I don’t think I exaggerate when I say we are at critical juncture for the advertising industry in Australia. The traditional publishing business has been decimated as advertising dollars flow to online channels, with Facebook and Google now mopping up around 60% of all digital spend globally.
In this environment, television advertising has stood the test of time through a dogged ability to deliver unrivalled levels of instantaneous cost-effective reach to help the cash tills of advertisers roll over.
However, winter may be coming for the major networks, which now stand at the nexus between defending a creaking linear TV spot business and trying to re-pivot by growing lost audiences through new on-demand digital services and competing with new competitors such as Netflix.
This has not gone unnoticed by the tech titans of Silicon Valley. While having a relatively low population, we have by far the highest advertising spend per population globally. Platforms such as Facebook, You Tube, BuzzFeed and Twitter are not new to this market, but these giants are quietly assembling their battle plans to mount a serious Daenerys Targaryen-esque assault on the TV market to claim the iron throne.
However, there is a growing concern that these media owners (to be clear, they are not technology companies or publishers) are overstating their scale and effectiveness by creating sales collateral that does not represent fair “apples to apples” comparisons.
These claims are supported by unaudited internal data where the chips can always be stacked in their favour. This has lead to an unbalanced and unsteady ecosystem between buyers and sellers.
If you don’t believe me, just look at what is unfolding in other markets.
Misrepresentation of scale
At the Digital Content NewFronts this month, BuzzFeed boasted its rubber band watermelon explosion watched by 807,000 in only 45 minutes delivered the necessary scale to warrant a seat at the table in allocation of TV dollars.
On the surface, this is compelling audience reach. When scrutinised, however, it massively misrepresents Buzzfeed’s status versus television. The standard for TV viewership is the average minute audience – i.e. how many viewers there are in an average minute’s content. Conversely, digital views are measured based on aggregate of all views, which could be only for one second. Doing the maths, BuzzFeed’s average minute audience for only one second of the video is 17,888. Not quite a ratings blockbuster.
I have been following with keen interest the very public spat between Google and Thinkbox, the TV industry body in UK. Google announced at its Brandcast event in November that advertisers should spend at least 25% of all their broadcast budgets on YouTube. Its justification was based on research conducted in conjunction with IPSOS and internal data showing advertisers could maximise their reach by allocating nearly a quarter of TV budgets to You Tube.
Thinkbox hit back hard, arguing that Google’s research was “laughable” and “self serving”. Sky Airtime Controller Jamie West went as far as to call it “utter clap trap.”
Thinkbox commissioned its own study using independent research companies such as Comscore to demonstrate YouTube represented a single-digit percentage audience opportunity. The discrepancy is not even close, which creates a real dilemma for advertisers on who to use as the “source of truth”.
Without seeing the methodology and set-up behind each piece of research (and not being a qualified researcher), it is difficult to say whose version of the truth is most believable. What I can say is that it’s simply not good governance when the inventory seller represents the measurement currency. The tools and systems that help us understand the allocation, optimisation and attribution of media dollars needs to be independent from the seller.
A question of effectiveness
Facebook globally is vocal publicly and privately in its dismay in the TV ad dollars (or lack of) it commands. There is endless free research on its website demonstrating the effectiveness of its video product.
In Australia, the number of online video streams has doubled from 3 billion to 6 billion year-on-year and 95% of this growth has come from Facebook. Again on face value, this sounds extraordinary and given this data you may think Facebook really does deserve to play with the big boys. However, Facebook has not somehow created a new TV channel (its total audience is actually back YoY) – it has simply activated a video ad unit within the feed when the user is scrolling.
Our initial data from MOAT shows single-digit percentages on Facebook video for viewability and sound unmuted. Broad reach numbers on Facebook may be comparable to television but there can be no comparison between the impact of an ad where the user has full opportunity to see the ad with the sound on versus a scrolling ad where there is limited opportunity to see or hear the message. (Oh, if Facebook tells you that its video unit has impact within a muted three-second period, qualified researchers such as Byron Sharp would question this.)
So what does the future hold for Australia?
There is some serious soul searching to be done in Australia Square and Pyrmont on how to fix the perceived drop in TV effectiveness from marketers. The audiences are not coming back and they need to move much quicker in allowing the optimisation of airtime to be more nimble than it currently is.
These automation technologies need to be open source and allow buyers to plug their own tools and data sets rather than the creation of walled gardens. Being made to log into multiple platforms is not the answer.
For the marketer and agency community, let’s ensure the attribution of ad dollars is credited correctly. This means having a fair and independent measurement methodology where media owners are rewarded for driving effectiveness. Effectiveness, defined by the opportunity for the user to see and hear creative messaging adjacent to compelling content. This will allow for brands to tell engaging stories to consumers and ensure profitable growth for all parties in the ecosystem.