'The Ad Supported Experience Needs to Change,' Says NBCU

"It's almost like multi-tier chess," said Kristin Dolan, CEO of analytics and data firm 605. Buyers want to know if they should buy digital instead of TV or vice versa. The answer is to look at the entire mix.

Dolan spoke at today's Beet Retreat conference in Manhattan, where major players from broadcast and online video looked at the changing marketplace to understand what works and what still needs to be done.

With any TV campaign, results don't always happen overnight, and looking at duration is more important than many realize, she said. Consumers might not make that purchase for three or four weeks. Understanding what works means participating in and paying attention to a lot of moving parts.

Much of the on-stage Beet Retreat discussion looked at the role of data in advertising. For Nancy Reyes, managing director for TBWA, data isn't limited to matching ads with consumers. Instead, data can drive creativity, as well.

"There's a big debate about whether data replaces the human connection," Reyes said. Rather than replacing that connection, data can enhance it. She showed an example of a Dutch campaign that used post office data to send Christmas cards to people who didn't get any. In that example, data helped create a real connection between people. She then showed an augmented reality (AR) campaign for the Grammys where software instantly turned a New York City streetscape into music for a few lucky Uber riders. In that campaign, data created an artistic experience that wouldn't have existed otherwise.

Data will drive the coming wave of addressable video advertising, but that wave isn't here yet. As Mike Rosen, executive vice president for advanced advertising and platform sales at NBCUniversal explained, creating an addressable ecosystem takes time.

"The lion's share of the ad impressions we deliver…are still delivered in a live linear fashion," Rosen said. It's hard to change an old and established business, and creating a model for addressable live programming requires solving multiple technical challenges while getting several partners working together. But brands need to understand that addressable is part of a larger strategy, not a strategy in itself.

"The ad supported experience needs to change," Rosen said. That means limiting commercials and serving more relevant ads.

Consumers don't hate advertising, believes Vikram Somaya, senior vice president for ad platforms for ESPN. What they hate is interruptive, irrelevant advertising. What the industry needs to move to a system where viewers believe they get value for their time. Not long ago, everyone in the ecosystem was making money, so it was hard to drive change. Now, not everyone is making money.

"[Addressable] has been right around the corner for the last 10 years," said David Kline, executive vice president for Charter Communications, providing the multichannel video programming distributor (MVPD) viewpoint. One delay has been that pay TV providers have been focused on driving subscriptions, not on delivering new forms of advertising. While they were happy to take ad money when it came, they weren't focused on it.

"It's not moved fast…but it's starting to happen now," Kline said.

There are currently 35 million addressable homes, and the cable companies and cable networks have realized they need to work together to create a system for future growth. Kline sees a sea-change going on in how distributors work with networks to enable addressable delivery.

"I'm disappointed we're not further along," Kline said, but the industry needs to put that aside and focus on creating progress.

One way broadcasters are trying to attract viewers in the face of online competition is reducing ad pods. The idea, explained Chris Ceraci, president of national video investment for Omnicom Media Group, is that a better experience will lead to greater viewer interaction and more viewing. The "holy grail," he said, is building back through higher ratings what's lost by airing fewer ads. While there's more to ad breaks than national ads, he believes the reductions taking place now will be noticeable by viewers.

The video ad ecosystem is changing and will continue to change. The challenge for Beet Retreat attendees is to drive change is a way that appeals to viewers while increasing ad effectiveness.

Troy Dreier's article first appeared on OnlineVideo.net