In many ways, DRTV media agencies conduct their campaigns the same today as they did in the year 2000. However, things are about to change rapidly. The future of TV will arrive — in a big way — in 2019, when the new ATSC 3.0 broadcast standard will bring addressable TV to the market on a wide scale. This sea change will catch many agencies off guard.
The process began in 2017, with the approval of ATSC 3.0. TV broadcasters launched an acquisition frenzy, buying local broadcast stations across the country to piece together regional and national addressable audience targeting platforms to compete with the national TV networks.
ATSC 3.0 works as a hybrid television delivery system. The station broadcasts audio and video content over the air, while also sending targeted ads to the viewer’s internet connection for integration into the program. This ATSC 3.0 IP-based system gives TV advertisers the same ability to communicate with viewers as they do in the digital marketplace. Regardless of the device, viewers will be able to watch live-streaming TV programs of their choice — and have relevant ads served that match their interests.
This should be great news for DR agencies, but the reality is that most agencies are not prepared for the logistics of working with the ATSC 3.0 standard. In fact, in a recent conversation with a C-level executive of a broadcast software company, he contended that “in two to three years, 90 percent of all current DRTV agencies will no longer exist, as they will be unable to compete with these industry changes.”
The inability to compete will quickly become apparent to agencies that find themselves stuck with order management systems that are not set up to handle the workflow of addressable TV. With ATSC 3.0, advertisers will be looking to target TV viewers based upon very specific criteria, and the agencies that survive will be the ones that enable their clients to buy relevant, addressable ads.
Another significant industry change will occur as the DR marketplace comes under heavier attack by upfront and spot advertising agencies, who will be better prepared to work in the ATSC 3.0 environment as they move more toward a DRTV-ROI relationship with their clients. These major TV agency holding groups are all at least a year into retooling their buying and order management systems to manage this new direct-to-consumer, advanced-data TV advertising.
The new data systems utilize technologies that make every spot a SKU that carries a parent-child relationship for all data that was used to plan, target, and transact for use in analyzing the ROI of the spot. These agencies are retooling themselves to be, in effect, “smart data DRTV agencies” that standardize all data flow from all media trading partners into to a single file format to allow seamless data exchange.
If you own or manage a DR agency, make no mistake: the major holding companies are now coming after your business and you must be ready to handle addressable TV data in order to stay competitive. I believe that DR agencies have one year to position their business for the future of TV. If they do not, the C-level exec I spoke to just may be right: many DRTV agencies may not survive unless they can provide addressable-TV capabilities for their clients.
What are you doing today to position your business for the future of TV? You should ask yourself these questions:
- Is your software system set up and ready to handle spot ID data?
- Is your media management system (MMS) software provider working on a solution to the advanced-data TV marketplace?
- Is your software set up to manage the thousands of new data types and sources that are now available?
- Is your data sent to you today from all media sources in a single format that allows for seamless integration into your MMS?
- Do you have a data technology partner who can help you with all of the above?
If you cannot answer “yes” to all of the above, today is the day to get everyone into a room to start developing your plan.