Television’s Future Is Both Data-Driven And Linear

With the TV upfronts right around the corner, Jim Nail, principal analyst at Forrester, has straightforward advice for media buyers deciding whether to spend on digital or traditional: Buy both.

Television’s Future Is Both Data-Driven And Linear

by Giselle Abramovich

Posted on 02-14-2019

Despite the popularity of on-demand, digital TV such as Netflix and Hulu, the vast majority of people are still watching traditional, scheduled (linear) television, including the younger Gen Z and Millennial generations.

With the TV upfronts**—the beginning of the TV ad selling season—**now underway, Jim Nail, principal analyst at Forrester, has this straightforward piece of advice for media buyers deciding whether to spend on digital or traditional: Buy both.

In this exclusive interview with, Nail talks about the current state of TV ad buying, the need for better collaboration and understanding among traditional and digital TV buyers, and what the future of television advertising might look like. Is anyone still watching live, ad-supported linear TV?

Nail: That is such an inside-industry, bicoastal, tech-savvy, elite question. Unfortunately, it does reflect the perception I think many in the industry have. But go no further than the “Nielsen Total Audience Report,” and you can see that, actually, linear is still the majority of viewing. Even among the 18- to 34-year-old segment, linear is still half of their viewing. Yes, people are still watching traditional TV. What kind of role is data playing in TV ad-buying today?

Nail: It’s starting to change. Television has held out against the advances of technology and data for the better part of 20 years. Even when NBCU, Turner, Viacom, and others launched their audience data platforms three or four years ago, it took a couple of years for advertisers to warm up to it [as they began to] see opportunities to improve their linear buys with “advanced TV” or “data-driven” linear buys.

Here you evaluate the viewership of programs based on factors beyond the typical age-gender definition. Think of a diaper manufacturer buying shows with high concentrations of households with children under the age of 3, or an auto brand targeting households with an expiring vehicle lease. Once you start thinking in terms of data, buying an 18 to 34 age-gender audience just does not cut it anymore. That’s where addressable TV comes in, where you serve different ads to different segments, right?

Nail: Yes. There are two theoretical advantages, which I think are still waiting to be proved out. One is the targeting advantage. Now, the disadvantage of targeting, of course, is scale. TV has always been skewed toward that mass-reach, large-scale communication. If they go to a more targeted strategy, can they still achieve their business goals and brand lift goals? That’s still kind of in an experimental stage.

The other theoretical advantage, confirmed by early research and it’s a little bit of common sense, is that anything on demand probably has a higher level of attention than anything on linear. People are sitting down and deciding what they want to watch tonight. They’ll go search that out on their Hulu, or their network app, or something else. Then they’re more likely to have their eyes on the screen for a higher percentage of the time. So, therefore, the advertising in it will be more valuable. Addressable TV is not really a new concept. What do you think is holding it back from becoming more mainstream?

Nail: We’re stuck in this intersection of two different delivery mechanisms of television that require two different thought processes. If you only have one thought process, whether it’s the digital or whether it’s the traditional, if you try to apply one of those thought processes to your total buy, you can’t do it. It just doesn’t work.

We’re still waiting for the day when there will be media buyers who can comfortably operate in both of those worlds and think holistically about a plan. They will plug in a piece of linear and a piece of this addressable, streaming OTT buy to make a holistic plan that will achieve their communication and business goals. How is all of this advertising being measured?

Nail: That’s been one of the big stumbling blocks. Of course, on the linear side you’ve got Nielsen ratings, and those are measured in gross rating points. Then you have a bunch of individual impressions that you can get out of these OTT systems. We are also seeing more and more usage of the ACR-based measurement systems [Automatic Content Recognition] from folks like Inscape and Roku, where you do at least get some household-level demographics.

Then there’s the ability to put that together, but now you’re fighting Nielsen viewer demographics with the OTT household demographics, and that makes some people’s heads explode. You can’t put those two together and claim, “My overall GRP delivery is X,” because you’re mixing, to a certain extent, apples and oranges when you do that. The TV upfronts are nearly here. How should TV advertising buyers be preparing differently than for this year’s season?

Nail: Well, last year there was a lot of talk and serious piloting of this advanced TV, data-driven linear kind of buying. I suspect that will become even more integral to the upfront process this year.

For any advertiser that hasn’t wrapped their head around how to get beyond those age-gender definitions and activate them beyond that conceptual layer, start to get some understanding of how the NBCU audience system, for example, differs from Viacom and Turner and ABC. That way they can really understand when they’re negotiating for those data-driven targets. These advertisers need to make sure they’re getting as close as possible to apples and apples, considering the different data sources each network might use and how that that might lead to slightly different definitions of who their target is.

The differences exist, and you need to just understand them well enough so that you’re comfortable making that kind of a buy. What’s ahead for television advertising—let’s say, in the next two years?

Nail: First I can tell you what we shouldn’t expect. We shouldn’t expect all TV to be individually addressable and household-delivered. I still hear some of that lament from digital people, in particular. You just can’t wait for that to happen. That’s just not going to happen, certainly not in two years, probably not in five years. Maybe 10 years from now we’ll get there.

I do think I am starting to see more of the digital and traditional people starting to put their heads together and understand each other’s world view and language so that they can work together more effectively. I’m sure we’ll continue to see more of that.

We’ll continue to see a lot of work in the audience measurement space from the traditional guys, like Nielsen and Comscore, to these ACR data sets all trying to get together to improve that ability to deliver a consistent, coherent cross-platform audience measurement. It’s a very high priority for all of those parties. I think we’ll see a lot of improvement over the next couple of years.

Also, expect to see changes in the whole structure of television buying, where you’ll start with linear because that’s still the biggest audience—particularly if your demo is as broad as 18 to 49 or 25 to 54—but then you’re going to dig deeper. What am I not covering with a linear buy against that target? Let’s talk now in detail and in specifics about, from these same networks, your inventory, OTT, or in-streamed delivery.

So it’s going to be more that kind of jigsaw puzzle, and you’re going to put these different pieces in place to eventually get that full picture.

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