Simulmedia’s Morgan: Expect Media Buyers To Turn Off Ad ‘Firehose’ In 2012

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January 3, 2012 – 8:00 am

Don't hold your breath when it comes to seeing targeted TV ads on a par with the internet this year. But that doesn't mean the industry isn't going to get a lot closer this year, particularly given advances in analytics.

Simulmedia, one of the companies founded on the notion of bringing online media buying methods to TV, believes research it did using by Nielsen AudienceWatch that compared summer movie sequels aimed at parents and kids clearly shows the benefits of targeting viewers over efforts that just focus on placing ads across a general primetime audience.

Although it seems self-evident that targeting ads to specific audiences -- say, parents with kids or frequent movie goers -- as opposed to a mass audience would probably produce better results at the box office. But the problem isn't whether or not to target certain TV viewers. The problem is whether it's effective or not, at least in to the higher level of cost involved.

In a conversation with TVExchanger, Simulmedia founder and CEO Dave Morgan pointed to a study the company conducted with its anonymous viewing data on 30 million viewers, including Nielsen's national panel data, recently examined the audiences that were reached with ads for this past summer's Kung Fu Panda 2 and Cars 2.

Both movies ultimately did pretty well. But Cars 2 appeared to do a little bit better than Kung Fu Panda 2, especially during the crucial first weekend. Overall, Cars 2 earned a total of $191,446,625 in U.S. theaters, while Kung Fu Panda 2 brought in $165,249,063, though it did slightly better thanks to foreign box office receipts.

Morgan is quick to note that Simulmedia had nothing to do with the media buys for either movie, and as such, has no specific knowledge about the decisions to target or not. But looking at Nielsen's data, it would be surprising to think that a greater level of targeting wasn't put to work on U.S. audiences by the buyers behind Cars 2.

As the report shows (see slides below), the audience for each fell into highly-designated audience groups. And they were all reached at a similar level with largely the same number of ads. By and large, a small segment of the audience received an outsized portion of the ads. For example, roughly 20 percent of "Adults 18-49 with kids" and "Frequent Moviegoers" tended to get the majority of the ads.

Reach and Frequency Distribution for Cars 2:
Ages 18-49 Kids & Frequent Movie Goers
(Click To Enlarge)
"The way most ads are distributed on TV is like turning on firehose," Morgan says. "Most kinds of people tend to get the same ads, whether they go to a lot of movies or not. And a small group – heavy TV viewers, as opposed 'frequent moviegoers' or another specific segment – tend to get most of the ads. Even though the industry is using a firehose to get their ads out, you would think ads would be delivered in a balanced way. But they’re not. They’re being distributed indiscriminately and not at all balanced across various audiences."

Fifteen years ago, before the cable network viewing became fully mainstream, the firehose approach provided pretty good distribution. But today, with audience fragmentation, it only leads to missed opportunities and a lot of waste, Morgan notes.

To be sure, a lot of things go into a successful theatrical release, much of which (timing of the release and its competition that weekend, critical reviews and pre-release buzz) is beyond the purview of broadcast media buyers.

In the chart Morgan showed me of Kung Fu Panda 2's reach and frequency distribution, most of the categories, such as viewers who saw the first Kung Fu Panda didn't look too dissimilar from the Adults 18-49 with Kids category or the K6-11 column. In contrast, Cars 2's reach and frequency distribution shows a good deal of differences among how often ads for those movies were viewed.

By itself, these numbers don't prove the value of targeted ads. But as the economy limps along and marketers' demands for more accountability from their ads continues to rise, the movement towards greater targeting -- even if it's not quite akin to cookie-based web ads -- only seems more inevitable this year.

Reach and Frequency Distribution for Cars 2
(Click To Enlarge)
By David Kaplan

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January 3, 2012 – 8:00 am

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