{"id":28410,"date":"2018-11-12T11:20:19","date_gmt":"2018-11-12T16:20:19","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/viacom-transforming-television-with-targeted-ads\/"},"modified":"2018-11-12T11:20:19","modified_gmt":"2018-11-12T16:20:19","slug":"viacom-transforming-television-with-targeted-ads","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/viacom-transforming-television-with-targeted-ads\/","title":{"rendered":"Viacom: Transforming Television with Targeted Ads"},"content":{"rendered":"<p><strong><u>Programmatic Advertising: TV Audiences Meet Digital Targeting<\/u><\/strong><\/p>\n<p>In the TV Advertising space, Nielsen ratings have long reigned supreme.\u00a0 Advertisers pay for viewers in certain demos who often represent only part of the total audience, leading to inefficiency and waste. \u00a0However, the rise of the Internet has produced a new way to reach consumers.\u00a0 Digital advertising\u2019s personalized and targeted approach has many advantages, yet television remains the preferred medium for many advertisers due to its broad reach and demonstrated ability to monetize audiences.<sup>1<\/sup><\/p>\n<p>As live TV ratings erode due to time-shifted viewing and online streaming,\u00a0 Viacom is embracing new trends in advertising in order to better monetize viewers.\u00a0 One example is the growing megatrend of programmatic advertising: data-driven TV buying that unites the reach of television with the targeting of digital and uses software instead of people to optimize ad buying.<sup> 1<\/sup>\u00a0 By collecting cross-platform data on consumers\u2019 television viewing, internet searches, and other relevant information, programmatic advertising enables buyers to target precise audiences with personalized ads.<sup> 1<\/sup>\u00a0 For example, Viacom is able to identify and reach 18 \u2013 35-year-old females interested in purchasing a car who make at least $150,000 annually and serve them targeted TV ads.<sup> 2<\/sup>\u00a0 Combining television\u2019s large audiences with detailed viewer data results in a highly personalized experience that delivers accuracy and efficiency for advertisers\u2019 favorite medium.<sup> 1<\/sup><\/p>\n<p><strong><u>Viacom\u2019s Short Term and Medium Term Initiatives<\/u><\/strong><\/p>\n<p>Today, a majority of Viacom\u2019s advertising is still via traditional methods.\u00a0 Nevertheless, Viacom\u2019s management has taken several steps to increase its use of programmatic advertising in both the short and medium terms.\u00a0 Management\u2019s overall goal is to better monetize viewers of Viacom content across all platforms and to increase the value of the entire TV ecosystem.<\/p>\n<p><strong>In the short term:<\/strong><\/p>\n<ul>\n<li>Freewheel Partnership: Viacom and Comcast\u2019s Freewheel announced a deal to partner together on advanced advertising and data in April 2018.<sup> 3<\/sup> The partnership combines Viacom\u2019s deep knowledge and strong connections with both advertisers and audiences with Freewheel\u2019s sophisticated advertising technology to create a platform that allows marketers to reach consumers in a more efficient, accurate manner.<sup> 3<\/sup><\/li>\n<\/ul>\n<p><strong>In the medium term:<\/strong><\/p>\n<ul>\n<li>Viacom Vantage: In 2015, the company launched Viacom Vantage\u2014a data-driven product that enables marketers to reach custom segments.<sup> 4<\/sup> In using cross-platform data to understand how specific customers watch content, Vantage predicts which shows on MTV, Nickelodeon, etc. will capture the most value for clients.<sup> 5<\/sup>\u00a0 Vantage also provides operational and inventory management so that each client receives a customized media plan tailored to its advertising needs.<sup> 5<\/sup>\u00a0 In August 2018, the company licensed its Vantage product to 21<sup>st<\/sup> Century Fox in its growing effort to transform the entire television advertising industry.<sup> 6<\/sup><\/li>\n<li>Open A.P.: Finally, in 2017, Viacom, Fox and Turner Broadcasting formed a partnership and created a new platform called Open A.P.<sup> 7<\/sup>\u00a0 Open A.P. provides advertisers with standard sets of data when targeting specific customer segments such as frequent moviegoers or pregnant women.<sup> 7<\/sup>\u00a0 ComScore\u2019s set-top box data and Nielsen ratings information from all three companies are combined on the platform to create the data sets.<sup> 7<\/sup>\u00a0 Advertisers can then reach consumers by buying cross-platform media plans through any of the participating companies.\u00a0 Open A.P. is attempting to standardize data sets across the TV industry and create a new advertising currency.<sup> 7<\/sup><\/li>\n<\/ul>\n<p><strong><u>Additional Recommendations<\/u><\/strong><\/p>\n<p>While management has made recent strides, programmatic advertising still represents only 3% of the total TV ad market.<sup> 2<\/sup>\u00a0 To stay ahead of the curve on this growing trend, Viacom needs to double down and aggressively expand its programmatic advertising sales and capabilities.<\/p>\n<p>In the short term, Viacom should explore partnership opportunities in the connected TV market.\u00a0 Connected or \u201cSmart\u201d TVs capture a lot of consumer viewing data not only from set top boxes, but also from apps and websites visited by any device connected to the same WiFi network.<sup> 8<\/sup>\u00a0 Viacom should talk to market leaders such as Samsung or VIZIO about partnering to use this technology to serve its entrenched advertiser and consumer base.\u00a0 If Viacom was the first traditional media company to play in this space, it could develop a first mover advantage.<\/p>\n<p>In the medium term, the company should set the goal of reaching 20% of all ads sold being done so through programmatic advertising by 2022.\u00a0 Tactically, management should drive this increase by selling more of its prime-time ad slots through data-driven advertising instead of the traditional method.\u00a0 Unless you seek to disrupt yourself, it is likely that someone else will use innovation to disrupt you.<\/p>\n<p><strong><u>Important Questions<\/u><\/strong><\/p>\n<ol>\n<li>How can Viacom continue to increase its reliance on programmatic advertising when it requires buy-in from advertisers, many of whom still prefer Nielsen ratings?<\/li>\n<li>In the future, will there still be a market for broad advertising campaigns aimed at all adults, such as Super Bowl Ads? Or will television advertising become entirely personalized and targeted?<\/li>\n<\/ol>\n<p>(Word Count: 781)<\/p>\n<p><strong><u>Sources Used<\/u><\/strong><\/p>\n<ol>\n<li>David Abecassis, Yuliya Guitard and Dr. Michael Kende, \u201cConvergence of TV and Digital Platforms: Increased Innovation and Competition for Advertisers\u2019 Budgets,\u201d Analysys Mason, December 21, 2017, via Business Insider Intelligence, accessed November 2018.<\/li>\n<li>MediaPost, \u201cProgrammatic TV Future Coming Into Focus Slowly, But Surely,\u201d May 7, 2018, via Factiva, accessed November 2018.<\/li>\n<li>FreeWheel, \u201cViacom and Comcast Announce Advanced Advertising Partnership,\u201d April 23, 2018, http:\/\/freewheel.tv\/viacom-and-comcast-announce-advanced-advertising-partnership\/, accessed November 2018.<\/li>\n<li>Business Insider, \u201cWhat You Need to Know in Advertising Today,\u201d August 10, 2018, via Factiva, accessed November 2018.<\/li>\n<li>Viacom, \u201cViacom Unveils \u2018Viacom Vantage,\u2019\u201d April 29, 2015, https:\/\/news.viacom.com\/press-release\/ad-sales\/viacom-unveils-viacom-vantage, accessed November 2018.<\/li>\n<li>Viacom, Q3 2018 Earnings Call Transcript, via ABI\/ProQuest, accessed November 2018.<\/li>\n<li>Brian Steinberg, \u201cTurner, Viacom and Fox Debut \u2018Open A.P.\u2019 Ad-Targeting Plan to Broader View,\u201d Variety, April 7, 2017, https:\/\/variety.com\/2017\/tv\/news\/turner-viacom-fox-open-ap-advertising-digital-targeting-1202026262\/, accessed November 2018.<\/li>\n<li>Alan Wolk, \u201cWhy ACR Data is Poised to Become the Future of TV Measurement,\u201d Forbes, February 19, 2018, https:\/\/www.forbes.com\/sites\/alanwolk\/2018\/02\/19\/why-acr-data-is-poised-to-become-the-future-of-tv-measurement\/#501d9f011821, accessed November 2018.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"<p>Can programmatic ads combine the reach of television with the targeting of digital to change the face of TV Advertising?<\/p>\n","protected":false},"author":11473,"featured_media":28417,"comment_status":"open","ping_status":"closed","template":"","categories":[4323,346,145,518],"class_list":["post-28410","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-advanced-advertising","category-machine-learning","category-media","category-television","hck-taxonomy-organization-viacom","hck-taxonomy-industry-media-and-broadcasting","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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