An ad on Simulmedia’s website, under a section called ‘work with us’, says it is “looking for people to help invent the future of TV advertising”. It’s a provocative call to action, and one that begs the question: What is the future of television advertising?
Dave Morgan, CEO of Simulmedia, a US-based company that promises to “fix” television advertising, believes much TV advertising is “irrelevant and redundant for audiences, wasteful for advertisers and unworthy of the power of the medium to create customers”. The future of television and television advertising, he says, is going to look different to how it does today.
He says because of the growth of broadband and the increase in video production the future of television advertising will be “data-driven and audience based, not just about content, and that advertisers will use web-like targeting and measurement for their TV buys. We believe that the future will happen soon and that we have a great opportunity to shape that future”.
Morgan says while stand-alone, streaming digital video will continue to grow quickly, it will be held back in the US by some specific constraints. Like South Africa, not everyone has broadband in the home. In the US, says Morgan, one-third of the population does not have broadband in the home. “That is 100 million people,” he says. “That penetration is not expected to change much over the next few years, so that constraint will continue to hold usage back, since the best mass audience content like live sports can’t afford to rely on broadband-only distribution.
“Plus, the broadband we have in the US today – and in most of the world – cannot deliver the kinds of video viewing volumes we have on TV today, where the average viewer watches more than five hours of programming every day. I don’t think that we will see significant convergence of digital video and TV in the US until at least 2020,” he says.
In the meantime, though, Simulmedia’s mission is to work with media agencies and advertisers to find and reach specific target audiences on TV. It has “helped national advertisers and their agencies target, deliver and measure more than 200 campaigns and see results that were 25-300% better than they were able to achieve with traditional TV ad scheduling and targeting methods”. So how do they do that?
“We amassed a 50+million person panel of anonymous TV viewing data by aggregating set-top box data from cable, satellite and teleco TV providers,” Morgan explains. “We spent years and tens of millions of dollars building the software and systems to integrate our data and platform into the US TV ecosystem, and now are working with 72 national TV programmers and nine or the 10 largest TV distributors. Today, the Simulmedia Audience Network can deliver ads to more TV audiences faster than any three of the largest US TV networks combined, and do it with web-like measurement and optimisation.”
At present, the company only operates in the US, although Morgan says the platform could work in most markets around the world. “We don’t expect to move outside the US for a couple of years. The TV ad market in the US is so big – $74 Billion – that we don’t have much to gain by being distracted. Plus, the US market has a number of very competitive TV companies. Most non-US markets tend to have one or two dominant players,” says Morgan.
He says Simulmedia’s targeting is “dramatically better than the status quo in the US because our audience panel is 1000 times bigger than the status quo targeting panel – Nielsen. It makes everything we do exponentially more granular”. Nielsen is the currency of TV advertising in the US and Simulmedia incorporates their data into its systems and platform.
Simulmedia uses data to find valuable audiences in what it calls “under-appreciated spots (mid-sized and smaller rated shows, shows in non prime-time day parts) and we help the media owners monetise them at scale, by applying our data and packaging them as ‘frequent quick service restaurant diners’ or ‘in-market car buyers’. We guarantee the volume of the target audience we will deliver, much like TV networks today guarantee against sex/age demographics and gross rating points,” he explains.
Morgan says television measurement is becoming “more granular and more transparent. Agencies need to demand deeper measurements with their buys”.
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