Addressable is poised for massive growth in 2020. To keep you in the know, TV[R]EV will be coming at you every week with a series of new profiles and videos to shine a spotlight on this trend, continuing with this Q&A with Inscape SVP of product Zeev Neumeier.
This interview is part of our new Special Report on Addressable TV Advertising. Written by Mike Shields and Alan Wolk, with an assist from Tom Morgan, the report offers 50 pages of deep dive insight into how addressable TV advertising is bought, sold and measured, who is doing it, and where it’s headed.
Inscape’s database of 12 million opted-in households is the largest set of ACR data publicly available to the industry and we have Zeev Neumeier, Inscape’s tech chief. Neumeier founded the company as Cognitive Networks over ten years ago, and has been instrumental in guiding it following Vizio’s acquisition and rebranding.
Neumeier cringes when we ask him if he thinks that all ads will eventually be sold on an addressable basis.
“I think that you’re asking the wrong question here. The question should be ‘will you be selling advertising on outcomes or on exposure to an audience?’” he says. “Are we going to be selling TV based on pure unadulterated impressions based on some random slice of the population or are we going to say ‘I would like to reach people who have bought trucks or will buy trucks’?”
Inscape is betting that the answer will be that everyone is going to buy against a specific audience demo and that no one is going to want to just buy what the always outspoken Neumeier refers to as “random people.”
Alan Wolk: What about brands like Nike and Mercedes that want to reach future buyers or to create universal awareness?
Zeev Neumeier: I think those brands are still going to want to achieve a specific reach and frequency among a larger set of the audience. No one is going to say “give me a million impressions and I don’t care where they come from!” So understanding who that audience is is going to be is very important. You want reach and frequency for a specific population, not just a random group of people. The genie is out of the bottle on that—advertisers are going to want more granular populations versus less granular populations. So then what they want is to find a reach and frequency equation that will work against a specific segment of the audience. Sometimes that segment is large and sometimes it is more targeted.
AW: So then how does that all play out? Is everything addressable? Or will we still be selling against the entire audience for a show?
ZN: All of the above. If you’re trying to get a specific reach and frequency against a specific set of the population, then you’re going to need to start with old school buy-the-entire audience linear to reach those people. And then you are going to need addressable to round out the edges, so to speak, to catch all those people you didn’t catch with your linear advertising and to avoid all the people who’ve already been exposed to your ad the maximum number of times so that they don’t get overexposed, which would have a negative effect on your brand. And fundamentally, that’s it. At some point too, you’re going to have to link that up to other media because TV doesn’t happen in a vacuum and you want to make sure people aren’t getting overexposed because they saw your commercials on YouTube or another digital platform.
AW: So should people at the networks, who are used to selling traditional linear ads be afraid of this new future?
ZN: No, not at all. In fact, they should embrace it. I am a big fan of linear television and I think that we need to remember that storytelling is a big part of why television is so popular.
That’s why I think that we are going to see showrunners, especially on the more popular shows, dictating the types of brands that can advertise on their shows.
They’ve spent millions of dollars on these shows and carefully thought out every single shot. The film is absolutely gorgeous.You can see all the love and attention that goes into making it that way. So then I have to ask, why, after you spent so much time and effort on every single cut, cutting away to a random piece of advertising that seems to have no connection to the show?
So if I’m NBC, I should be using a persuasion architecture type of thinking and asking myself “Who is my audience? What experience do I want them to have? And what are the slots I want to monetize?”
Then I will look at each of these target audiences, and for each audience I will determine what the right type of advertiser will be. So, say for soccer moms, I might say, “I think we should have a laundry detergent commercial, followed by a car commercial, followed by a coffee commercial.”
And those spots will fit in with the actual show itself and the entire hour or half hour will feel more seamless and that means the spots will be more effective.
AW: Talk to me about the Upfronts. What happens there?
ZN: I don’t think they change very much. They evolve. If you look at history, major, jarring changes rarely ever work. But incremental changes work very well. That’s why I think that the Upfronts will evolve so that you’ll be able to buy audience segments on linear too, so that you can buy specific audiences on specific shows. Even with DAI (dynamic ad insertion) the networks are still going to want to sell their inventory in advance, which is not unreasonable. The trick is to provide advertisers with more levers to buy against without completely erasing the current system.
AW: We have some walled gardens already in Roku and Amazon and the specter of other walled gardens from Xandr and Freewheel and others. How does that all play out?
ZN: Walled gardens are not progress. Walled gardens are monopolistic moves by companies who do so because they can. And to some extent, by the way, walled gardens exist because we, in the rest of the media industry, haven’t gotten our act together to get to a level of sophistication where we can give advertisers a choice. So advertisers go to Facebook and Google’s walled gardens, because they don’t have a choice. And in TV, that will be their undoing, because if there are too many walled gardens, then they don’t really have much power, because you can just go to the next guy, and they will all fade away.
AW: Final question: How do we end all of this confusion?
ZN: The freedom to bring your own KPIs to the table is not the same as the freedom to measure things differently just for the sake of making money.
Where I think this is all heading is that the big brands that control most of the advertising on TV are going to have to call the shots. So if a brand needs to reach a specific segment, let’s call them Segment X, they are going to have to be the ones who get to define Segment X. They will have data on that audience, they will know why they are trying to reach them, and they will bring that audience to the various networks and platforms who will help them figure out how to achieve a specific reach and frequency against that audience.
The brands can also decide the form of measurement they want to use to make sure they are indeed hitting that audience—they get to pick. They want to use Nielsen data to measure it, they want to use Comscore data, some other data—that’s their right. It is not the platform’s business what the brand wants to use, either as measurement, as well as segment definition, as long as long as both sides have equal access to the data.
It’s really the opposite of walled garden because each side can look at the numbers the other is using. The platform can specify which segmentation systems they can work with and which measurement systems and then it is up to the brand to decide which way they want to go.
I think that is going to be the only way we can get ahead, because when you have companies that are spending billions of dollars on advertising, it’s foolish not to try and cater to them or they’re going to just bring their business elsewhere.
You can check out more insights on addressable in our massive new State of Addressable Advertising report.