From Beet.TV: 2nd Screens Yield Vital Data For TV Networks

This interview I did with Andy Plesser from Beet.tv outlines what we're planning on doing with the 2nd Screen Summit next month at CES.

Take a look.

TV's Accountability Issue

There were two interesting take-aways from the TV of Tomorrow show last week, that are somewhat interrelated. The first was that as viewing shifts away from linear to DVR, VOD and OTT, brands should hesitate to pour all their money into linear television advertising that doesn’t get seen. The second is that Netflix is eating into the networks viewership. It’s not that people are watching less of the programs the studios and networks produce. It’s that they’re watching more of it on Netflix.

Where, of course, they watch without commercials.

There are a few threads going with the way advertising is handled. The first is plain old measurement: why are we still relying on Nielsen diaries when it’s quite possible to know what every single set top box is tuned to at any given moment. That kind of reliable metric is currently available for digital media and since it’s feasible for television too, TPTB are starting to demand accountability.

Accountability matters because the lion’s share of ad budgets are still going into linear television. Which is quibble #2: Why? Why, when NBC’s head of research, Alan Wurtzel, opened the conference with a slide that showed linear viewing has slid to around 60% while noting that DVR Playback is not only largest primetime “network,” it’s four times larger than the other four major broadcast networks combined. (Given that Wurtzel’s stats constitute an admission against interest for NBC, I’ll take him at his word.) 

Despite the fervent wishes of both the networks and the advertising agencies that sell those commercials, no one is watching commercials on their DVRs. They’re just not. So you have accountability times two: why are we guessing at who is watching TV advertising and why are we pretending that they’re even watching it at all, C3 and C7 be damned. Which translates into more than a few CEOs asking “and why exactly am I paying for this?”

To which their CMOs are unable to come up with a compelling answer. 

It's important too, to ask why the idea of watching TV without commercials suddenly seems so appealing? Beyond the fact that most most commercials suck, that is. Well, Netflix has trained some 50 million of us to enjoy television without commercials. And it’s not all Orange Is The New Black. In fact, most of it is network programming. You see back in the day, networks had to wait until a show hit 100 episodes (usually sometime during season 5) in order to put a show into syndication. So seasons two, three and four just sat on the shelf, losing money. At least that was the pitch Netflix gave to the networks and studios who all happily gave up those recent seasons to Netflix for gobs of money. Then they got addicted to those gobs of money and even convinced themselves that Netflix was driving viewers to watch shows live because, you know, Breaking Bad.

Only now it’s become clear that Netflix is actually siphoning viewers away from live TV, in no small part because they can watch shows on Netflix without commercials. And having gotten used to those gobs of money, the networks are finding it very difficult to break their Netflix addiction. That addiction has many negative effects, not the least of which is that the commercials that do get shown on linear TV will go down in price because fewer people are watching them, and the delta between money lost from ad revenue and money gained from Netflix revenue is not moving in the networks favor.

Now if you’re thinking that just means brands need to shift their dollars from linear to digital video, think again: study after study keeps coming out about massive fraud and wasted dollars in that segment, so buying digital video is no panacea either.

Another fine mess we’ve gotten ourselves into.

The key is going to be figuring out what replaces interruptive advertising. There was a lot of talk about buying audiences rather than just viewers. But that's only a partial solution, a band-aid at most, because once you introduce people to the joys of ad-free TV, you can’t expect them to still watch 8 minutes of advertising for every 22 minutes of programming again, no matter how relevant those ads are.

I don’t know what the solution is: I’m not that smart. (And if I did know it, I certainly wouldn't be giving it away in this post.)

But it’s a problem. One the industry can’t just wish away.

Second Screen: It's All About The Data

We’ve seen the future of the second screen and it’s all about the data. Data is going to be the currency that fuels the entertainment industry in the years ahead and second screen will be the way that data is collected.

Think of how readily we give up personal information to search engines or to join social media sites. So why wouldn’t we give it up for something we really value: great entertainment? 

The industry has always held the ultimate consumer attraction — great stories, great stars, great sound — all of which have the power to draw unlimited audiences on a global scale for hours on end. What information would you give up about yourself if it was the only way to watch the Super Bowl? What would you give to get the final episode of your favorite series first? When you think of the data you give up to maintain virtual friendships with people you haven’t seen since fourth grade, you’ll understand the potential value of giving up that same data to have access to entertainment.

That’s why we’re convinced that the media and entertainment industry is in an amazing position to prosper in a future world where the real currency will be the data we are able to collect about our customers. The second screen is not about the screen. It’s about connecting the content company to their customer so they can learn more about them. 

Enabled by their fundamental interactivity, these second screen mobile devices will be the single, most popular way viewers will (literally) touch their programming, while paying for the experience with marketable information about their viewing, social and shopping habits and preferences. 

Without a second screen component, broadcast, cable and even streaming are going to be (virtually) unplugged; they will continue struggling to sell advertisers who are challenging their numbers based on outdated measurement tools. 

Once granted access to their customers data via second screen devices, however, those content delivery networks will hold the key to the largest untapped, demographic treasure trove in history; the data about who watches what, when and where will provide them and their business partners with accurate and irrefutable data, and measurable ROI. 

The second screen will be the ultimate destination in today’s smart entertainment supply chain. By completing this connection, content creators and owners will have a real-time feedback loop that will enhance both business and creative decisions. It will put the content owner and their advertisers in direct contact with their consumers for the very first time. It will enable content marketing to come from the most authentic of sources — the fans themselves. 

Audience measurement and analysis will become even more accurate and fast. And a new media and entertainment monetization engine will emerge, generating more profits, more productions, and more creative experimentation than ever before.

This post originally ran on the 2nd Screen Society web site and reflects our new thinking around the meaning and value of 2nd Screen. You can see it in action at the 2nd Screen Summit at CES, Monday, January 5th at the Encore. Tickets available now.

Prom King Brands And The Evolution of 2nd Screen

Seven years ago, I wrote a piece called “Your Brand Is Not My Friend” that talked to the fact that there are only a handful of brands “cool” enough that people actively seek them  out on social media. The other 99% of brands have to provide something of value to get people to pay attention to them.

What makes a Prom King Brand? It is, as the saying goes, a certain je ne sais quoi, but the easiest definition is a brand whose logo people will unironically wear on a cap or a t-shirt. So Nike. Starbucks. Apple. Plus sports teams. Colleges. Musicians. And of course, TV shows.

There’s a certain cool factor to TV shows that most brands just don’t have. So that people will engage with their accounts on social media and play around with their second screen apps. It’s not a little off for an adult to admit to being a fan of Homeland (especially this season) and therein lies the opportunity for brands to introduce an alternative to interruptive advertising (those 30 seconds commercials that have become increasingly jarring the more we rely on services like Netflix and Amazon that don’t have them.)

A branded promotion around a TV show— and that could be everything from sponsoring a companion app that allows viewers to play along with a show like The Voice, your basic Twitter promotion contest during the season premiere or an full in-show integration the way Dodge did with Defiance— will get traction from fans of the show and the brand will gather the halo effect of being associated with a Prom King brand. It’s a way to get consumers to pay attention and think good thoughts about your brand. When executed correctly, it’s also a way to get them interested in learning more about your product, either because it’s the prize for the competition or because you’ve positioned it in a way that makes them understand the connection between your brand and the show and why you’ve got something they might be interested in.

As second screen grows, along with the rich (and measurable) data that comes with it about who the viewers and fans are and what they’re doing online, it will become more of an integral part of the show’s production, with showrunners and their staff creating  experiences that feel organic to the show. That means networks will begin working more closely with advertisers to create unique properties for them, something that harkens back to the early days of television when brands worked closely with showrunners and networks.

I’m not sure interruptive advertising will ever totally go away. But for brand looking to stay on its customers good side, branded second screen experiences should provide a viable alternative.