TORONTO – CRTC vice-chair broadcasting Tom Pentefountas told Toronto’s broadcasting and advertising community this week to stop leaving money on the table and get on with addressable, targeted advertising already.
A big fan of shows like Mad Men (the vice-chairman said Thursday morning he was still dejected the series had concluded), Pentefountas noted both the massive amount of quality TV out there, and that the viewers are now in the driver’s seat when it comes to viewing options – something to which the industry has not yet fully responded, he added.
Pentefountas gave the sold-out audience of 200 at the inaugural Future TV Ads conference (which Cartt.ca was the media sponsor) a quick overview of the CRTC’s TV Policy Review process (of course, dubbed Let’s Talk TV), while expanding on the themes important to the advertising sector. Both the buyers and sellers were on hand to hear the message.
In his half-hour presentation, he drew the connection between: the CRTC’s policy changes which the Regulator hopes will spur the production of better quality product rather than quota-driven “tonnage” of TV, he said; the shrinking ad dollars going to linear off-air TV (down 7.2% annually in the CRTC’s latest release) and how that means less money for the production of Canadian content over time; and how the promise of money coming back to TV through programmatic buys or targeted, addressable ads, if only the industry would work together and build something.
“The idea is to create this virtuous cycle because investments to create better content will bring more value to the television system and this generates more revenue to reinvest in content made by Canadians,” said Pentefountas.
(Ed note: It’s worth noting the shift emanating from the CRTC these days where they are sometimes saying “Content made by Canadians”, rather than “Canadian content”. It’s part of a change in the Regulator’s overall thought process to think more about quality programming made here, sustaining an industry here, and that is good, entertaining TV “that just happens to be made by Canadians,” said Pentefountas later in his speech.)
The vice-chair is a big believer in adding aggregate set-top box viewership data to the various reams of other data already used by broadcasters and advertisers from Numeris and other sources such as retail sales datasets, direct mail firms and so on. This data shows (again, in aggregate, so that no one can track what individuals are watching hour by hour) a more accurate picture of the viewing patterns within households – and marrying that data with the others will help the industry directly target, for example, which households are most likely to be in the market for a new pickup truck and serve correct ads directly to them.
In the United States and Europe, companies are having much success with addressable ads. Statistics (which we’ll show on Cartt.ca in follow up stories) reveal viewers tune away less when they see a relevant ad compared to ads that mean nothing to them, and that direct lines can be drawn from serving addressable ads, targeted to the right homes, and immediate retail sales.
“Think about the money we’re all leaving on the table.” – Tom Pentefountas, CRTC
Plus, while targeting one demographic with a certain type of spot, other demos can be served different ads simultaneously, meaning the monetization of the same ad slot can be multiplied, while advertisers pay extra (how much extra has not been determined) for more precise targeting. Modi Media, a division of Group M, that only does addressable ads in the States, has had sales of $60 million so far this year, said its president Michael Bologna.
All that said, Pentefountas asked why the Canadian industry hasn’t moved in this direction yet (unsurprisingly, it has to do with money and co-operation because the technology is fully baked, and we’ll get into it more in a follow-up piece) and why the CRTC was forced to take action.
Addressable, targeted ads and programmatic buying are “all promising tools for your sector to help you achieve an appropriate return on your investments while freeing you up to spend more time working with the creative side of your brains,” he said.
And with “30 cents on every dollar that’s measured and monetized” going to Canadian content, which of course feeds the Cancon requirements of the Broadcasting Act, it’s a cultural imperative for the industry to act on boosting their own bottom lines. “There are companies (in the U.S.) tracking return path data from a set top box. Why aren’t we taking advantage of that?” asked the vice-chair.
“Why does it take the regulator to put so much pressure on the industry to move on this issue?” he added, referring to the new set top data working group the Commission forced the industry to set up as part of its Let’s Talk TV decision.
“Think about the money we’re all leaving on the table.”
Relying on simsub “a very dangerous business model”
VICE-CHAIR PENTEFOUNTAS also spoke about simultaneous substitution, something very near and dear to the crowd of advertisers and broadcasters. Despite the fact many in the room are opposed to the decision of the Commission to ban simsub in the Super Bowl beginning after the 2016 season, he stuck to his guns.
He quoted a study done by Armstrong Consulting for the Let’s Talk TV proceeding which said Canadians view an average of 9.7 million simultaneously substituted hours per week in 2012-13. “Clearly, the three hours spent broadcasting the Super Bowl represents a minuscule amount of the total opportunities for TV advertising in Canada,” he said.
He also urged those in attendance to “create clever and entertaining ads… (then) viewers will want to tune into the Canadian feed to watch the game.”
“It would be unwise to rely on simsub indefinitely.” – Pentefountas
While noting the CRTC has no plans to kill off simsub anywhere else but the Super Bowl, the changing patterns of viewer behaviour are driving the contents rights market to a more global focus and will put the profits earned by simsub under increasing pressure. “It would be unwise to rely on simsub indefinitely,” he said. “The day will or may come where it will no longer be a useful or necessary tool to protect Canadian broadcast rights.”
Additionally, as Cartt.ca has explained here, it is getting much more expensive to secure the rights to all platforms as the content owners assess where they can get more bang for their buck. Or, knowing that Canadian media companies are desperate for all rights windows, they are hiking prices.
That means, to Pentefountas and others, that producing your own excellent content is the key to the future, not simsub. “I think we can be just as creative on the content front and on the advertising front as our colleagues south of the border, Europe or elsewhere,” he said.
“I think it’s a very dangerous business model to be renting this content and be dependent on that content to allow you to meet your obligations and your bottom line.”
