than a dozen spots. Today, the TV landscape is far more fragmented. This has made it more difficult than ever for an advertiser to efficiently reach its entire audience through a contextual network media purchase.  

Audience-based buying has emerged as a powerful tool for advertisers to manage this fragmentation and find audiences across a multitude of networks at different times of day. Audience-based buying focuses primarily on the people watching, whereas program-based buying focuses primarily on the context of the show in which the ad runs.  

Importantly, audience-based buying is not just a boon for advertisers; it’s also a powerful solution for inventory owners to boost yield on under-monetized spots and drive new non-endemic advertisers on their networks. When harnessed properly, audience-based buying can allow linear TV media owners to recapture much of the value lost to fragmentation and can provide a useful testing ground for new pricing and yield models.  

Simulmedia, the largest audience-based linear TV ad network in the U.S., with a 50 million-viewer platform, partnered with Fox News to test an audience-based approach to monetizing Fox News’ inventory. The companies have found that their two-year inventory partnership has been fruitful for both sides. Fox News, which has a forward-looking view of TV advertising, has witnessed a significant increase in the value of its previously under-monetized inventory and has added new, non-endemic advertisers to its portfolio. Simulmedia has been able to secure reliable access to high-value audiences and increase its inventory footprint. “Over the past two years of working with Simulmedia, Fox News and Fox Business have been given strategic access to the technology that is coming to support audience-based TV advertising,” says Paul Rittenberg, executive vice president of advertising sales at Fox News and Fox Business. “We have been able to get not only higher yields on our inventory but have also been exposed to new brand advertisers who may not have previously thought we were a good fit. These advertisers are able to see the value of our viewers through the data that Simulmedia has been able to unlock.”

As the TV environment shifts to these new forms of advertising and ad sales, pioneers like Fox are able to take a more modern, digital approach to their business. Real business benefit to all has been the result, and it’s only the beginning of this data-driven evolution of the TV advertising business.

Jason Moe is the director of partner relations at Simulmedia.

Source

"Adapting in the Data-Driven Evolution." Jason Moe, Director of Partner Relations at Simulmedia. ANA Magazine Spotlight. November 2014.

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