CES 2017: It’s Not Just About Gadgets
Wrapping up at CES 2017, most people left buzzing about a few main topics. If they weren’t talking about AI, they were talking about wearables; if they weren’t talking about AI and wearables, they were talking about AI and wearables. Or about virtual reality, or augmented reality, or virtual and augmented reality. And, the most quintessential CES topic of all – advancing evolution for autonomous vehicles and IoT.
But as much as I love gadgets, what was most notable to me this year was the ad industry subculture that has slowly been developing at CES. And it’s not surprising, because we live in a time when the lines between gadgets and media opportunities are blurring – today, there are advertising opportunities everywhere we look.
Over 170,000 annual attendees flock to Las Vegas every year to learn about the latest trends, gadgets and peeks into the future. Of the massive numbers of attendees, about 10,000 come specifically about the dynamic advertising industry. Mad men and women, marketers, media and Ad Tech executives convene (primarily in hotel suites) to talk about the roughly $500B dollar global advertising industry.
Given the opportunity to hear and speak to leaders across partners, clients and vendors, CES is the perennial show that everyone loves to hate for the meeting volume, late nights/early breakfasts, hangovers and long taxi lines. But for me, there’s another layer for those of us in ad tech. There is an incredible opportunity to continue pushing cross screen video packaging to deliver the promise of optimized delivery of the right creative/message (to consumers), efficiency (to the agency), results (to the brands) and underneath it all - yield optimization (to the media companies themselves).
After dozens of great meetings, there were five common themes and highlights that kept coming back:
Legacy Tech and New Tech – The existing technology stack for traditional distribution was created primarily to support a large local sales model down to the head end. Digital, IP and addressable technologies have been bolted on separately. There isn’t a common intelligent allocation layer that spans these legacy technologies/screens. Nor were those technologies truly built to yield optimize against new sales channels. The individual silos at companies are trying to either wait for convergence for full IP delivery and/or cobbling together a mix/match manual strategy to Band-Aid the issue. In other words, fake it til you make it.
Addressable/Dynamic Ad Insertion (DAI)– There is an old adage that says “just because you can – it doesn’t mean you should”. The advancements in addressable and DAI technology have increased dramatically through the past few years and we are now at approximately 46% of US households that are capable of dynamic ad insertion. This represents a strong number, but when you apply the method for how the buy side currently applies CRM lists to custom match per cable operator and the size of the audience, match rates, etc., the budget opportunity fractionalizes quickly and is rarely mixed into a larger blended cross-screen strategy. Brands do seek to augment/supplement traditional tactics and expand their budgets. Therefore, there is a tremendous opportunity to use addressable/DAI for much more than direct household activation.
Data – Nielsen and Comscore drive the most common guaranteed method of buying media – demo targeting. But I expect we will see new entrants – from both traditional MVPDs and the “barbarians at the gate”/disruptors – come to market with larger scale for demo measurement. Beyond demo data, we expect that there will be continued testing with some level of secondary reads on strategic/behavioral targeting. In fact, at CES I continued to hear about clients who are buying with guarantees against strategic/behavioral targets.
Over-the-Top (OTT) – The definitions here are complicated for large programmers/broadcasters by the fact that MVPD, ISP, Programmer and TV/other devices are all offering some version of IP delivered content (some of which originate from a set-top box in your living room either time-shifted or live). Regardless of the acronym merry-go-round, there is clearly a need for large programmers to understand and utilize a common identifier for targeting demo and beyond. IP targeting is one of the ways that folks are solving for the solution outside of directly contracting with every device, service or MVPD in the marketplace that has the last mile; there are also a number of companies working on their own universal ID’s/graphs. But ultimately the ad decision needs to comprehend and optimize on a common standard/identifier. That leads me to cross screen…
Cross-Screen – We can link all four of the above topics to the hottest discussion for all folks in our industry. The challenge is to enable cross-screen delivery of a brand message easily at scale and efficiently. One major media company President simply stated to me in a meeting “I’m not waiting 3-5 years for the perfect solution. I want a solution to start with today to deliver results to my clients. We will perfect it over time but we have to start somewhere”.
The industry has all the components to solve for each of the above but we are still fragmented by disparate technology and splintered interests within traditional media (both within peer companies as well as a supply vs demand mentality).
In a world where Google, Amazon, Facebook and others are acquiring media assets almost monthly, there is a dwindling window of opportunity for traditional media companies to adopt ecosystem technologies and alliances to drive the conversation for the next decades. The time is now.
I am excited to be a small part of that conversation globally and look forward to the next set of discussions at NAB, INTX, Cannes, Beet, TVOT and finally 2018 CES where we start all over again.