The Polar Report
10 MIN

The Polar Report: Industry Insights #5

January 11, 2022

Welcome to The Polar Report, a curated view of what’s happening in the world of digital Monetisation, Audience Development and Measurement. This week we explore Heinz and Channel 4’s brand partnership, Comscore’s new audience measurement product and more!


Addressable TV driving new revenue for French broadcasters

Until August 2020, French broadcasters were prohibited from using addressable TV advertising, but now that the restriction has been lifted, its use has rapidly expanded, bringing with it new revenue streams.

This has been especially beneficial for small companies who, because of the targeting addressable TV offers, can afford to advertise on TV for the first time. For TF1, a French broadcaster, it offers the opportunity for them to sell their inventory programmatically. They hope that it will become a major part of their sales drive, with their head of digital marketing Philippe Boscher aiming for addressable TV to be their “number one tool for digital advertising.”

Addressable TV is more akin to performance advertising like what we see on YouTube. The same content can run personalised ads based on the viewer’s previous behaviours and/or location. For broadcasters, it will have a significant impact on yield, with the increased targeting capabilities driving up media rates.

We’ve already seen the impact this buying technology has had on the US market and we’ll keep an eye on how this supports growth in France.

Full article on VideoWeek

Channel 4 & Heinz combine linear, social and talent in new partnership

Heinz is partnering with Channel 4’s in-house content arm 4studio to produce an online miniseries called Flex Kitchen, a comedic cooking show featuring Heinz branded vegan products. Full episodes will appear on All 4 and the YouTube channel Channel 4 Comedy, while edited short-form clips from the show will appear on social channels.

This is a really smart partnership, leaning heavily into the digital sphere to produce content that is appealing to younger generations interested in sustainable eating, and to whom comedic content is more digestible than a standard product ad. The miniseries will also generate ad content that will feature on linear TV and All 4.

Digital revenue has often been touted as the gap filler for broadcasters who are seeing audiences migrate from traditional linear TV to digital platforms. This partnership shows how digital content can support and even grow investment in linear. By combining both the digital and traditional realms of advertising, TV broadcasters are able to provide a holistic cross-platform approach to brand deals.

It’s these types of partnerships where large broadcasters like Channel 4 can start to take market share back from dedicated influencer marketing and digital-first media companies. Anyone can produce content, work with influencers and distribute on social platforms, but only broadcasters have the heritage and established reach of a linear offering.

Full article on Campaign

Audience Development

Vox Media acquires Group Nine

Vox Media has merged with Group Nine to create one of the biggest media companies in America. It brings together a vast number of distribution partners including Amazon, Netflix and Hulu, and brands including The Dodo, NowThis, SB Nation, New York Magazine and The Verge that will reach across a variety of demographics and categories. It also bolsters their advertising offering as well as Vox Media's existing first-party data product Forte, which is especially notable given the decline of the third-party cookie and the recent push for first-party data solutions.

Consolidation is part and parcel of the media industry with no fish too big to acquire. This acquisition is a smart one built to protect and focused on IP.

It shows that media companies are conscious of the need to adapt and find alternative means of gathering consumer data in the wake of the changing cookie landscape. While there is time before third-party cookies are gone for good, it is certainly on the minds of media companies.

As for the merger itself, Vox Media is building itself an expanded network that will allow it to reach across many of the major streaming services.

That media companies are changing their content focus is now expected, with many forms of video, audio and text being made accessible on multiple platforms from TV and websites to apps.

The most valuable asset that enables multi-format and multi-distribution is IP. We saw the power that TV sitcom Friends had on Netflix and the concomitant growth of NBCUniversal's Peacock. Disney too was one of the first to remove their IP from Netflix to help drive their direct-to-consumer offering.

Content owners are fighting back against the media owners but success requires multiple IPs to cater to various audiences, otherwise a new platform will struggle to establish itself in consumers' entertainment portfolios. It wouldn't surprise us to see similar collaborations at the creator level. We've already seen early stages of this when you look at the success of The Sidemen. Stronger together appears to be the way forward for now.

Full article on Vox Media


CTV now a performance marketing channel

CTV has shifted from being perceived as merely a brand awareness channel to a performance marketing channel. Unlike linear TV, it offers the measurability of programmatic advertising, and as such it is becoming a more appealing place for advertisers to be. This Digiday article also makes the interesting distinction that advertisers are using CTV to inform their linear advertising strategies. In other words, CTV is a testing ground to discover the most effective and appealing content that can then be placed on TV.

There is now a very fine line of distinction between ads served via CTV and traditional linear TV. Both offer big screen impact in the living room.

It makes sense that clients use CTV to inform their advertising but one thing that can't be attributed is the channel association. The same ad served to the same viewer at the same time on different distribution apps or channels will not have the same impact, for not all channels have the same credibility.

TV advertising has typically provided good credibility with consumers' “it must be reputable as I saw it on TV” mentality (although this attitude may be diluting somewhat). The barriers to enter TV advertising have been reduced with CTV, and while YouTube's track record isn't great, they are working on it. It's the nature of user-generated-content platforms and mass scale to have mishaps. However, nothing will quite beat primetime ads on established broadcasters with the established consumer trust and premium perception in place.

Is CTV a performance marketing channel? Yes, if the way we're measuring performance is built on new metrics of retention, not historical performance measurement.

What's clear is that the identity of performance measurement is changing and it'll be fascinating to see where the ad dollars flow once the measurement criteria and placements are established.

Full article on Digiday

Online marketplaces are the answer to ad transparency

This article from VideoWeek suggests that the current infrastructure for digital advertising has merely been adapted from what came before, and that it needs innovation to break free from the complexity of the current systems. This should also help the industry to become more transparent. The article highlights e-commerce as a sector that could be learnt from, with advertising inventory being traded more like an online marketplace.

Transparency is the never ending saga that stifles the media industry. It's something that, as a group of publishers, agencies and buyers, we haven't found a clear solution to. It's also very unlikely to happen, given stakeholders’ competing interests.

However, the article does raise an interesting consideration as to whether marketplaces are the answer to independent media curation without the buying mechanics. Pure productisation based on fixed prices is the suggested path to improve supply and demand optimisation.

If the industry were starting from scratch this would make sense - but we're not. Media buying and selling is very much entrenched in historical relationships and value pots that will never be achieved. It's aspirational to feel we can get there but a reality check is needed.

Platforms like OpenSlate and Channel Factory have attempted to solve this problem for YouTube by providing "independent" scoring systems and content curation facilities. They will be doing their own deals with media owners and buyers that won't always be visible to advertisers. In short, this is providing a solution to generate revenue, not necessarily benefit the long-term goal.

Independent verification is required. It's why most media is bought through one of the core measurement partners: Nielsen, Comscore or Kantar. However, the methodology and transparency outside the execution is where the problems are.

We agree marketplaces are a good thing, but under agency, advertiser and supplier mindsets towards change, we don't expect to see the transparency issues improving across the board.

Full article on VideoWeek

TV advertising costs will increase by 11% in 2022

It is commonly known that digital advertising has experienced huge growth over the past few years, but what of TV? Linear advertising is experiencing slower growth than digital and as a result the cost is set to rise by 11 percent in 2022. This does not mean that linear advertising is declining however, and it remains the dominant player in the advertising world.

It shouldn't shock you to hear a media agency reportedly threatening to move ad dollars from TV due to the rise in advertising costs. It's pure self interest, as TV is still where a huge amount of margin is driven for media agencies.

What we have to consider is why the prices have increased if they are warranted. In a traditional supply and demand market, if supply decreases, price goes up. What advertisers are suggesting is that pulling demand will realign pricing, but it's highly improbable.

For every TV advertiser there are hundreds behind them looking to reach consumers; it's still the leader in advertising impact. In any market where there is limited supply of any given product, prices are set at what anyone is willing to pay. We've seen this with the eye-watering premiums for placements around the Superbowl.

Agencies are obsessed with measurement as it helps them take credit when campaigns do well and point to the data when they don't. However, they're facing difficulties with cookie deprecation and iOS14 privacy changes. So while TV advertising costs may be increasing due to supply shortages, we wouldn't be surprised if they increased further as contextual advertising demand grows.

Full article on VideoWeek