How TV ad buying will change in 2018

Hi everyone. I’m here to talk to you about TV buying – so traditional TV buying – and why this year could be a fundamental change into the way TV is being bought.

Advertising before digital

Now to do that, I’m going to take you in a little bit of a journey, I’m going to reminisce to back in the day, when I was a little cheeky chappy between the age of 18 to 21. I used to work at Express Newspapers, that was first on Black Friars Bridge, and then was in Lower Thames Street so, both in London. Back in those days, I didn’t need the beard because I didn’t have a double chin, and I didn’t need to hide it. I often got the tube with my mum, very different to now. I almost put a picture in, but I thought I’d embarrass myself a little bit too much!

My job, working in newspapers for Express, there was many different titles but, I mainly worked in the classified advertising section. It was interesting because I was often dealing with the same West End media agencies, whose job it was to divvy up advertising spend. My job was to convince them that for their market or for what they’re trying to achieve for a client, that Express Newspapers was right for them or whether it’d be the Daily Star, even OK! Magazine. So, I was in constant communication.

But, if you think about these agencies and what they need to do and these buyers, they’ll be getting briefs from clients and then they’ll be deciding how they divvy up the media budget for many different areas. This a lot more complex in our modern day, but back then, you’d consider newspapers – if it’s mid-market, you might consider Daily Express, Sunday Express. You might look at associated newspapers, so Daily Mail, Mail on Sunday, in terms of similar target audience, but then you’ve got to consider the likes of outdoor. So, they’d have really good relationships with the likes of Clear Channel, which is a major outdoor provider. You’d be considering radio, and also what my talk is mainly around, around TV.

The problem with wastage

But, the one thing that’s consistent in all of this…and just to put it in a bit of context, if you’re planning, if you’ve got a big budget, and you’re planning a big campaign, and you’re looking at a slot – for example, with Coronation Street – you’re going to hit a huge audience. But what’s acceptable in all of these cases back then – and it’s a long time ago when in was 18 to 21 by the way – there’s going to be wastage.

Yes, there’s going to be many eyeballs on your campaigns, on your creative, but so many people that are relevant to your brand and that are potentially not going to purchase.

So, why am I talking about this change in today? What’s kind of driving that talk? And if we look at that, it’s fundamentally technology.

How technology has changed media buying

So, technology and how it’s advanced is changing this landscape as we speak, and this year’s going to be fundamental for that.

Now, what I’m talking about here is, just look at the way we typically trade media. So, it’s our understanding, a lot of understanding for clients is, when they think of Display, they think of things like re-targeting. They think of Google’s display banners and just ads around a website. But, technology is advancing so much in terms of what we can buy programmatically.

Sky AdSmart

So, an example of this is, we’re as an agency very familiar with these guys, but a lot of people aren’t. Sky AdSmart have been around for more than three years now. They’ve been doing this and advancing their product and let me just talk to you about what Sky AdSmart actually is.

Just taking a step back. Seven million boxes. We’ll talk about different targeting attributes but, in terms of what they consider as viewability, when you see an advert on one of their platforms, when they count for it in terms of you actually paying for that impression, someone has to have viewed 75 percent of that content.

So, if we actually talk about audience targeting, the way that you actually work with something like Sky AdSmart; you’re not broadcasting to mass. You can overlay it with so much audience data. So, for example, they have access to many different data sources: Experian, Mosaic data. If you’re a car insurance provider, so you’re one of the big players, they will know how many cars are in your household, the age of people in your household. Also, more importantly, when your car insurance is up for renewal. So, they can target you based on that information. They can overlay it with: “Okay, we know for our audience, we convert best in these locations”. There’s so much. They can get so granular on how they target you, so they’re not just broadcasting to the mass, and they’re cutting all of that wastage, which is really important.

Even the frequency that you see it and how quickly these campaigns can go live is just very different to the way we would typically plan. Comparing that, so if you look at linear TV against Sky Ad Smart, if we just put this into perspective.

How TV advertising has changed

So again, taking you on a bit of a journey and there’s a bit of a plug now into me personally.

2005: you probably remember where you were when Liverpool were playing the Champions League final against AC Milan? Three nil down at half time, I wasn’t watching this on TV because I was there by the way! Just a little bit of a … Watching Liverpool in the Champions League for the fifth time that might be. But, if you’re at home you’re lucky enough to watch it on ITV or Sky Sports, you’d have all seen the same ads. Like, if you were watching it on the same platform, you would have got exactly the same experience.

Now, good news is, Liverpool are still in the Champions League, I hope when people at home watch this content, we are still in it as well, or we’ve won it, but the difference is, if you’re watching it on Sky this year, or if it’s published on Sky, you could get a very different experience. That’s a good thing, because it should be relevant to you. It should be companies that you like, or you’re likely to engage with. So, that is fundamentally the difference. It’s going to be personalised, and it’s based on data in terms of how people are buying this media.

Again, it talks about the cost per thousand is lower. And it is, but there’s so much wastage, so you are going to pay more for impression, but you’re not paying for people that you don’t want to reach. So actually, in effect, it’s far more targeted and actually cheaper.

Analytics as well, there’s not much data you get on traditional TV media buying. Yes, you can assess how much the phone’s picked up etc., but the data you get on this is far and beyond, so you can properly start to test.

Why is 2018 the year everything changes?

Now, I’ve talked about why this is the year this changes forever. I’ve said Sky AdSmart has been around for a number of years, and it has. There is more awareness around it, but if you look at some of these players, and John’s done a brilliant talk on TV – John Shepherd from RocketMill.

But, there’s two other major buying houses here in terms of ITV and Channel Four. ITV is roughly around the third of the market. Now, look in the media. There is so much content about what they’re doing at the moment because the pressures they’re under, they are partnering with technology providers to be able to offer their inventory programmatically, so similar to Sky AdSmart. That is happening this year.

Now, there’s not going to be a huge shift into all of that money going straight onto those platforms this year, however it is going to be possible, so we’re setting the foundation that there’s going to be a big shift in the next couple of years.

Furthermore, this talk’s around TV. Look at Clear Channel, I talked about them earlier. Huge outdoor provider, you will programmatically be able to buy outdoor as well, and that’s already been tested in certain territories as well. And that is something that’s coming this year.

How these changes impact the market

Now, okay, all this change, is it having an impact? Or what impact will it have? I went back to working with big agencies. Now, back in those days, it was the same agencies I worked with all the time. You’d have the likes of Mindshare, you’d have the likes of Carat, MEC. There’d be so many agencies that we’d speak to, and it’s typically, they’re looking after the same advertisers as well.

Now, if you look at the pressures this puts those agencies under. The barriers to entry were really difficult. An agency like RocketMill didn’t have enough buying power to even enter that market and buy a TV for people. These deals are done around power. So, Mindshare would sit with you and it would go something along the lines of, they buy the most TV, they buy the most print, radio, etc. They can get the best rates, they can get the best spots. They earn from the advertiser, they earn from the TV in terms of how much they are going to be spending. We just can’t even enter those conversations, because we don’t have the buying power. It stays with those same agencies.

If things are going to be able to trade programmatically, so like how we bid on display etc now, and John talked about in his talk that if you go to Facebook, if you go to it and one person’s got a £1,000, one person’s got £100,000, it isn’t going to make much difference. It’s all biddable, it’s bought in real time. That argument doesn’t happen.

What we’re seeing is, these network agencies, the likes of WPP, MEC and Maxus, have merged. What’s happening is, these traditional type of agencies, that argument doesn’t work anymore, so they need to become a performance agency. They’re bolting on the performance arm of their business, in order to be able to offer clients what they’re going to need moving forward and actually what they need now. Dentsu Aegis acquired Merkle, we all know Merkle acquired Periscopics who are, again, a performance agency. Neo Ogilvy folding into Mindshare.

These are fundamental changes and if you look online at the likes of WPP, their agency, if you look at all the different agencies, their staff is bigger than the population of Brighton. There’s so much consolidation going on and have a look at their share prices. This is one of the drivers behind that, in the change in technology in terms of these restructures.

But also, marketing teams. If you look at some companies, every company we deal with is going to have slightly different internal structures. Sometimes you’ve got a marketing team, sometimes you’ve got digital teams, brand teams. If you’re thinking about marketing teams and what they would traditionally buy, they would buy print, TV … If this is going to be traded programmatically, then those departments need to just become marketing departments. We’ve talked about that for a long time and we are going to see an impact.

And also, competition changes. We’re talking about big budgets. You have to have big budgets to be able to complete on TV in the past. Something like Sky AdSmart, you can spend five grand a month, it’s not huge barrier to entry. And competition changes as well, because we talked about overlaying it with local information, these don’t need to be big national players, these can be people operating just at a postcode level in terms of what they’re advertising and overlaying that with the likes of Mosaic data and being very, very targeted in terms of who they’re reaching. We are going to see different people. Yes, you need creative etc., but this will change the type of companies we see on TV essentially.

TV in 2018

So, what is the key take away? I think, for the big companies, we’ve been in meetings where it’s actually been said, that the marketing team say: “The board just say X percent needs to be spent on TV each year”. But we just know it’s very rich content, we just need to spend that. And it just happens year after year after year. So, I’d encourage for companies like that, you’re still buying TV, just look at the way it’s being bought and start to put a tiny percentage or a small percentage at least, to testing programmatic TV and look at the results. Look at the results, you’re going to be far more targeted and you’re still buying TV.

Also, for the smaller companies, if you’re looking at display and you’re looking at programmatic and you’re testing these different things, consider testing the likes of Sky AdSmart. The barrier isn’t huge but there’s so many more things in terms of possibility and you can get the analytics in terms of actually looking at the results.

Thanks very much.