When PayPal For TV Arrives, Everything Changes Says Digitas’ Ashley Swartz

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December 12, 2011 – 8:00 am

Ashley Swartz of DigitasThe merging of online advertising methods, with its emphasis on direct response and calls to action, and television, with its traditional promise of reach and frequency to drive lavish spending to promote brand affinity among consumers, promises the best of both worlds – eventually. Amid all the excitement around the changing nature of marketing across TV and digital, industry executives at last week’s TV of Tomorrow conference in New York City also debated the potential threats: namely, will digital, with its endless supply of inventory, drive down the more valuable branding dollars long associated with TV’s incomparable promise of reach-and-frequency? And what exactly is the value of social TV apps, that can serve as the connective tissue between the TV and internet as users increasingly watch their favorite shows, shop and surf the web at the same time?

TVExchanger caught up with Ashley Swartz, who leads Digitas’ iTV practice, following a panel appearance at the conference.

TVExchanger.com: As digital and social media converge on consumers’ living rooms – with the TV at the center – will television advertising become more like online advertising? Or will digital become more like traditional TV advertising? Or will it evolve into some form of  it be a hybrid form of branding and direct response together?

Ashley Swartz: It doesn’t have to be a choice – television as a reach medium is always going to exist. TV is not dead and it is certainly not dying – not when people are watching 22 minutes more TV on average per month. But we now have the same challenge with television today that we have with every emerging channel: what does truly integrated planning mean for an advertiser? How do you take a core marketing message and deliver it across different screens, different constructs, to create a clear value exchange with you consumer? It's half art, half science.

How do you see the evolution of cross-marketing at a time when users are increasingly watching TV, updating their Facebook statuses on their laptops, “checking-in” to programs on their smartphones and tweeting, all at the same time?

This kind of marketing will become much more common once we're were at a place of ubiquity for the television and companion devices – and they can all interact seamlessly, no matter who a consumer’s cable provider, or whether they even have a cable subscription. When those devices will be able to talk to each other to form a truly connected home, that’s when you get to the point of a consumer seeing a product they want on the TV screen and clicking to buy it because they can. That instant gratification is what has driven the internet.

Once you have a system like PayPal in place for the TV, that’s when everything changes.

Reach and frequency are the basis for TV as a platform for branding – which is mucb more valuable as an advertising form than direct response. On your panel, you suggested that if TV continues to be viewed primarily as a reach and frequency platform, that it will hold back the promise that the connection of traditional and digital seem to promise. Why is that?

The macroeconomics of any market is that if you’re selling something based on how wide an audience you can reach and how frequently you can reach them, when you have an over-abundance of inventory, it automatically commoditizes and devalues what you’re selling.

When I said this, I was referring to supply and demand; in that constraint of supply when there is ample demand drives price and perceived value upwards. This is TV. There are only so many primetime, desirable shows, and the reason why events like the Superbowl drive such prices for spots. In the world of digital, inventory is never the issue, it is the quality of the impression and driving to an action. Hence why giving away digital inventory as a 'value add' for TV has no implications of foregone revenue for a network; they have excess of it from the start. 

Specific to your question, I believe that the tipping point is here where TV can drive measurable business value for our clients; beyond just reach. With companion devices tethered to the TV in some way, :30 spots can become the start of a conversation, not just a message to drive awareness. When brands can leverage the power of TV to drive to an action or a conversation with consumers through a complementary second screen experience, TV's ROI will skyrocket. In addition to the ability to drive to a specific action, coupling TV with a second screen enables a brand to capture and mine data about a TV audience like it never has before today. 

You were also concerned that TV sales teams might not value social TV apps and might just be offering inventory on those tools as a free “add-on,” as opposed to trying to sell ads on top of the 30-second spots or sponsorships for the shows those apps are supporting?

When broadcasters started creating websites and started to get significant traffic that served to complement their programming and primetime shows, they couldn’t figure out how to sell it. The digital team sat separately from the guys that sold broadcast ad space. So what the guy who sold the TV ad space started to do, because they had so much inventory that they could never sell it all through, they just started giving the internet inventory away.

At the end of the day, a TV spot sales will still generate the lion’s shares of broadcasters’ revenues for some time to come for the network programmers and the MSOs. Until it gets to a place where that digital inventory, either on through the smartphone, tablet or web PC, is valuable, they’ll keep concentrating those sales on where their bread is buttered.

Is Social TV inventory valuable right now?

It's incredibly valuable. However, there’s no consistent standard of measurement – nobody knows what that value is precisely. And when everybody in our industry from the advertisers, agencies and networks uses the word “engagement,” they all have a different definition. So because we don’t have a critical mass of data and meta-data, none of it is predictive yet. We don’t know what the corollaries are. If you look at the GetGlue top 10 programs versus the Nielsen top 10, you don’t know it it’s the narrative, if it’s the creative or something else. You don’t know how something is going to perform socially, and therefore, since you can’t target an audience, you can’t sell it at a premium.

The main point: TV tomorrow will be about content, not hardware. Brands will be required to build experiences, not spots, to derive value from media.

By David Kaplan

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December 12, 2011 – 8:00 am

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