Instead of scaling back regional buys, automakers will be able to target car shoppers
For automotive manufacturers looking to reach potential buyers, buying TV ads with the NFL has been one of the most consistent – and expensive – ways to build their brand at scale in the U.S. Auto brands have long been one of the top categories spending TV budgets in football. From 2001 until 2014, GM was the official sponsor of the NFL. This year, Hyundai took over that top slot, to the tune of $50M per year.
The audience is huge – NBC’s Sunday Night Football is routinely the highest rated program each week according to Nielsen. Viewers are watching the NFL live each week, not on DVR, and nothing quite says reach and frequency like the top-rated sports programming in the country. For Hyundai, it’s an obvious pick to raise awareness of the Hyundai brand with a huge swath of the U.S. population.
Big, national spending like the NFL makes sense to build your brand over the long term and compete to be in every auto buyer’s consideration set. But a massive NFL buy isn’t a cure-all. What about viewers who aren’t interested in football? Or when budgets are limited and cost effectiveness matters most? Ultimately, that’s the vision for programmatic TV – the ability to target a specific audience to improve campaign performance and bring incremental reach.
For example: Last December, Hyundai saw a decline in sales, and decided to shift its automotive budgets to only focus on the brand’s top 50 markets in the U.S., cutting its regional spending for 36 markets. Could programmatic advertising have helped those 36 markets spend TV dollars more effectively?
The current addressability spectrum
Programmatic TV is one of the phrases that the ad tech industry has ruined. Let’s talk about what really matters, which is how addressable the TV content is. At one end of the addressability spectrum, you have digital video. Online video sites, mobile video, full episode players, where ad inventory is increasingly sold programmatically.
Here, audience targeting and real-time bidding play big roles because advertisers are sometimes focused on finding their audience, rather than focusing on content. For advertisers, online behaviors, combined with other data sets drive targeting, and ideally, that information also plays a role in determining which creative is used. If you’re a Hyundai dealership group in a smaller market, this means looking for consumers who have been hitting Edmunds.com or Kelley Blue Book to do research on new cars, and have cookies in their browser indicating this intent. Showing ads to these consumers is an easy way to focus dollars on the customers most likely to walk into a showroom in the next month.
At the opposite end of the addressability spectrum, you have local linear broadcast TV. While programmatic is making inroads into local broadcast TV, most inventory is still sold directly by sales reps. If an advertiser is able to target a given program, they’re buying that show as a proxy for audience, rather than targeting specific audience segments. Since the inventory is delivered locally on broadcast networks, household level addressability is not possible with local linear broadcast.
If you’re a regional Hyundai dealership group, what’s your best bet in local? Companies like WideOrbit have made it possible to buy local broadcast spots programmatically. Combined with Rentrak as a data source, that means Hyundai could look for the DMAs, dayparts and programs where auto buyers over-index, and spend a limited budget on spots that have the best odds of success.
Between these two extremes there is a fast-changing middle ground where addressability has been entering the equation in a big way. Over-the-top (OTT) devices like Roku and ad-supported streaming VOD apps like Sony Crackle bring TV content to the living room (and elsewhere) via the Internet, and are fully addressable. And some MVPDs are also plunging into programmatic, like Cablevision and Dish Network. All of these players give a regional Hyundai dealer a better way to reach the audience they really want at the household level.
What does this mean for automotive advertisers?
For automotive advertisers, this story is about efficiency, and about aggregating an increasingly fragmented audience watching a lot of different screens. But instead of carpet-bombing that audience, advertisers can use tools developed for online media buying to further segment their audience based on data sets from multiple sources.
For example, Hyundai could start by targeting car shoppers broadly across many of the options mentioned above. But going a step further, Hyundai could also segment its audience by age, income, affinities, and registration data so that viewers only see ads for cars they’re most likely to consider. The buyer looking at the Tucson SUV doesn’t need to see the luxury Genesis sedan ad.
Naturally, digital media buying tools improve the efficacy, but they also enhance the customer experience, something all advertisers should be cognizant of in the age of ad blockers. If used intelligently, these tools allow advertisers to better manage frequency capping and exclude customers who aren’t in the market for a new vehicle, like those who made a recent purchase. Put simply: you can stop paying to annoy people who aren’t in the market for a new car.
That means that Hyundai and its agencies could soon have a more holistic view of their cross-screen spending efficiency. Maybe targeting in-market automotive shoppers on Hulu is the best bang for the buck. Or maybe, it’s more effective to carpet-bomb a local broadcast market. The point is not that one end of the spectrum is superior, but rather that the vision for programmatic TV is to empower advertisers to seek the highest quality audience as efficiently as possible.
Brian Stempeck is chief client officer for The Trade Desk, and oversees all of the company's relationships with agencies and advertisers. Stempeck leads The Trade Desk's New York office and specializes in educating agencies about the evolving world of real-time bidding, and helping them develop and manage online marketing strategies for clients