As the upfront markets approach, the media landscape has never been more complex.
There are many questions surrounding both the long-term future of the television business and the short-term decisions advertisers will make. Answers at this time of year can be in short supply.
B&C has arranged to get some questions answered by one of the most knowledgeable and well-regarded executives on the buying side of the negotiating table: Dave Penski, CEO of Publicis Media Exchange, which is among the largest spenders of the giant media agencies.
In this installment, Penski fields questions from B&C business editor Jon Lafayette. Email Lafayette at jlafayette@nbmedia.com if you’ve got questions you’d like Penski to answer in the coming weeks.
Related: Ask a Buyer: Your Upfront Questions Get Answered
An increasing amount of TV is becoming non-commercial, like Netflix or HBO. What can advertisers do to help create an environment that creates an experience where consumers are both entertained and receptive to commercial messages?
This is something I feel really passionate about. I think we have a very bad customer experience right now with a lot of ad-supported video, and that is both traditional and non-traditional.
We are not giving the consumers a very good exchange for what they're doing for us and what we're doing for them. And we are encouraging them to either go to subscription, like Netflix or HBO, or we are pushing them into a situation where they're using ad-skipping technology or both.
We're talking to some partners right now about how do we start improving that.
Here's an example of how we start improving that. If you look at the increased usage of VOD, it's dramatic over the last couple of years to the point where those numbers are starting to really matter. If we said if you want to binge watch—my wife and I are binge watching This Is Us—you could say to us you could watch each episode that will cost you $2. Or if you want to, we'll show you four commercials that we're going to target for you, and we'll only charge you a dollar. Or you'll watch 10 commercials per episode and it will be free.
And in doing that we are now having a value exchange with the consumer. I think the first place to do it is in VOD, which already accepts money.
But I don't think cutting the number of messages in half and trying to charge double is the be-all, end-all answer.
I think the person in the industry that's doing a good job at this is Joe Marchese at Fox. He talks a lot about attention, and they're looking at commercial loads. I think all of them are in this discussion. NBC with Linda Yaccarino and Joe are probably two of the people I hear most discussion about this from.
The one who has done the most is probably Turner, which cut the commercial load on truTV, and you're seeing an increase in ratings. I look at those three vendors as doing the most today, but everyone is in that same place.
That's something I'm hoping to see in this upfront, and as I'm going to different upfronts and seeing people, a question I would ask every single one of them about [is] what are they doing to make a better customer experience.
You talked about focusing on VOD, but is there enough scale to make it worth the effort to do the research and the negotiations?
It is growing at over 100% a year so I think scale is there, and if you start looking at where we're losing consumers, I don't think there's any question that there's an upside here. Also, if you start looking at how the consumer is using Netflix and HBO, it's purely video on demand, so you have to have a product that's going to compete with them.
I would agree that the amount of VOD is less than 10% of my total viewing experience, but if you had a better product that was more consumer focused, that would be great. Right now, the fact that you can't fast forward, the fact that they're not dynamically inserted ads, it's a pretty rough customer experience, especially as you compare that to Netflix or HBO or any subscription-based product.
I do think we need to reduce ad loads, but I think if you gave them an option—I think Hulu's a good example of this.
With communications plans and media strategies becoming more 360-degree oriented, do campaign goals go beyond driving sales?
I think the simple answer is everyone is trying to drive sales, absolutely. But I think that because we're able to do more research on our consumer, more data on our consumer, and we have a more distracted consumer, we're realizing we need to do these things.
So we're looking at consumers seeing a few thousand messages per day. We're seeing the fact that we have the ability to track them from an ID standpoint from a mobile device to a display to a car to a home to in-store. The ability allows us to really look at things 360.
I was just meeting with a [retail] client who sees a huge amount of their traffic overlap with another retailer, which is not competitive at all. They're seeing their retail competition overlap and thinking, that's interesting. How do we start looking at their shared consumer audience, and why are they interested in our products right before and right after looking at their direct competition?
They got a lot of insights because they were able to track those customers and message them in mobile, even outdoor and follow them into display and precision TV spots.
They were able to do it. We were able to traffic it, and we're starting to have much stronger measurement that allows us to look at the value of that consumer and the value of the model for reaching that consumer.
We've been doing 360 for 20 years, but I think you're seeing that more and more in the last 2 or 3 years as you're getting that unique device ID. We always struggled to go from mobile to display to in-store, and now we have such an ability to track that consumer across devices it is allowing us to do that much better.
