SAN JUAN, PR – Today, addressable TV inventory is a limited commodity that fetches a high price, and programmers and distributors tend to sell as much of it as they possibly can. But this approach won’t always increase the value of a linear TV portfolio and may even cause the value of spot inventory to take a hit.
“The cannibalization of your traditional spot business as a result of cherry-picking impressions or addressable units means you’ve increased your effective CPM, but you haven’t increased your top-line revenue at the end of the quarter or fiscal period,” says Ashley J. Swartz, CEO of Furious Corp.
To optimize the value of their entire portfolio, traditional TV sellers need to develop a better suite of tools and applications to drive ad-decisioning instead of relying on new products to fuel revenue growth. This is especially important when new offerings like addressable are rolled out; sellers need to be aware of the pricing implications for their existing inventory.
Ad-decisioning is gradually becoming more data-driven, though the “if greater than” rule often still prevails, meaning the available inventory that can fetch the highest price is served by default. (That’s how sellers can end up over-indexing on addressable and depress the value of high-performing spot inventory.)
“We see this arc of maturation in how we’re packaging linear inventory, where today it’s really about leveraging data to drive better pricing decisions and automate existing processes like rate cards,” Swartz says. “Eventually we’ll get to a place where we’re dynamically pricing and dynamically building plans and campaigns.”
But though demand for addressability and impression-based TV buying is increasing, it’s important to remember that advertisers still also want reach and frequency.
“We all know that a spot-driven, Nielsen-guaranteed business isn’t going away,” she says.
This video was produced at the Beet Retreat San Juan 2020 sponsored by 605, DISH Media, NBCU, Roundel & Tubi. For more videos from the series, please visit this landing page.