“The purpose of thinking about the future is not to predict it but to raise people’s hopes."
At the start of each year, we sit down and try our best to predict the future, then keep score of how we did at the end of the year. Some years we do better than others. Last year was a mixed bag for me, but fortunately I got more right than wrong. But one has to wonder, with such rapid change in our industry and the world, what’s the point in thinking about what’s to come?
While I pondered this question over the holidays, Dyson’s quote really struck a chord with me. When we think about the future, our job isn’t to predict what will happen (that would be foolish), but rather to inspire others to create the changes we hope to see.
Narrowing our focus to the data-driven TV advertising, here are a few “hope raisers” for our industry this year.
- Convergent TV will be simplified via industry realignment, recessionary reactions, and regulations
If 2022 was the year of great anxiety for the TV industry, 2023 will be the year the industry gets back to the basics, and in doing so, begins re-establishing itself as the top channel for advertisers. The US TV industry has a $45 billion opportunity to bring ad spend in line with attention.
But if TV wants to capitalize on this opportunity, it needs to:
-Learn to use data to drive brand outcomes and measure return-on-investment
-Help marketers find intended audiences at scale across all TV screens and apps
-Streamline and simplify planning, targeting, and post campaign reporting processes
For all of this to be achieved in 2023, it needs to be accomplished against a backdrop of increased regulation (both privacy, and possibly antitrust), a probable recession in which companies are prioritizing cash preservation and profitability, and an industry realignment of players, partnerships, and roles within an evolving media and data distribution supply chain.
While there will be investments in technology that will facilitate cost savings and privacy-safe data use, the accelerated pace of regulation and a recession will incite further partnership and consolidation between industry players (programmers, distributors, and their tech partners) to streamline ad buying and measurement across linear and CTV. Some of this will come from M&A (I predict at least one major acquisition this year), some from joint industry committees / initiatives, and some driven by industry joint venture technology companies.
This will end up being to the benefit of audiences and advertisers – who are both suffering from an abundance of choice with limited tools to navigate the seemingly infinite number of programs and apps.
- AI-Driven TV will become ‘a thing’ and fuel the next wave of growth
The intersection of generative AI, data science, machine learning, and optimization platforms that exists at major Big Tech platforms will make its way into TV advertising.
I expect at least one major TV advertising company to launch a platform that allows brands to upload CRM sales data, specify target KPIs and budget, and use said TV company’s data, premium inventory, and AI algorithms to drive performance.
There are only a small number of companies with sufficient data scale to launch these products and these companies will require the highest levels of data and privacy protections (see points 3 & 4 below).
- Accurate big data will fuel AI-driven TV
Generative AI, and machine learning more broadly speaking, require truly ‘big data’ (OpenAI trained its GPT models using 45 Billion Terabytes to be precise) to produce quality results. There are few TV companies that possess the necessary trained data scale to generate quality optimization models (i.e., the top 2-3 publishers and 3-4 MVPDs). Some will be able to go-it-alone, but more will require a partnership mentality across the distribution supply chain.
With MVPDs possessing viewing data, publishers and adtech platforms possessing impression data, and brands/retailers responsible for outcomes, data will need to be aggregated to train algorithms.
With the vast identifier fragmentation, companies with first party identity data (particularly household-level) will become the centerpiece for facilitating this collaboration.
But none of this works without privacy, which brings us to hope-raiser #4.
- ‘Clean rooms’ and ‘Clean tech’ will re-shape the data pipeline by adding further privacy and data protections
Clean rooms had their coming out party in 2022 but are still relatively nascent.
With industry bodies driving standards and competition heating up in the space, clean room providers will need to differentiate themselves and clarify their unique value proposition.
Platform capabilities for non-movement and advanced privacy and data security controls are becoming more commonplace, but most clean rooms still have not cracked the code on accurate matching and the use of granular data (necessary for many AI use cases).
Expect further adoption of ‘direct matching clean rooms on demand’ to fill this void, improving match rates, and becoming the accelerant to cross-clean room interoperability.
- Addressability and cross-platform measurement will become table stakes
Our industry has spent the past several years advocating for more innovation, while simultaneously implementing addressable TV technology and cross platform measurement solutions.
2023 will be the year we start to talk less about these things, as by the end of the year many of the most-talked about problems (e.g., standards, scale, dynamic insertion, ease of targeting and measurement) will have been largely ‘addressed’ (see what I did here?!). To accomplish this, the TV distributors need to continue to focus on not only enabling addressable supply, but also on greatly simplifying the business models and workflows to make sure the juice is worth the squeeze for buyers. I’m confident they got this memo the last few years and will prioritize this year.
Whether TV companies decide to target audiences at the impression level or continue to sell sponsorships and spots will become a pricing and yield management decision, but most premium supply endpoints will be capable of being addressed 1:1 at the household level by the tail-end of 2023.
Ditto for measuring reach and frequency across CTV apps and linear TV.
- Programmatic platforms will evolve identity approaches for converged TV
Last year I predicted that Programmatic will stop being a dirty word for the TV industry and gave myself partial credit in the end of the year scorecard.
While it is clear that TV advertising sellers are embracing automated execution models, as well as the use of data and algorithms, the nuances of TV and CTV still are not fully addressed by programmatic platforms.
In particular, a key difference exists between the way digital media is consumed (on a personal device) and TV (on a family-shared device). This remains true even in the case where an individual email is used to login to a streaming app; chances are that email log-in is shared for the entire household. Addressable linear TV buyers and sellers realized this a long time ago and built systems to support household level buying.
CTV publishers and programmatic platforms appear to be taking a more “digital” mindset on identity and are pursuing the use of individual level identifiers (such as hashed emails) in the bidstream to target– something I believe gives marketers a false sense of precision and greatly limits scale of reach. Pair this with the fact that linear addressable systems are already fully transacted on the household-level and it is clear that something will have to give for truly converged TV buying to occur in programmatic execution models.
With all of this known, my “hope raiser” here is that 2023 is finally the year that the buyers, ad sellers, distributors, and the buyside/sellside platforms come together to tailor identity for the converged TV ecosystem – prioritizing privacy, consistency, and sufficiently accounting for the nuances of household-level viewing present in the TV ecosystem.
I’m sure 2023 will bring many surprisingly exciting developments and announcements. Let’s hope that 2023 becomes the year that TV gets a bit of its swagger back, and in doing so, capitalizes on a significant opportunity.
Jason Manningham is Blockgraph's CEO and Co-Founder.