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IN THE AGE OF THE DISTRACTED VIEWERTV VIEWABILITY

FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

KEY FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

IS YOUR TV ADVERTISING VIEWABLE? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A CROSS-DEVICE APPROACH DRIVES 72% HIGHER CONVERSION . . . . . . . . . . . . . . . . . . . . . . . . . 5

HOW AND WHEN TO TARGET TV VIEWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

REAL WORLD EXAMPLE: STREAMING PROVIDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

REAL WORLD EXAMPLE: GLOBAL AUTOMAKER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

TOP TAKEAWAYS FOR MARKETERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ABOUT VIANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

TABLE OF CONTENTS

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1 ISH Markit report, 2016, via eMarketer interview

Today, there’s a pretty good chance that viewers didn’t watch the TV ads they were exposed to, even if they were sitting just feet away when they aired. Instead, they were fast-forwarding via their DVR, channel surfing or just busy scrolling through their favorite websites, shopping or researching unrelated topics on their smartphone or tablet. TV viewers today are more distracted than ever before.

The average U.S. household today has 13 connected devices1, and at any given time, TV viewers’ noses might be buried in their phones even though a sitcom is on in front of them. It follows that the presence of additional screens has led to lower attention spans, which in turn have created a challenge for marketers looking to break through the clutter.

And yet, TV advertising has not been held to the same standards as digital content. TV advertisers still base their decisions on an ad being shown, but they’re not considering whether an ad that airs in someone’s living

room is truly seen, and not ignored in favor of other content on an alternate screen or skipped altogether.

That’s why we’ve decided it’s time to introduce the concept of TV viewability, the notion that today’s consumers are increasingly difficult to reach via linear television advertising, thanks to the many connected devices and technologies available as they’re sitting down at home, ostensibly, to watch TV.

The good news is, it’s possible to break through the noise and distraction, and the solution lies in a cross-device, people-based approach. As we’ll explain in the pages that follow, marketers must also leverage TV viewers’ increasing alternatives to linear TV, especially over-the-top (OTT) content. In addition, we’ll outline marketers’ biggest struggles in getting through to consumers in this multi-screen era of peak distraction and break down real, actionable solutions to increasing awareness and driving conversion through comprehensive TV advertising programs.

FOREWORD

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86% of marketers agree that it’s getting harder to grab a consumer’s attention with television advertising alone.1

82% of marketers believe TV viewers’ second screens and/or advertising clutter are limiting the success of their television advertising campaigns.

2

57% of marketers reported that their 2018 planned spend on linear TV was the same or less than in 2017.3

52% of TV viewers changed the channel during a typical network/cable advertising pod, reinforcing lack of ad viewership.

4

TV viewers' second screen behavior changes depending on the type of programming they're watiching and the time of day in which they're watching.

5

People exposed to TV ads who were then retargeted on a companion device within three hours were 72% more likely to convert within a day.

6

Emerging OTT content channels enable marketers to reach viewers in a television-like environment – but with the precision of digital targeting.

7

To drive meaningful impact, marketers must connect with consumers seamlessly across all of their devices.8

KEY FINDINGS

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Top 5 Digital Activities Conducted While Watching TV* Among U.S. Multidevice Users, by device, March 2017% of respondents

Note: Ages 18+; among those using each device while watching TV/digital video on a TV screen; *includes traditional TV/digital video content streamed on a TV screen Source: Interactive Advertising Bureau (IAB), "The Changing TV Experience: 2017," May 10, 2017 | eMarketer.com

DESKTOP / LAPTOP

Catch up on news

Browse internet, unrelated to the video

Email, unrelated tothe video

Shop online

Check bills/finances

77%

73%

64%

60%

56%

SMARTPHONE

Search info about/post about something else

Check social media, unrelated to the video

Email, unrelated tothe video

Browse internet, unrelated to the video

Catch up on news

72%

67%

66%

55%

53%

TABLET

Browse internet, unrelated to the video

Email, unrelated tothe video

Shop online

Check social media, unrelated to the video

Play games

64%

56%

54%

54%

51%

The challenge here for advertisers is that TV viewers might be physically present while commercials air, but not fully mentally present. They’re distracted by any number of options available on their laptops, tablets or smartphones – they’re

shopping, playing games, reading news, checking email. And it doesn’t matter whether they’re Millennials or Baby Boomers; TV viewers are distracted across the board.

Number of Digital Ad Requests Received

30 MINUTES BEFORE WATCHING TV PROGRAM

WHILE WATCHINGTV PROGRAM

COMMERCIALS/CHANNEL FLIPPING

30 MINUTES AFTER WATCHING TV PROGRAM

8.7

6.0

9.0

6.6

8.7

5.8

8.8

6.5

MOBILE

DESKTOP / LAPTOP

Source: Viant Data

The era in which families sat down together around their televisions – and only their televisions – is over. Adults in the U.S. currently spend more time with their TVs than any other media2, though a growing segment is consuming commercial-free OTT content like Netflix and Amazon Prime and many are using their DVRs to record programs for later viewing, often skipping commercials. On top of that, the vast majority is also reaching for companion devices while the TV is on. And yet, while much has been written about digital ad viewability standards, TV is erroroneously credited with 100% viewability.

According to a 2017 report from Deloitte, 89% of U.S. smartphone owners reported using their phone while watching

TV. And lest you think they’re only paying attention to their phones sporadically, in reality they’re engaging with their devices as much during TV programming and commercials as they are during the 30-minute window before and after, as illustrated by the chart below.

As we can tell by the number of digital ads served before, during and after TV viewing, second screen engagement doesn’t change significantly. This is the case regardless of time of day or day of the week. What we can deduce here is that people are as active on their companion devices during TV viewing as during other times.

2 eMarketer: Mobile Time Spent 2018

IS YOUR TV ADVERTISING VIEWABLE?

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Such concerns are backed up by a study conducted by The Ohio State University a few years ago that revealed that TV viewers struggle to recall brands they see or hear about on TV if they’re using other devices at the same time3. In that study, participants who focused solely on their televisions were able to recall an average of 2.43 out of every three brands mentioned, while those who also interacted with a second screen only managed to remember only 1.63 out of three brands mentioned.

Which brings us back to the issue of digital viewability. According to compiled research from Digiday, up to 54% of digital ads aren’t viewable4. Viewability metrics vary greatly,

but have had a significant effect on how digital media is bought and sold, because there’s a consensus that not every ad served is actually seen.

In recent years, some companies have explored the idea of a viewability standard for television, but haven’t accounted for viewer distraction. As we’ve outlined, research proves that TV viewers aren’t seeing every ad; in fact, 83% of DVR owners admit to skipping ads most of the time5. Add in channel surfing during lengthy TV ad breaks and the idea of viewability in television becomes even more important for brands to consider when evaluating performance and effective allocation of advertising budgets across devices and formats.

What are the factors limiting the success of your TV advertising campaigns?

Source: Viant survey (Respondents were permitted to select multiple answers)

45.8% Consumers are distracted by their second screens

43.8% Cord cutters make target audiences harder to reach

36.2% Difficulty in breaking through the ad clutter

To what extent do you agree or disagree with this statement?

“It’s getting harder to grab a consumer’s attention with television advertising alone.”

86%AGREE

8.8%NEITHER AGREE NOR DISAGREE

5.2%DISAGREE

Source: Viant survey

3 The Effects of Second Screen Use on Sponsor Brand Awareness, Journal of Consumer Marketing, 2015 4 Digiday WTF is Viewability, 2014 5 MediaPost; Hub Entertainment Research

DESKTOP / LAPTOP

SMARTPHONE

TABLET

Note: In the past week

Source: YuMe and Nielsen, "Connected TV Fast Forward," January 8, 2018

eMarketer.com

MILLENNIALS (20-36)

68% 68%

24%

GEN X (37-51)

63%

52%

26%

BABY BOOMERS (52-69)

56%

39%

25%

TOTAL (18+)

61%

51%

25%

Device Used Simultaneously While Watching TV Among U.S. Internet Users, by Generation, July 2017% of respondents in each group

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Tying ad exposure to online sales

56.6%Tying ad exposure to

in-store sales

45.8%Tying ad exposure to

store visits

37.4%Not currently measuring ROI of

our TV advertising campaigns

17.8%

How are you currently measuring the ROI of your TV advertising campaigns?

Source: Viant survey (Respondents were permitted to select multiple answers)

A CROSS-DEVICE APPROACH DRIVES 72% HIGHER CONVERSION

Now more than ever marketers need a full 360-degree view of their target audiences and must connect with people across all of their devices.

It’s critical to acknowledge that customers switch between screens constantly (e.g., from their TV to their phone to their laptop) and also use them simultaneously. A seamless experience among devices is all but mandatory, for both the advertiser and the customer. Consider this: In one Viant campaign, people who saw a brand’s ad on TV and then were targeted with a digital ad within a few hours were 72% more likely to convert within a day.

As we mentioned earlier, the DVR has had a large effect on TV advertising, as most owners of the technology admit to fast-forwarding past commercials. Aware of this, marketers at first sought to increase the number of ads running during TV programming, which hurt the viewer experience. Now, as a growing number of TV viewers are turning to OTT content, linear TV networks have pivoted and some are now decreasing commercial time.

57% of marketers said they planned to spend the same amount, or less on television advertising in 2018.

More than 40% believe TV ad spend is less effective than it was 5 years ago

For marketers, this creates both a challenge and an opportunity to reach distracted viewers. OTT content enables marketers to reach viewers in a television-like environment – providing the sight, sound and motion of TV. According to eMarketer, the number of viewers of OTT content will grow to 198.6 million this year.

Despite all of this, more than a third of marketers report never having run a campaign in which they retargeted viewers of TV ads on a companion device. Another quarter say they’ve only tested the approach once. On top of that, 66% percent of marketers wish they could tie TV ad exposure to in-store sales, but less than 50% of those surveyed said that they’re doing so.

Clearly, marketers are missing out on opportunities to leverage technologies available today that can help them reach their target audiences, even with distraction at an all-time high. They’re also giving up an opportunity to measure the impact their TV and digital ad campaigns have on driving important KPIs, like in-store sales.

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It’s imperative for marketers to make television and digital advertising work together in order to achieve their goals. Now, we’re going to provide some insights into how.

Leveraging Viant’s® Advertising Cloud, we were able to examine TV viewership data via automated content recognition (ACR) in conjunction with corresponding digital ad requests. We’ve found that a variety of factors impact whether viewers are more active on competing screens during commercial breaks or programming itself.

HOW AND WHEN TO TARGET TV VIEWERS

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Source: Viant Data

MOBILE

MORNING7AM - 10AM

REST OF THE DAYAVERAGE (10AM - 8PM)

PRIMETIME8PM - MIDNIGHT

DESKTOP MOBILE DESKTOP MOBILE DESKTOP

9.88.5

6.3

9.4

6.87.1

AD CALLS WHILE WATCHING TV PROGRAM

Regarding time of day, TV viewers are more active on their companion devices during morning TV viewing (before the standard workday begins) and during primetime viewing hours in the evening. DAYPART

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Source: Viant Data

30 MINUTES AFTERWATCHING TV PROGRAM

4%

6%

-2% -2%

NON-LIVE SPORTSPROGRAM

NBAGAME

MOBILE

DESKTOP

AD CALLS AFTER VIEWING NBA GAME VS. NON-LIVE SPORTS PROGRAM

The exception to the general rule, however, is live sports. Sports viewers turn to their companion devices at an increased rate after the conclusions of games compared to average TV viewers, perhaps to check box scores or read postgame breakdowns. This does not occur when watching sports-related programming that doesn’t include live competition (e.g., ESPN’s SportsCenter).

Below is a chart that details digital ad requests during NBA basketball that illustrates the behavior.

SPORTS

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Source: Viant Data

30 MINUTES BEFORE WATCHING TV PROGRAM

WHILE WATCHINGTV PROGRAM

COMMERCIALS /CHANNEL FLIPPING

30 MINUTES AFTER WATCHING TV PROGRAM

10.6 10.4 11.29.5

9.5 9.110.5

8.7

MOBILE AD CALLS DURING MORNING SHOWS

Second screen activity is at its highest during morning shows, particularly during commercials. Activity drops quickly after those shows end (again, likely because people are going to work), and desktop activity increases. MORNING

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Marketers can utilize these valuable cross-device insights to create effective strategies that help overcome the viewability challenges that TV presents. By understanding when users are more active on companion devices during various TV programming, marketers can tailor campaigns to benefit

accordingly. For example, TV viewers are highly engaged during live sports programs and then become quite active on their devices after games end. Knowing this, a brand could run TV ads during a game and retarget viewers with digital ads in the period after its conclusion to complete its story.

CONCLUSION

MOBILE DESKTOP MOBILE DESKTOP MOBILE DESKTOP

8.88.3

5.8

9.4

7.45.9

(DRAMA)(DRAMA)

(COMEDY)

AD CALLS WHILE WATCHING TV PROGRAM

Source: Viant Data

Timing also matters when targeting audiences of specific types of programming. To demonstrate this, we compared viewers of drama shows (Law & Order: SVU and NCIS) to sitcom viewers (The Big Bang Theory). We found comedy watchers are more active on their companion devices during shows than viewers of drama.

SHOWS

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31,472 18%

TOTAL UNIQUE TV VIEWERS

TUNE-INRATE

An OTT content provider approached Viant with the goal of driving tune-in.

By capitalizing on the fact that TV viewers are using companion devices frequently in the evening (during primetime hours), Viant helped the client target known viewers who had used the OTT service at least once but have not returned for some time using custom smartphone ads when the smartphone was connected to their household IP and the TV was on.

In this example, Viant leveraged the viewers’ household IP addresses because this was an indicator that viewers were home, increasing the likelihood that they had access to their televisions. This resulted in an 18% tune-in rate over a 15-day conversion window for the lapsed target audience group.

STREAMING PROVIDERREAL WORLD EXAMPLE

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58%52%

90%

20%DESKTOPMOBILE

CONVERSION RATE INCREASE

more likely to convert than TV ad alone within 1 day

72%more likely to convert than TV ad alone within 7 days

34%SAW AN AD ON TV AND A DIGITAL AD WITHIN 3 HOURS

A global auto brand came to Viant looking to drive conversion and increase sales.

In this example, people who were shown the auto brand’s advertisement on TV were then targeted with a digital ad within a few hours were 72% more likely to convert within 24 hours as those who were exposed to the two ads, but not in close proximity. Those targeted with both a TV ad and digital ad were 34% more likely to convert than those who were only shown the ad on TV.

This is a phenomenon that occurs regardless of the kind of second screen device in question – across laptop computers, tablets or mobile devices.

GLOBAL AUTOMAKERREAL WORLD EXAMPLE

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1TV IS NOT 100% VIEWABLE AND IS HAVING LESS IMPACT AS A STAND-ALONE ADVERTISING MEDIUM

In fact, 86% of marketers agree that it’s getting harder to grab a consumer’s attention with television advertising alone.

A CROSS-DEVICE ADVERTISING APPROACH IS KEY TO MAXIMIZE RETURN

To drive impact, marketers must connect with consumers seamlessly across all of their devices. We know the vast majority of television viewers are using other devices while they’re watching; to truly gain their attention, it’s necessary to reach them on their companion devices too.

2

TIME MATTERS...

As illustrated in Viant’s research, television viewers are most active on their companion devices at various times during TV programming. It’s key for marketers to leverage these types of insights to maximize campaign engagement based on the most effective combination of TV and digital ad exposure.

3

... AND TIMING MATTERS

Retargeting with minimal delay can drive strong results. TV viewers who are retargeted with a digital ad within three hours of being exposed to an ad on television are significantly more likely to convert than viewers who saw both ads outside that window.

4

PAY ATTENTION TO PROGRAMMING TYPE

TV viewers’ behavior in regard to their second screens changes depending on the type of programming they’re watching. Live sports viewers are more active on their devices after the conclusion of games, while morning talk show and drama viewers are engaging with their devices during TV viewing.

5

TOP TAKEAWAYS FOR MARKETERS

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The primary sources for these findings are live TV viewing data from Viant’s network of 12 million homes monitored with automatic content recognition (ACR); digital ad impression data from Viant’s Advertising Cloud; and Real-Time Bidding (RTB) ad requests, which capture digital ad opportunities fulfilled outside of Viant’s platform. These findings also include online conversion behaviors measured through pixels placed on client websites.

Additionally, Viant based parts of this paper on a survey, commissioned by independent market research company Censuswide, of 500 marketing decision makers at U.S. companies in July 2018. Each respondent was asked to complete a questionnaire about their opinions and experiences in linear television advertising.

Unless otherwise stated, all statistics referenced relate to Viant’s data or the above-mentioned survey.

METHODOLOGY

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Viant Technology LLC is a premier people-based advertising technology company, enabling marketers to plan, execute, and measure their digital media investments through a cloud- based platform. Built on a foundation of people instead of cookies, the Viant Advertising Cloud provides marketers with access to over 250 million U.S. registered users, infusing accuracy, reach, and accountability into cross device advertising.

Founded in 1999, Viant owns and operates Adelphic and is a member of the XUMO joint venture.

In February 2018, Meredith Corporation (NYSE: MDP) acquired Viant parent company Time Inc. (NYSE:TIME) and all its subsidiary companies, creating a cross channel ecosystem of nearly 200 million unduplicated American consumers every month, including 85 percent of U.S. Millennial women. Viant is a 2018 Inc. Magazine Best Workplaces award winner. For more information, please visit viantinc.com. Or contact: Daniella Krieger, VP, Marketing & Communications, dkrieger@viantinc.com.

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