A TV Buyer’s Guide to Programmatic TV

A Conversation with Lee Doyle
 

 

Transcript

 
Speaker 1:
Hello, and welcome to the Simplifi webinar series. Today we have a special interview with Brian Garrigan, Simplifi’s VP of agency and brand sales, and Lee Doyle, former executive director of GroupM, to talk about all things programmatic CTV.

Brian Garrigan:
Hi everybody. I’m Brian Garrigan and I oversee agency and brand sales at Simplifi. Today I’m excited to be joined by Lee Doyle to talk to you specifically about buying programmatic CTV. Lee has a really impressive background, has served on various leadership roles at GroupM and WPP for more than 18 years. He’s had titles such as the executive director at Group M, president of client development and mind share, CEO of North America at MEC, and many, many others. He’s been on some of the top accounts out there as well, working on groups such as Dell, GM, Colgate, Kraft, Macy’s, Burger King, even Campbell’s, and the list goes on and on. So I think it’s safe to say Lee, we’ve got the right guy on the webinar today. Thanks for joining us.

Lee Doyle:
Hopefully. Thanks.

Brian Garrigan:
So why don’t we start today and just maybe you could share a little bit of a quick state of the industry on where broadcast is today and what we can expect in 2020?

Lee Doyle:
Sure. We finally reached a point where digital spending has overtaken traditional linear TV spending. And when I say linear TV, I’m generally referring to ABC NBC, CBS, the traditional broadcast networks. Television and video has just gotten so complicated in recent years. And I think that’s going to be a big part of our conversation today is the confusion that exists around this space. Because people whip terms around and we don’t always know what the other folks are saying.
Before the crisis, it was expected that the television market was going to be about $70 billion this year. Obviously that’s going to come down a bit. People have dialed back their advertising spend, but all indications seem to be that spending is going to continue to accelerate to digital platforms. In terms of growth, the IAB before the crisis was predicting that OTT and CTV would be about seven billion of the 70 billion. So that may be down, but I think it’s still safe to say that the growth is in double digits. I think their figure was that they expected to increase 37% in 2020, which is kind of amazing. It’s the fastest growing part of the industry.
And I guess the good news in the digital space is based on the IAB’s latest survey, advertisers are doing less to cut back in the digital space than they are in the traditional linear space. And that was based on a survey that was done April 15th to 21st. So digital spending is holding up well.

Brian Garrigan:
It’s interesting. Yeah, and to your point as if there wasn’t enough disruption going on without COVID, then the whole COVID thing kind of comes together.
Lee Doyle:
Right.

Brian Garrigan:
So it seems like there’s two different approaches happening right now when people are looking at how they want to buy OTT and CTV. Audience buys, which are common in digital, and then content buys, which are more common in linear.
Lee Doyle:
Right.

Brian Garrigan:
So can you speak a little bit to the pros and cons of what both are and how people should be approaching it?

Lee Doyle:
Yeah. Audience buys are, in many ways, the ideal. You’re buying specifically the people that are most likely to be your products’ consumers. The whole idea of buying content or buying around content is a legacy issue, if you will. In the linear TV world, which we keep going back to, and that’s the point of reference for a lot of buyers, content was sort of a surrogate for the kind of audience you would expect to find. If you bought sports, you were going to get a large percentage of males. If you bought daytime TV, you were likely to get a large percentage of women. If you bought prime time television, you get a very large dual audience. And so people are still clinging I think, to that kind of mentality, even though we’ve got so many more sophisticated ways to approach it.
I think the other issue is around reach and un-duplicated audience, and that’s something that’s still a challenge even in the digital world is we just don’t have great measurement across platforms. And therefore, as much as we’ve got general numbers and impressions and all that sort of thing, we really don’t know how much of the audience we’re reaching on digital platforms is the same or different than the audience we’re reaching on linear platforms.

Brian Garrigan:
So where’s the difference?

Lee Doyle:
Yeah. So that is still a huge challenge. I’m jumping ahead a little bit, but I was working with the four A’s and they did a survey on the number one measurement issue. And what they found was a cross-platform measurement is at the top of everybody’s list in terms of what isn’t currently being done adequately today, that they need better measurement on.

Brian Garrigan:
Interesting. So it’s being debated right now in the industry it sounds like?

Lee Doyle:
It is. We know where audiences are migrating. We know that audiences are migrating to digital platforms, watching on other devices. That’s a given, but what advertisers are looking for is they’re looking for efficient reach. How do I get to the people on one platform that I didn’t get to on another platform? That’s the lingering question. And given that we have different measurement systems in place for these different platforms, it really becomes hard to answer that question.

Brian Garrigan:
That’s interesting. One thing I’d love to get your definition on and to debate a little bit, is the word premium, right? I feel like there’s no clear definition and various vendors in the space are defining the word premium differently. So how are buyers defining it as related to content or as related to audiences and how would you best define the word premium when it’s related to this space?

Lee Doyle:
I think it’s one of the biggest issues.

Brian Garrigan:
Interesting.

Lee Doyle:
Because people whip the term around in different ways, to your point, they define it differently. And I think it’s important in any kind of a dialogue between sellers and buyers that they be upfront about defining what they mean by this term. In the world of, well, I mean the simplest explanation, the simplest definition is what are you willing to pay more for? The problem is in a linear television universe, what you have to pay more for is very different than in a digital television universe or a digital video universe.
And I’ll go back to the linear version of it, in the linear version, it’s larger audiences and audiences that are difficult to find in television. That typically meant we’ll pay more for prime time TV because I can get a larger audience there. We’ll pay more for sports because I can reach males and males are harder to find in the television world. But that doesn’t really apply when you move over to a digital universe. It’s, especially if we go programmatic, it’s all about who’s willing to bid more?

Brian Garrigan:
Who is willing to bid more, yeah.

Lee Doyle:
For this discreet audience? And then the other way that’s gotten confusing is once we moved over to digital, advertisers and agencies became very concerned about the content that they were associated with, they got worried about brand safety. And if you think back to the earlier days of digital, a lot of the video was user-generated and we didn’t know, and we didn’t know what we were going to find there. Big audiences, but we didn’t know if it was going to be safe for a brand’s message. And we didn’t want to be associated with something that might be controversial, something that might have a negative halo on the brand.
And so the way digital sellers tended to use the term premium was this is professionally produced, brand safe content. So it became about the content versus the audience. And so everybody again, we’re all confused. So we have to, I think, be very specific with our definitions when we start to whip around terms like audience or premium, what do we mean by that?

Brian Garrigan:
Yeah.

Lee Doyle:
How are we defining it? And I don’t think there’s any harm in just being out front about it. Don’t wait to be asked the question. I think it’s more about, here’s what I mean by premium, I mean content that’s safe for brands, that is more likely to be professionally produced. But I don’t think we’re anywhere near a point in time where everybody’s going to agree on the definition of premium. The marketplace decides it in a way, in terms of what are buyers willing to pay a little bit more to get? And that’s why it’s so important to get your terminology correct.

Brian Garrigan:
Yes. I think you’re right. The more that communication can kind of happen up front in the buying process, the more likely the campaign is to be successful on the backend and manage the brands expectations.

Lee Doyle:
Exactly.

Brian Garrigan:
So, that’s good.

Lee Doyle:
Great point.

Brian Garrigan:
Great. So this is great information. I’d really like to explore the concept of audiences a little further?

Lee Doyle:
Sure.

Brian Garrigan:
So what’s your perspective on audiences versus content specifically?

Lee Doyle:
Audience is another tricky word. And well, if you’re a digital buyer, you have a certain definition of it. It means a very discrete, defined audience. In linear television it’s not a new word. And this is where the problem comes is linear TV buyers have been buying audiences since the beginning of television, except how they define an audience is very different. To them it means the profile of the people watching a program. So as an example, The Walking Dead, hot program. There are about 4.5 million viewers to the average episode of The Walking Dead these days. And of that 4.5 million viewers, about 2.2 million of them happen to be adults 18 to 49. Adults, 18 to 49 has traditionally been a desirable demo for linear TV buyers. So to them, it’s like, “Oh, well, The Walking Dead delivers an audience of 2.2 million adults, 18 to 49.” And that’s about as far as they used to take it, that’s as far as they would think it through, because that was the limitation of linear television.
This idea, the idea that’s new to linear TV buyers is, wait, I can buy on behaviors? I can buy on all sorts of other things beyond broad demographics? That’s the new concept to them. And people are still adjusting to it, I would say, and that’s, I guess, the challenge here is that audience has this different definition to different groups. And again, just like we were just talking about content and things like that. It’s important to define when you use that word audience, what do you really mean by it? What are you trying to say here? And unfortunately in the relationship between buyers and sellers, nobody wants to admit their own ignorance. No nobody wants to fess up like, “I don’t know what you’re talking about.” And therefore it becomes incumbent upon the seller to be proactive about that and make sure that it’s understood what they have available.
I think the other challenge as it relates to people that come from a linear perspective is they haven’t necessarily, if they’re in large agencies that are very siloed with very defined functions, they may not have been exposed to the all of the target audience information about who’s likely to buy. They may have just been handed abroad demo because that’s how the food chain has traditionally worked. It’s like the planners and strategic thinkers, you know, try to look at well, who’s most likely to be our best prospects? But then have told over years, they have to boil it down to a demographic that can be measured. And that’s what they hand off to a linear TV buyer. So the buyers, I think the challenge for them is to move a little further up stream to start understanding a little more deeply who is really the prospect we’re trying to reach beyond a demographic given the options that they have here.

Brian Garrigan:
Interesting. So what about specifically, the data side? How is that being kind of determined right now and debated, and can you maybe share some perspective on how the buyers are approaching that?

Lee Doyle:
Sure. I guess the good news for video in general is the effectiveness of video has never really been debated. It’s always been an accepted given. There’s been a 50 year history of marketers finding when they turn on video in large scale, television, they see the needle move, they see brand health metrics improve, they see awareness improve, and they consequently see sales improve along with that.

Brian Garrigan:
So efficiencies there?

Lee Doyle:
Yeah, there’s huge efficiencies there. And it’s one of those funny things as we kind of move over to the digital world, there’s this perception that, “Oh, well, how is it that television gets all these dollars and they’re not being held accountable because there’s no clicks, there’s no conversions?” And it’s really about the legacy of television as being this huge, incredibly effective mass medium.
I think the question nowadays, given how fragmented the video landscape has become not just across platforms, but even within the traditional linear television universe, we’re looking at 200 channels, it becomes, “Well, how do I make that video investment more effective? How do I pick the right networks to invest in, the right programming to invest in? How much do I allocate to CTV and OTT?” Theoretically, a CTV and OTT audience are a more desirable audience. They’re more likely to be upscale, they’re more likely to have the disposable income for a lot of products. So it makes sense to be investing there. And obviously people that have those options are spending less time with linear television. Every hour you spend on Netflix is an hour you don’t spend with ABC NBC, CBS, where you’re exposed to commercials.
But finding that right mix is I’d say, one of the biggest challenges, if not the biggest challenge right now. So many choices, I don’t have an infinite budget. How do I allocate it intelligently? And that’s where measurement is falling short right now, because we don’t have a single standard, a cross platform measurement standard that we can use to understand not only impressions and efficiency, but reach and frequency. Where am I duplicating my audience and where am I getting new audience that I wasn’t reaching on another platform or on another network? So that’s at the forefront right now of measurement issues, if you will.
At the same time, we’re making great improvements on basic attribution. I think Simplifi is a great example of that where you’ve added foot traffic, as well as the ability to measure online conversions to your platform. And so without other means of confirming that my investment is paying off, that my investment is effective, those are good steps in the right direction. And for a lot of advertisers, the foot traffic alone I’ve been really impressed with because for so many advertisers, retail, QSRs, those kinds of categories, they do want to see that the needle is moving and it isn’t always apparent with other methodologies. So I think that’s a really positive step.

Brian Garrigan:
Interesting. Well, that’s good. Another thing that comes up pretty frequently when I think digital and linear are kind of merging is the idea of an impression multiplier, right?

Lee Doyle:
Yep.

Brian Garrigan:
So you have this multiplier and TV, OTT CTV, but you don’t necessarily have it in display and impressions and impression. So could you maybe add some perspective on how that is coming together and the pros and cons of that? Yeah.

Lee Doyle:
Yeah, I think unfortunately it’s another measurement issue. In the display world, we kind of assumed that the only person that was being exposed to the message was the person in front of the computer or the person in front of the mobile device. Once we got to the large screen in the living room, obviously there are opportunities where there are multiple people in the room. So the sellers, the suppliers, obviously want to get credit for the fact that there might be multiple people in the room. And I can see their point of view on that, but we don’t have a really good means of measuring that. And the number of people in the room really does vary based on other research we have about television.
It varies a lot from program to program. Programs like The Voice and American Idol back in its hey day, tended to bring the family together, tended to bring everybody into the same room, it was a family experience. It was amazing because up until, I happened to have worked on AT&T, which was a big sponsor of American Idol. So we delved really deeply into it. Prior to American Idol, people were going to their separate rooms. The average household had two, three, four television sets. And mom and dad were watching in one room and the kids were watching in their own rooms, but that one brought everybody back to the same room. The problem is not every program does that and we can’t assume it, and like I said, it’s a measurement issue. If suppliers, video suppliers want to get credit for it, we need to find a way to quantify reliably what the likely audience is beyond those, the one person in the room or one impression. The other issue is who are those people?
Because if we just use simple demographics and we said, “Well, I’m only interested in adults 18 to 49.” Well, are the other people in the room within that demographic? I have no idea, it might be kids, maybe I’m not selling to them. And then if we think about the digital universe where we really want quantification beyond just broad demographics, that’s an even bigger challenge. So like I said, I get where the suppliers are coming from, but as a buyer, I’m not buying it.

Brian Garrigan:
I’m not buying it.

Lee Doyle:
I’m not buying it. That’s I guess, the bottom line on it. It’s you can’t expect me to just take this leap of faith that the audience is two or three people in the room.

Brian Garrigan:
Yeah. No, that makes sense. And right now, everybody, to your point, there used to be scenarios where there were two or three TVs per household now there’s devices everywhere.

Lee Doyle:
Yes, exactly.

Brian Garrigan:
Right? So there’s the big screen. There’s the small screen. So, so are they all becoming one? How’s that coming together and what’s the perspective you could share there?

Lee Doyle:
I think the issue is there’s still a perception that the big screen is more valuable than the small screen. That perception still exists. I think it will change over time, I think it is changing. I’ve got teenage kids and that’s what brings it to life. My kids have no problem watching an entire series like The Office or Seinfeld or Friends on their littlest device. It’s a very personal experience, but they don’t seem to have an issue with it. Whereas those of us who have been in the industry for awhile, we obviously favor an impression on the largest screen possible. The theory being that’s when we’re most attentive, that’s when it’s going to have the biggest impact. So for the short term, I think unfortunately the big screen is more valued. And I think as we look at programmable video. In the short term, that’s a big issue because people aren’t putting the same value on an impression on a small screen, as they are on a large screen. I hesitate to say, I think the impression could be as valuable.
I guess the other side is supply and demand issues. It seems like impressions on small screens are in greater supply than they are on large screens. That could change, but right now that’s-, so it becomes in a programmable programmatic universe do you have to pay more to get an impression on the large screen? I think you do, looking at some of the buys I’ve seen recently. You do have to pay that premium to get it. Hopefully for a buyer it’s considered more valuable.

Brian Garrigan:
Yeah. And I think there was this initial thought process that mobile devices was limited to short term video. And now we’re finding to your point your kids are watching Seinfeld, they’re watching Friends, they’re watching longer formats on these smaller devices too. So it’ll be interesting to see how it evolves for sure.

Lee Doyle:
And like I said, I think a lot of that perception lingers, that it’s only for short form. I think the one variable, and this is the part I have not monitored on my kids.

Brian Garrigan:
Okay.

Lee Doyle:
Is will people sit through a longer form video commercial on these other devices? Because we tend to be leaning forward, we tend to be more active. I will confess that I am as guilty as anybody of I just watch the countdown there on when I can skip the ad if I’m sitting on my laptop or I’m sitting on my mobile device. Whereas there’s that lean back tendency when you get to primetime television on the big screen, you just sort of let it wash over you. It’s just not even worth reaching for the remote. And we’ve been conditioned for 50 years or however long it’s been to just sort of accept a certain level of commercial load in television.

Brian Garrigan:
Yeah, no, that makes sense. It brings up just kind of an overarching question, so to speak of what’s going to come out of the industry, but do you think there’ll be anything that will emerge and become more important in general sort of speak as TV buying evolves? What do you think is going to be the future concept there?

Lee Doyle:
Well I think as all the various buyers come together, and that’s something, every agency is trying to do the large, the small and everything, is try to look at the landscape holistically across all these platforms and understand it. And I think the more that happens, the more buyers will embrace audience buying. They will see the value in that. And so I think that’s going to be a big change. I think there’s going to be significant shifts in spending. The big issue this year is that the national broadcast upfront has been put on hold. There are no presentations. I think there will still be an upfront marketplace, although it’s going to be delayed and it’s going to be protracted. It’s not going to happen with a big kickoff in may, as traditionally has been the case. And less money is going to be committed to that marketplace as a result, there’s too much uncertainty for advertisers to be committing what used to be 80%, 70 to 80% of their television budgets were being committed in the upfront.
And I’m hearing estimates at the moment as low as 30 to 40%, because we just don’t know how quickly we’re going to emerge from that. But I think that’s also, it’s not just a one-time situation, it’s not something that’s, “Oh, well, we’ve got to get through COVID-19 and then we’ll get back to business as usual.” I think it’s going to change for the longterm, which is advertisers have always struggled with these long-term commitments that are so far in advance of their own marketing cycle. And marketers are moving much more to real-time marketing planning. It’s no longer a world of set it and forget it, let me build a plan for the year and at the end of the year, I’ll see what happened. Successful marketers are all about course correcting and keeping their finger on the pulse on a day to day, week to week basis.
And so I think this is going to be the year probably where a much smaller percentage is going to get committed on a long-term basis. And marketers are going to use that flexibility to their advantage. They’re going to spend when it makes sense to spend, dial back when it doesn’t make sense to spend. And I think that’s going to be a seismic shift in the advertising world, because-

Brian Garrigan:
Yeah. No, that makes sense. Yeah.

Lee Doyle:
There’s been, and you’ve probably run into this yourself, too many occasions where, you get in the door with an agency and they say, “Oh, I think you’ve got something really great here. However, my dollars are committed.”

Brian Garrigan:
Happens a lot.

Lee Doyle:
“So come back and see me next year.” Well, I think we’ll see less and less of that.

Brian Garrigan:
Okay.

Lee Doyle:
And I think that’s, hopefully it’s good for everybody. The big issue is, and nobody, very rarely do people talk about it, but pricing has always been the big issue. That’s one of the things that’s kept marketers committed to the upfront, is the upfront advertisers have been generally able to enjoy a 15 to 20% advantage versus buying in the short term, whether that advantage holds true in this new world is I think, one of the big questions.

Brian Garrigan:
Yeah, no, that’s true. So it sounds like obviously embracing audience buying, understanding how performance marketing can come together to support the campaign, potentially being agile to respond to your market needs all will become more and more important. So you brought up a good point too. And we talked a little bit about this earlier was that there’s new measurement tools out there right now that can track conversions, online in store, so attribution’s going to become a bigger part of some of these broadcast buys. So what type of role do you see that becoming, or how are brands going to be vetting that moving forward as they’re looking to have potential more accountability into their campaigns?

Lee Doyle:
I think they’re going to put a higher value on it. I think it’s going to be, for those that can provide that kind of measurement within their platform, it just makes the whole process easier. And I think, that’s, when I think about the changes that this whole crisis are going to bring about, obviously there’s going to be increased pressure on operating efficiency. We’re going to have to do more with less. And when I say more with less, unfortunately I’m talking people as much as anything. So, to the degree that you can look to a single platform to provide you with both the data you need to be accountable, as well as the media. I think that’s going to be an advantage going forward.
I think the other thing that came to mind as I was thinking about the changes that this will bring about, and this is a perfect example, we’re all learning how much we can get done via video conferencing.

Brian Garrigan:
At home.

Lee Doyle:
At home.

Brian Garrigan:
Very true.

Lee Doyle:
Via video conferencing. And what I hope that leads to is more access between or more communication between buyers and sellers. And that’s where it’s so easy to set up one of these Zoom calls. I don’t have to find a conference room. I don’t have to log in people with security that are going to come into the agency, and frankly I can do it without shaving.
And I think we’re looking at a really complex landscape here, especially in the video universe as we’ve been talking about. So you would like to think that this gives people a little more opportunity to learn, to be educated, to be accessible to ask the questions that are on their minds, to make sure they really understand, what they’re planning, what they’re buying. And that’s where I think, I worry about the buying side of it having come from my agency experience. I hate to think that as an agency or as a marketer, that we’re missing great opportunities for building our client’s brands, because we just don’t understand them. Because we’re shutting them out, because we don’t have the time or the energy to really understand what’s happening and what’s changing, and what’s really available.

Brian Garrigan:
No, that’s very true. So, coming out of COVID, I think it’s going to be a different dynamic for buyers, for sellers, for brands, all to embrace the ability to specifically have information faster and be able to vet it in a way that would probably be more efficient overall. So this has been really great. Any other last thoughts on COVID or for thoughts buyers or sellers?

Lee Doyle:
Well, I’d like to hope that this has forced us to really focus on what matters and not just going through the motions, I lived through the financial crisis of 2008, 2009, and what we found at the time, because our digital teams at the time were overwhelmed with a lot of reporting and things. I pressed my clients to say, where are these reports really going? What are they being used for? How are they influencing decisions? And what I generally found was we were generating a lot of reports that just didn’t matter to anybody.

Brian Garrigan:
Really? Okay.

Lee Doyle:
We sent them to one person, they got circulated within their organization. They saw it as another way that they were contributing or adding value. But when we really chased it down to the end a lot of them were unnecessary. And I’d like to think that we’re going through a similar situation now where we can really reevaluate because we’re all struggling to keep the trains on the track and business moving and everything. But we’re also being asked, what doesn’t really matter? So if we can get back to what matters, I think that’ll be a really positive outcome of all this.
And my last thought is really back to, it’s a confusing landscape. Terminology is confusing, people are whipping things around, tend to string them into a sentence. I love when somebody says, “Oh yeah, yeah, we’re buying addressable, OTT, CTV.” And it’s like, stop, can you define what you mean by each of those terms? Because if you string them all together, what it says to me is you don’t really understand the landscape here. And so what I would encourage people to do on both sides is over explain and ask questions and make sure that you really understand what somebody has to offer here. And even within the narrow space of what Simplifi does. Everybody wants to lump programmatic platforms together, and yet there are very distinct differences across the different platforms in terms of their capabilities. And I think that’s important for people to understand so they can make intelligent decisions and not just go with the biggest and best, and well, everybody else is using these guys, so they must be okay. I think we need to surface where are those nuances where one platform has a significant advantage versus another platform?

Brian Garrigan:
Yeah, no, that’s very helpful. Great insights, Lee. Thank you. So I think that’s it. We’ll wrap it up there.

Lee Doyle:
Okay.

Brian Garrigan:
So thank you to Lee. I appreciate it. This has been the TV buyer’s guide to buying programmatic CTV. I appreciate the time.

Lee Doyle:
Hopefully I didn’t insult too many buyers.

Brian Garrigan:
No, it’s been some great perspective. Thank you.

Lee Doyle:
All right. Thanks Brian. Take care.

Brian Garrigan:
Bye.