In this guest post, Matthew Joyce (pictured below), country manager for DataXu in Australia and New Zealand, explores the effect of big data on TV advertising.
“If everyone demanded peace instead of another television set, then there’d be peace.” When the late John Lennon uttered these words, it was the 70s, when demand for a TV set was at an all-time high.
Things couldn’t be more different now – in Australia, one in seven Australians now watch no commercial television on a normal week day. In fact, we actually watched an average of two hours and 38 minutes less broadcast television each month. What’s interesting is that it’s the older Australians who are propping up those viewing figures.
So the question is: should marketers just cut their losses now, and divert ad spend to other channels? Why then is it that programmatic TV has experienced such rapid growth, with even AOL launching its own programmatic TV platform?
Here’s the thing: it’s not that Australians aren’t watching TV; it’s that the definition of TV has completely changed. While they’re giving the traditional linear TV a miss, they’re still watching it on other platforms, such as Netflix, which has a huge customer base in Australia. Close to six million, to be exact. And who can blame them?
On Netflix, you get the full TV experience but uninterrupted by advertisements. In fact, Netflix has chosen to forgo an alleged $2 billion worth of revenue it could have made from advertising on its platform – which means that these cord-cutting customers can continue to watch their programmes, safe in the knowledge that they are exempt from the reach of programmatic TV advertising.
That’s where they’re wrong.
The hard truth is that, like it or not, big data is constantly being collected.
Netflix claims to use big data just to enhance the user experience but whether other companies do the same is up to them. TV makers Vizio recently had to pay over $2 million to settle a lawsuit that it was snooping on its users and reselling data collected. However, the main issue here was that the data collection (including IP addresses) was enabled by default, unbeknownst to most users, and remained active unless you opted out of it – and that Vizio shared the viewing data with third parties.
So, while it is true that users are increasingly worried about the data creep and how much data is being collected on them, it is ultimately more about how transparently companies manage the data they collect, and if they empower users to opt-out of this should they so wish. Indeed almost 80 per cent of APAC consumers will not purchase a brand again if their data was used without their knowledge – but 82 per cent are still willing to share some personal data; the crucial part is whether the data collection was made known or not.
The reality is, that this data that is collected can do a lot – from more targeted advertising and increased cross-device reach to enhancing the user experience. With programmatic TV advertising, when these previously-unreachable viewers smugly stream video content on their internet-enabled Smart TV, OTT device, or game console, advertisers can actually extend audience targeting to this content. They would also have access to a wide range of inventory across video game consoles, streaming media players, blue-ray disc players and apps such as Hulu – and yes, even Netflix.
Crucially, all this data collection also works to the user’s advantage in the form of more relevant, personalised advertising. This would ensure that advertisers do not alienate the 61 per cent of APAC consumers who are annoyed by irrelevant ads, while at the same time continuing to delight the near 60 per cent who feel that receiving surprises from brands was the top demonstration of personalised customer experience.
Good luck expecting a fun surprise without all that data.
And what about all those people who are still watching linear TV? Let’s not forget that, amongst the 50 and above age group, time spent watching broadcast television has actually grown by at least two hours each month. Fret not – advertisers can still combine the scale of traditional TV campaigns but with the addition of advanced data targeting beyond age and gender. Better yet, with addressable TV, advertisers can actually match online audience segments with TV subscribers in order to provide deeper insights into and opportunities for TV ad effectiveness. This is audience-based buying at its best. To this end, DataXu has expanded our partnership with Acxiom, to leverage Acxiom’s third-party data for advanced TV and analytics solutions. Now, finally, we’re breaking down the silos between the various devices, truly bringing TV into the programmatic fold.
In the words of one Malcolm Turnbull, these might just be the most exciting times to be alive – so while we’re no longer demanding TV sets, suffice to say we’re still nowhere near peace. Sorry John Lennon.