programmatic living room | tubemogul

THE

PROGRAMMATIC LIVING ROOM

Table of ContentsIntroduction ..................................................................................................................... 1

Programmatic TV ............................................................................................................3

Planning ............................................................................................................................3

Performance ................................................................................................................4

Outlook ..............................................................................................................................6

Connected TV .................................................................................................................. 7

Planning ........................................................................................................................8

Performance ................................................................................................................9

Global ......................................................................................................................... 10

Streaming Sites & Apps............................................................................................... 11

Planning ...................................................................................................................... 11

Performance ..............................................................................................................14

Global .......................................................................................................................... 17

Conclusion – Planning into the Living Room ...........................................................19

Terms ..............................................................................................................................21

Methodology ................................................................................................................ 23

Sources ..........................................................................................................................26

TUBEMOGUL PROGRAMMATIC LIVING ROOM 21

IntroductionThe living room TV was the most powerful and iconic means of mass marketing in the twentieth century. Television itself is still a powerful way to present a marketing message in the twenty-first century. Advertisers simply have more ways of getting there.

Linear TV - simply put, watching scheduled television on a TV set as it airs - is a shrinking portion of consumers’ media experience. Yet the TV set remains an effective means of delivering large-scale sight, sound and motion. This year, 56% of Americans can stream digital content to their TV set1, offering advertisers additional channels to access the living room. Of course, in the twenty-first century, the “living room” extends beyond the TV screen and can be found wherever viewers watch television, which also includes computers, tablets and phones.

This paper is designed to help marketers understand and best use the new means available to them to reach into the “living room” programmatically. We’ll look at programmatic TV, connected TV and streaming sites and apps. We’ll discuss the audience reached by each channel, how to consider planning with that channel and how ads have performed on that channel. Where possible, we’ll take this investigation around the world.

T E L E V I S I O NShows, sports and movies

V I E W E R A C C E S S

C O N T E N T

A D V E R T I S E R A C C E S S

P L A C E M E N T

PAT H TO T H E L I V I N G R O O M

O ve r-T h e -To pTelevision that is streamed over the internet and is available to watch at

any time

C o n n e c te d T VInternet-

connected devices that

stream content to TV sets via apps

AuthenticatedContent that

requires credentials for a pay TV subscription

to watch. Also called “TV

Everywhere”

S t re a m i n g S i te s a n d A p ps

Services that allow viewers

to stream television on

their personal devices

Non-AuthenticatedContent that

can be watched without a pay

TV subscription, either for free

or a direct subscription fee

VO D On-demand

offerings from a pay TV provider, including linear

and pay-per-view content, watched

on a TV set

Tra d i t i o n a l T VBuying linear

or VOD TV ads without the use of

software

C a b l eChannels and

programs available

with a pay TV subscription

L i n e a r Scheduled

television that is watched on a TV set as it airs or is

recorded for time-shifted viewing

P ro g ra m m a t i c T V Executing linear or VOD TV ads using software

B roa d ca s t Channels and

programs that are free to watch


Programmatic TVFor the viewer, programmatic TV is just that: television. Programmatic TV is the buying and selling of television advertising via software. While the consumer experience is the same, the marketer’s experience is quite different.

The majority of supply is provided by broadcast stations and cable networks offering ad spots in an open marketplace. This allows advertisers to make granular, data-driven buys by aggregating available ad opportunities. Further, it allows marketers to parallel or complement the data-driven targeting they have available to them online.

In addition, programmatic TV offers operational flexibility and savings. Because ads are purchased via software, campaignscan be planned and executed from the same platform, saving time and effort. That execution can happen incredibly quickly by TV standards – campaigns can be planned and aired on TV in less than a day.

P L A N N I N GHow marketers use programmatic TV will depend on whether they are basing their plan on a TV or digital core. For those looking to enhance core television efforts through programmatic TV, the theory is simple:

STEP ONEStart with your TV buy

STEP TWOFind the portion of your

target audience that was missed in the TV buy

STEP THREEFind the missed group

using PTV targeting and reach them with a supplemental PTV buy

The “missed group” can be any number of things. Advertisers may find it possible to shift a campaign’s reach from 70% to 75% with strategic programmatic buys. Or, specific segments may prove particularly responsive mid-campaign, and supplementing with programmatic TV can boost reach among those high-performing targets. Or, it may simply be that there are certain demographics or regions where campaigns need to increase their overall frequency to be effective.

Working from a plan with a digital core may lead marketers to seek different advantages from programmatic TV. This channel offers large-screen, high-impact delivery and can be the perfect way to scale up a campaign that is exceeding expectations online and deserves a bigger screen.

All of these tactics are possible because programmatic TV’s audience is the same as America’s general linear TV-watching audience and viewers are reached in the exact same context.

P E R FO R M A N C EA great advantage of programmatic TV is that viewability and completion rates are not significant concerns. Linear TV has long been the gold standard for both viewability and completion, and it remains so with programmatic TV.

One of the key performance considerations for programmatic TV is when ads air. In-line with Americans’ viewing behavior, the largest share of programmatic TV ads air during primetime, with few appearing in the overnights. Ads also run more frequently on weekdays when consumption is higher.


P T V A D S S E R V E D BY DAY PA R T

25%Share of linear TV viewing spent during primetime2

35%Share of PTV ads placed

during primetime

Morning (16%)

Daytime (21%)

Early Fringe (16%)

Primetime (35%)

Late Fringe (10%)

Overnight (2%)

12%

10%

8%

6%

4%

2%

2am 9am 1pm 5pm 9pm 1am

P T V A D S S E R V E D BY T I M E O F DAY

F I G U R E 1 . 1

F I G U R E 1 . 2

O U T LO O KThere is no doubt that programmatic TV is still in its very early stages. Yet supply is constantly growing and, with nearly a third of agencies expecting to see large increases in programmatic TV spend3, so too is demand.

For now, most programmatic TV activity occurs in the US, but other markets are making headway. Each market has its own structure and regulations, and so each will progress at its own pace. Still, there is good reason to trust that in the near future programmatic TV will be part of marketers’ global living room strategy.

MON TUES WED THURS FRI SAT SUN

13%13%

17%17%17%

12%12%

P T V A D S S E R V E D BY DAY O F W E E K

F I G U R E 1 . 3


Connected TVConnected TVs are TV sets that can stream content over the internet, either directly or through a device. This category includes smart TVs, as well as TV sets that are connected to a gaming console or another streaming device such as a Roku. Viewers access content on these devices through a variety of apps like Crackle and A&E. For apps that feature video ads, the video unit fills the TV screen, creating an impactful and immersive experience.

For the marketer, connected TVs represent a fantastic way to reach an audience on the couch in a lean-back setting. Users customize their connected TVs by selecting their own apps and content, and such content specificity gives marketers an effective opportunity to target audiences.

Connected TVs are growing increasingly mainstream, and thereby overcoming earlier concerns about limited audience reach. More than half of US homes now have a connected TV, and that growth has stemmed disproportionately from high-income households.

42% 58%

20 30 40 50 60 70 80

U S C O N N E C T E D T V H O U S E H O L D S

F E M A L E TO M A L E R AT I O AV E R AG E AG E

College Graduates

38%Minorities

44%Household income

135KHave children

65%

2014 2015 2016 2017 2018

46% 56% 64% 70% 75%

38

F I G U R E 2 . 2

F I G U R E 2 . 1

P L A N N I N GConnected TV’s strengths lie in reaching highly targeted, highly engaged audiences. These audiences can be broad, like Univision app viewers, or narrow, like viewers of Docurama or Roku’s Netfit fitness channel. Viewers can also be targeted by device, so a marketer could direct their campaign to users connecting through a game console, for instance. Informed use of connected TV’s targeting capabilities can help advertisers unlock their unique audiences.

Building from a core TV plan, marketers can use connected TV inventory to reach high value audiences and to increase delivery on weekends when connected TV (unlike linear TV) sees disproportionate viewership. For marketers starting from a digital plan, connected TV offers extremely strong completion and viewability rates (not to mention on a much bigger screen) while still providing a high degree of targeting precision and flexibility.

C O N N E C T E D T V D E V I C E S

SMARTTV

(e.g. Roku, Apple TV, Chromecast)

STREAMING BOX

GAMECONSOLE

BLU RAYPLAYER


17%17%

14%13%13%

12%

14%

C O N N E C T E D T V I N V E N TO RY BY DAY O F W E E K

F I G U R E 2 . 3


P E R FO R M A N C EConnected TV’s performance is unmatched by most other digital formats. It is characterized by both strong completion rates and strong viewability rates. Completion rates were high one year ago - in the 80% range - and they have continued to excel, currently reaching into the 90% range.

Viewability rates on connected TVs surpass those of many pre-roll ads, so adding in connected TV to an existing digital buy can increase a campaign’s overall viewability.

C O N N ECT E D T V C O M P L E T I O N & V I E WA B I L I T Y R AT ES BY M O N T H

Completion Rate Viewability Rate

Au

g. 2

015

Jul.

20

15

Jun

. 20

15

May

20

15

Apr.

20

15

Mar

. 20

15

Feb

. 20

15

Jan

. 20

15

Dec

. 20

14

Nov

. 20

14

Oct

. 20

14

Sep

. 20

14

Au

g. 2

014

Jul.

20

14

Jun

. 20

14

May

20

14

Apr.

20

14

Mar

. 20

14

Feb

. 20

14

100%

80%

60%

40%

20%

0%

Jan

. 20

14

8%

6%

4%

2%

C O N N E C T E D T V A D S S E R V E D BY T I M E O F DAY


F I G U R E 2 . 4

F I G U R E 2 . 5

G LO BA LGlobally, connected TV’s story is one of high performance and growth, with smart TV ownership alone set to double in the coming five years. Canada4 and Australia5 lead adoption outside of the US, with connected TVs in nearly a third of homes. The format outperforms digital standards in international markets, with completion rates averaging 87%.

Though connected TV is still nascent in many global markets, growing use of streaming devices and strong ad performance are a recipe for future adoption.

Smart TV

United States

Australia

Canada

United Kingdom

Streaming Box Game Console

C O N N E C T E D T V C O M P L E T I O N R AT E S BY D E V I C E T Y P E

C O N N E C T E D T V C O M P L E T I O N R AT E S BY M A R K E T

97% 97% 93%

94%

87%

92%

76%

F I G U R E 2 . 6

F I G U R E 2 . 7


Streaming Sites & AppsSo far we have discussed TV sets as an advertiser’s means of entry into the living room. However, “living room” experiences extend beyond the TV screen and can be found wherever viewers watch television, which includes computers, tablets and phones. Online viewers have access to three types of streaming sites: service providers (e.g. AT&T, Comcast), program providers (e.g. NBC, Telemundo) and content aggregators (e.g. Hulu, DramaFever). Targeting these sites allows advertisers to reach audiences as they enjoy the living room experience from their personal devices. Streaming sites are an excellent way to reach younger audiences, who increasingly see the computer as their main TV screen. The elusive “cord cutter” market can also be seen tuning in online, specifically on sites that allow users to watch television without a pay TV subscription (content aggregators).

P L A N N I N GBecause streaming sites operate in the world of digital advertising, the planning and targeting opportunities are myriad.

Just as for linear TV, dayparting and day-of-week targeting are useful options; so too is targeting by device. Overall, computers are the most popular device for accessing streaming sites - though consumption is increasing across all screens. Viewing on computers is fairly steady throughout the day, beginning in the late morning and continuing until 11pm. Viewing on tablets and phones, on the other hand, peaks between 10pm and midnight. Streaming sites see the most activity on Mondays, Tuesdays and Wednesdays - days featuring popular broadcast television shows.


14%13%13%13%

16%16%15%

ST R E A M I N G S I T E I N V E N TO RY BY DAY O F W E E K

Marketers also have the option of targeting based on genre or network, similar to picking channels and programs in a linear TV buy. Beyond audience and engagement, this also allows marketers to consider ad to content ratio. Episodes of reality shows offer the highest ad to content ratio, followed by dramas and documentaries. The number of ads per episode has grown 83% for dramas over the past year6, granting advertisers more opportunities to run alongside gripping content.

A D S S E R V E D O N ST R E A M I N G S I T E S BY T I M E O F DAY


Computer Tablet Phone

F I G U R E 3 . 1

12%

10%

8%

6%

4%

2%

F I G U R E 3 . 2


However, one of the most important planning considerations is which type of service is providing the content. There are three possibilities to consider:

• Service Providers: sites and apps for pay TV providers (e.g. AT&T, Comcast) that require users to sign in to access content.

• Program Providers: sites and apps for television networks or programs (e.g. NBC, Telemundo) that sometimes require users to sign in with their pay TV provider to access content.

• Content Aggregators: sites and apps that bundle programs and allow users to watch without a pay TV provider; sometimes require a subscription fee (e.g. Hulu, DramaFever).

It turns out that each of these options offer different value for marketers. Service providers offer efficient VCPMs, program providers offer high viewability and content aggregators offer global reach. And of course, each comes with its own audience and demographics that are crucial in media planning.

For marketers building from a TV plan, advertising on streaming sites allows them to reach demographics who may have low linear TV consumption (like young millennials), and do so with the same content, engagement and high-quality context they expect from TV.

For marketers building on a digital plan, streaming sites offer all of the targeting options of digital, combined with high performance and a lean-back viewing experience - whether it occurs in an actual living room or not.

A D S S E R V E D O N ST R E A M I N G S I T E S BY P U B L I S H E R T Y P E

25%22%53%

Service Providers Program Providers Content Aggregators

F I G U R E 3 . 3

P E R FO R M A N C EAds served on streaming sites significantly outperform ads on other content. Many viewers undoubtedly hit “full-screen” and sit back to enjoy the show, creating a higher-impact ad experience than most pre-roll buys. Viewability rates on streaming sites are nearly 70% higher than the US pre-roll average, producing 25% more efficient VCPMs despite higher upfront costs.

V I E WA B I L I T Y R AT E S BY P U B L I S H E R T Y P E

C P M S & VC P M S BY P U B L I S H E R T Y P E

32%Service Provider

Service Provider

58%Program Provider

Program Provider

26%Content Aggregator

Content Aggregator

$28.90

$9.39

$23.20

$39.77

$9.71

$36.82

CPM VCPM

F I G U R E 3 . 4

F I G U R E 3 . 5

Streaming Sites

Pre-Roll Average

37%

22%

V I E WA B I L I T Y R AT E

F I G U R E 3 . 6


87%

82%

With limited dropoff in completion rates between 15 and 30 second ads, streaming sites and their attentive audiences allow marketers to spend more time delivering their message. Furthermore, audiences are twice as likely to watch ads through to completion while keeping the player in view - a testament to television and the power of captivating content.

15

30SECONDS

SECONDS

30%

15%

C P M S & VC P M S

ST R E A M I N G S I T E C O M P L E T I O N R AT E S

V I E WA B L E C O M P L E T I O N R AT E

Streaming Sites

Pre-Roll Average

Streaming Sites

Pre-Roll Average

$10.12

$45.10

$12.49

$34.04

PRE-ROLL AVG: 80%

PRE-ROLL AVG: 67%

CPM VCPM

F I G U R E 3 . 7

F I G U R E 3 . 8

F I G U R E 3 . 9

T V + M O B I L E : A S M A L L SC R E E NM ATC H M A D E I N H E AV E N

• Mobile’s role in television consumption has increased rapidly, with two-thirds of TV Everywhere views taking place on mobile devices.7

• Completion rates are 13% higher on streaming apps and mobile sites compared to the US mobile average.

• Apps for television networks are top performers, earning completion rates of 90%.


15 seconds

Streaming Sites

Streaming Sites

Viewability Rate

CPM (BRL)

49%

29%25%14%

Viewable Completion Rate

VCPM (BRL)

30 seconds

Pre-Roll Average

Pre-Roll Average

B R A Z I L

MEDIA QUALITY

PRICING

R$28.41R$57.96

R$23.81

R$80.62

89%

78%

G LO BA LViewers around the world tune in online. Some streaming sites have evolved globally, while others operate in specific countries to provide content unique to their regional audience. A look at the following regional spotlights makes it clear that television commands audience attention and yields strong ad performance across countries and cultures.

13%

STREAMING SITE COMPLETION RATES

81%

74%

15 seconds

Streaming Sites

Streaming Sites

Viewability Rate

CPM (GBP)

38%22%26%

12%


VCPM (GBP)

30 seconds

Pre-Roll Average

Pre-Roll Average

U N I T E D K I N G D O M

MEDIA QUALITY

PRICING

£$9.43 £$10.55£$24.77

£$47.70

F I G U R E 3 . 1 0



82%

71%

15 seconds

Streaming Sites

Streaming Sites

Viewability Rate

CPM (CAD)

33%20%25%


VCPM (CAD)

30 seconds

Pre-Roll Average

Pre-Roll Average

C A N A D A

MEDIA QUALITY

PRICING

$11.41

$34.46

$10.02

F I G U R E 3 . 1 1 F I G U R E 3 . 1 2

$49.08

13%

15 seconds

Streaming Sites

Streaming Sites

Viewability Rate

CPM (AUD)


VCPM (AUD)

30 seconds

Pre-Roll Average

Pre-Roll Average

A U S T R A L I A

MEDIA QUALITY

PRICING

$28.71 $20.09$56.73

$105.63

84%

85%

51%

19%

43%

13%

15 seconds

Streaming Sites

Streaming Sites

Viewability Rate

CPM HKD)

54%

29%36%15%


VCPM (HKD)

30 seconds

Pre-Roll Average

Pre-Roll Average

H O N G K O N G

MEDIA QUALITY

PRICING

$45.90 $33.73$85.06

$114.60

80%

75%



F I G U R E 3 . 1 3 F I G U R E 3 . 1 4


Conclusion – Planning into the Living RoomThe “living room” of the twenty-first century is full of opportunity for marketers. There is opportunity in the multiple ways viewers access content. There is opportunity in new targeting capabilities and rapid execution across mediums. And there is opportunity to reach viewers shifting away from linear TV. The distance from concept to consumer has never been so short.

At first glance, advertising in the living room programmatically can seem complex. However, the landscape is simple: viewers watch shows, movies and sports across multiple access points and devices. Marketers now have an arsenal of options to reach their audience programmatically, no matter which way viewers opt to tune in.

As always, please do not hesitate to contact us with any questions. We can be reached at [email protected] or tweet @TubeMogul with the hashtag #TMResearch.

PATH TO LIVING ROOM

TV-CORE MARKETERS SHOULD:

DIGITAL-CORE MARKETERS SHOULD:

Programmatic TV Use data-driven targeting to reach viewers that are difficult to reach with standard linear TV targeting

Build frequency among key segments with rapidmedia execution

Expand reach within yourtarget audience

Enhance the impact of adigital campaign that isseeing success

Take advantage of of inventory on larger screens with higher viewability and better completion rates

Connected TV Reach audiences with low rates of linear TV consumption

Take advantage of of inventory on larger screens with higher viewability and better completion rates

Streaming Sites and Apps

Use data-driven targeting to reach viewers that are difficult to reach with standard linear TV targeting

Reach audiences with low rates of linear TVconsumption

Take advantage of of inventory on larger screens with higher viewability and better completion rates – with all the advantages of digital targeting

Improve VCPMs andviewable completion rates


TermsC O N N E C T E D T VInternet-connected devices including set-top boxes, game consoles and smart TVs that stream content to TV sets via apps.

L I N E A R T VScheduled television that is watched on a TV set as it airs or is recorded for time-shifted viewing.

O V E R - T H E - T O P ( O T T )Content that is streamed over the internet and is available to watch at any time.

P A Y T VTelevision that is accessed through a cable or satellite subscription.

P R O G R A M M A T I C T VThe use of software-based systems to plan, buy, measure and optimize television advertising.

P T VTubeMogul’s programmatic TV solution.

S T R E A M I N G S I T E S A N D A P P SServices that allow users to stream television to their personal devices over the internet.

S E R V I C E P R O V I D E R SSites and apps for pay TV providers (e.g. AT&T, Comcast) that require users to sign in to access content.

P R O G R A M P R O V I D E R SSites and apps for television networks or programs (e.g. NBC, Telemundo) that sometimes require users to sign in with their pay TV provider to access content.

C O N T E N T A G G R E G A T O R SSites and apps that bundle programs and allow users to watch without a pay TV provider; sometimes require a subscription fee (e.g. Hulu, DramaFever).

T V E V E R Y W H E R EContent that requires credentials for a pay TV subscription to watch. Also called “authenticated viewing”.

V I D E O O N D E M A N D ( V O D )On-demand offerings from a pay TV provider - including both linear and pay-per-view content - watched on a TV set.


MethodologyF I G U R E 1 . 1 – 1 . 3Source: TubeMogul platform dataAd Format: PTVRegion: USSample Period: May 2015 - August 2015

F I G U R E 2 . 1eMarketer, “US Connected TV Households, 2012-2018”, June 2014.

F I G U R E 2 . 2 : Experian Marketing Services, “The Internet of Thing: Opportunities Through the Rise in Smart Devices”, November 2014 via eMarketer.

F I G U R E 2 . 3 : Source: TubeMogul platform dataAd Format: Connected TV Region: USSample Period: January 2014 - March 2015

F I G U R E 2 . 4 :Source: TubeMogul platform dataAd Format: Connected TVRegion: USSample Period: January 2014 - August 2015

F I G U R E 2 . 5 – 2 . 6 : Source: TubeMogul platform dataAd Format: Connected TVRegion: USSample Period: January 2015 - March 2015

F I G U R E 2 . 7 : Source: TubeMogul platform dataAd Format: Connected TVRegions: Australia, Canada, US, UKSample Period: April 2015 - June 2015

F I G U R E 3 . 1Source: TubeMogul platform dataAd Formats: Desktop Pre-roll, Mobile Pre-Roll, Phone Interactive In-App Pre-Roll, Tablet Interactive In-App Pre-RollRegions: New York, Philadelphia, Washington D.C., Chicago, Houston, Dallas, Los Angeles, San Diego, San Jose, San FranciscoSample Period: April 2015 - June 2015

F I G U R E 3 . 2Source: TubeMogul platform dataAd Formats: Desktop Pre-roll, Mobile Pre-Roll, Phone Interactive In-App Pre-Roll, Tablet Interactive In-App Pre-RollRegion: USSample Period: April 2015 - June 2015

F I G U R E 3 . 3 – 3 . 9Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: USSample Period: May 2015 - July 2015 F I G U R E 3 . 1 0Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: CanadaSample Period: June 2015 - August 2015 F I G U R E 3 . 1 1Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: BrazilSample Period: June 2015 - August 2015

F I G U R E 3 . 1 2Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: UKSample Period: June 2015 - August 2015


Methodology continuedF I G U R E 3 . 1 3Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: AustraliaSample Period: June 2015 - August 2015 F I G U R E 3 . 1 4Source: TubeMogul platform dataAd Format: Desktop Pre-RollRegion: Hong KongSample Period: June 2015 - August 2015

Sources1 Leichtman Research Group Inc. (LRG), “Emerging Video

Services IX”, May 2015 via eMarketer

2 Media Dynamics, “TV Dimensions 2015”, February 2015 via eMarketer

3 BrightRoll, “2015 Advertising Agency Survey,” February 2015 via eMarketer

4 Media Technology Monitor, “Spring 2014” as cited by Canada Media Fund “Trends Report: The Big Blur Challenge”, January 2015 via eMarketer

5 Nielsen, OzTAM and regional TAM, “Australian Multi-screen Report: Quarter 1, 2015”, June 2015 via eMarketer

6 Adobe Digital Index, “U.S. Digital Video Benchmark Q2 2015”, September 2015

7 Adobe Digital Index, “U.S. Digital Video Benchmark Q2 2015”, September 2015

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