Like bootcut jeans or farm fresh produce, television is proving its staying power regardless of trends. Frozen dinners promised a future free of hot stoves and dirty dishes, a space age savior in turkey and dressing form. But just like digital display or native advertising, frozen dinners serve a specific purpose, and they’re no replacement for a home cooked meal.
Television is that from-scratch dinner. Americans are still watching an average of five hours of TV each day and over 50% of homes have a television subscription service like Netflix or Hulu. This is due in no small part to the fact that television programming has undergone a renaissance, with cinema-quality programs dominating ratings on broadcast and cable, new formats for delivery—Netflix, Hulu and other over-the-top (OTT) providers—and now the promise of data-driven insights for advertisers.
Data is the key to television’s profitability. Advertisers have access to more audience information than ever, while networks and content providers use data, in addition to instinct, to guide programming decisions.
The abundance of data available to content providers, marketers and advertisers necessitates systems to process, analyze and transform big data into profitable, useful insights. Each of the following examples have their own unique systems in place to achieve this transformation.
Data is Driving Creative and Content
For those 50% of homes with a subscription service, OTT TV is using data to make decisions not just about programming, but to guide viewers to the right content. The most famous example of data-driven content is Netflix’s House of Cards, designed to be a hit based on platform data like user viewing habits, ratings and preferences. But the content provider uses data to guide all of its decisions, A/B testing everything from creative, like title images to homepage layouts, and UI/UX changes.
Netflix’s data pipeline receives data from millions of set top boxes and online accounts, using the Hadoop ecosystem and leveraging Amazon’s AWS platform for cloud computing resources. Netflix then processes data using real time technology like Spark.
Data from A/B testing has led to insights with tangible results, like a 20-30% increase in programs’ viewership numbers.
Advertisers are All About Audience
Programmatic television is harnessing data for advertisers, using set top box data to provide information about viewers and target the right audiences. Building on viewers’ affinity for customized viewing experiences—like Comcast’s Olympics coverage—programmatic television promises unique advertisements for viewers, even though they’re watching the same programming.
While only 5-10% of current inventory is addressable and available to be purchased programmatically, advertisers and sellers see the value in purchasing inventory based on the individual viewer or household, rather than gambling on a program’s entire audience. Within the next three years, programmatic TV is expected to be a $17 billion market.
Cross-platform data will provide an additional layer for advertisers, meaning inventory can be purchased based on gender, age, income and more in the near future.
Clarity is currently working with entertainment companies to measure audiences across platforms. By aggregating these viewers, the company is able to see activity across platforms and provide advertisers with opportunities to truly execute an omni-channel advertising strategy.
Clarity is also enabling media and entertainment companies to augment viewing history with demographic information, political affiliation and other data points, providing the same advertisers with greater insight into the viewers that come with their inventory.
By storing the audience data, processing it with advanced data tools, then loading it into a system the client can access, Clarity is providing entertainment & media companies with the tools to turn their data into profit.
Ultimately all of these examples are tied together by a common thread: profitable, competitive players in the television industry are early adopters when it comes to big data. They are leveraging insights to provide value to advertisers, the right content and formatting to viewers and more visibility into their audiences.
Find out how Clarity's CME practice is turning data into profit.