After a recognition that proxy metrics like “clicks” didn’t necessarily translate in to real goals, like sales, certain publishers and even TV operators are now doing just that, offering “guaranteed” outcomes in return for ad spend.
But, is “outcome”-based pricing really effective?
In this panel discussion Beet Retreat in the City, “We’re Going Local!”, Joe Marchese, Attention Capital CEO, and Joanna O’Connell, Forrester Research principal analyst, poured suspicion on the new trend in ad pricing…
“I don’t believe ROI is actually the input for advertising, ROI is an output,” Marchese said. “The ROI is what you seek. You don’t get to buy ROI.”
O’Connell concurred. “I get very nervous when I see people moving to these very outcomes-based models, and I just think, ‘I think you’re missing something really important and I’m not sure you totally know it’, and that makes me super nervous.”
Marchese replied: “Here’s what I don’t understand about outcomes. Aren’t they working (both) with Ford and Toyota? Like, which one (brand) are they promising the outcomes to for real? Outcomes are possible on a relative basis.”
Marchese and O’Connell voiced concern that, in the new push to offer outcomes-based ad pricing, some on the sell side may be constructing an incorrect causal link between an advertising exposure and real business health.
Marchese said he suspects “spoofing of ROIs and the mis-attribution and reverse engineering” are gathering pace.
“How do these brands that are collapsing keep getting ROI reports that say it’s working?,” he asked the conference.
Marchese is the former CEO of true[X], the ad-tech company that seeks to make TV ads more engaging to viewers through interactivity, incentivising them to trade that engagement for lower ad volume. Now he has launched an investment firm called Attention Capital , which has taken a controlling stake in the Tribeca Film Festival and plans further investments.
“Data’s a good thing, but we have wildly swung too far,” he told O’Connell. “Attention is more important than data.
“You think we incept human beings? You think your consumers are that dumb that they weren’t going to go eat that thing and then you put it in front of them? (Rather), it’s a build over time.”
Marchese said modern advertising had the power to play a wider part in consumer conversations than even content these days, because the latter is so abundant and because viewers are no longer all viewing at the same time. But he criticized the culture that data-driven thinking had infused in advertising.
“We had perverse incentives that said ‘We need more impressions, they don’t have to be good or bad, we just need more of them’.
“We had really bad measurement. It was binary – ‘it either is or is not an impression’ – rather than some sort of gradient. And we kind of looked past the fraud and we had an over-belief that data would solve everything.”
This video is part of a series from the Beet Retreat in the City, “We’re Going Local!” hosted by GroupM Worldwide and sponsored by Amobee, Comcast Spotlight, TVSquared and WideOrbit. Please visit this page for additional segments.
]]>Yet, fast-forward to 2019, and it seems proliferating content plus diminishing, an obsession with data and ad supply chain issues are posing new challenges to the idea.
That is why Joe Marchese, the executive who led a company trying to make ads more engaging, has now launched an investment firm called Attention Capital.
Joe Marchese’s firm has first taken a controlling stake in the Tribeca Film Festival, alongside James Murdoch’s Lupa Systems. Next up, he wants to put more targets in his portfolio.
“The plan will be to buy control stakes in media brands or iconic brands that are permission-to-curate,” Marchese said during a discussion at Beet Retreat in the City. “And then scale those brands with technology, scale those brands geographically in new business lines.
At Beet Retreat, Marchese was interviewed by Joanna O’Connell, Forrester principal analyst.
“We think the curation layer is what’s missing from media brands,” he added. “In the open web … right now the AI is curating content for people. And I think people are looking for something a little different.
“And then (with) media technologies … how are we going to measure attention better? How are we going to access attention, respecting consumers a little bit better? And how are we going to monetize attention in ways that it’s consumer-friendly?”
That last part may sound familiar. Because Marchese is also the former CEO of true[X], the ad-tech company that seeks to make TV ads more engaging to viewers through interactivity, incentivising them to trade that engagement for lower ad volume.
The company was acquired by Fox Networks Group, where Marchese became president of advanced advertising and advertising revenue. He had also been on Tribeca’s board since 2015.
Attention for new-style ads needs to be boosted, because attention for traditional ads is declining, Marchese added.
“If you account for consumer experience, meaning that they abandon watching in particular areas, and if you accounted for the amount of fraud or fraudulent impressions that are out there, the number of people watching real ads is shrinking at a rate at which I think it actually should be profitable to have good experiences that people are willing to sit through ads for,” he said.
“The market, I don’t think, recognizes it, but that is how you make it profitable.”
This video is part of a series from the Beet Retreat in the City, “We’re Going Local!” hosted by GroupM Worldwide and sponsored by Amobee, Comcast Spotlight, TVSquared and WideOrbit. Please visit this page for additional segments.
]]>“I feel that more and more TV is getting baited into trying to become a performance outlet,” the President of Advertising Revenue says in this interview with Beet.TV at the recent EGTA Future of TV Advertising Forum 2018.
“The biggest thing would be to make sure you’re not fighting a fight that you can’t win or being tricked into fighting the wrong fight.”
Marchese says he understands why “the ideal” would be to say “prove performance and then I can spend more money there. But the truth is, performance is that I get people to sit there and watch the ad. That’s what TV does.”
He notes that TV has always performed by helping to build brands over periods of time. But there’s more of a balancing act going on among networks to let consumers “dictate how many ads are tolerable. I’m looking for a better way to say it, but tolerable it is.
“People think if the ads are good enough, people will like them. No. Advertising is an interruption. It’s not what you came there for.”
Asked about household addressable TV ads, Marchese points to such shortcomings in the quest for performance as co-viewing, wherein it’s hard to determine what person among several who are watching a Sunday football game is actually being addressed, and going too far with person-specific targeting.
Brands are built not only on advertising but also on cultural, family and familial ties, among other things, according to Marchese. “Take it to the extreme. It feels odd to say, ‘Imagine a world where we can perfectly target only the people we think are going to buy the product.’ Then what would the brand mean anymore if no one else ever saw it? No one would know what that brand stands for, so what difference does it make if the person’s wearing it?”
As for the likes of Facebook, Amazon, Netflix and Google, Marchese believes that traditional TV must “create a Netflix-competitive experience, or ad-supported TV, if you will. As far as the other three FANG members, “Their advertising is different. It’s not a TV ad that’s running there for the most part. It’s performance advertising.
“But I think you’ll see the marketers reclassifying more and more dollars towards performance advertising. Because you know, who doesn’t want performance?”
This video is part the Beet.TV preview series ‘The Road to CES 2019.” The series is presented by dataxu. For more videos, please visit this page.
]]>Such was the case at the 2018 Cannes Lions International Festival of Creativity when Marchese was interviewed on stage by Dave Clark, GM of Comcast’s FreeWheel, as part of the FreeWheel Forum on the Future of Television.
Never one to mince words, Marchese described the complexity of trying to figure out just how many commercials a given consumer is willing to watch on a given platform and how sellers like Fox should price newly emerging ad formats.
What’s not complicated is the silent clock ticking in the background for an industry that is known to advance in capsulized increments, according to Marchese.
President of Advertising Revenue at Fox Networks Group, Marchese was blunt about “what sucks” about television. “TV and advertising have been for so long negotiating with each other and they didn’t have to worry about a third party in the negotiation. Building a business model for consumers first, that’s what’s different,” Marchese said.
“Why does anybody like you?” asked Clark.
“I’m not sure anyone does. I say what other people I think are thinking, I hope,” Marchese responded.
The ticking clock analogy refers to the two or three years he estimates might pass “before you start to see massive, tectonic shifts in how viewers behave.”
Clark: “Is there a simple way to think about the amount of advertising that consumers will accept?”
“It’s variable,” said Marchese. “The real problem is we haven’t even gotten to how complex it’s actually going to be.”
Since consumers are not “some giant, homogenous group of people” but individuals who value their time differently at different times, “I think we have to have a test and learn approach to what’s intrusive and what isn’t.”
That approach will reveal that there is content people are willing to endure ads to access “and there’s content people won’t sit through ads to get,” Marchese said. “Google’s already doing this in a lot of places. On YouTube, not everyone sees the same ad load. I think TV has to get a little bit smarter about when and where.”
Asked by Clark whether advertisers are willing to pay more for exclusivity in a commercial break, Marchese said “They have and they are” while noting that Fox’s two-ad JAZ pods “sold out early in the Upfront.”
Nonetheless, there’s no easy formula at this point for exactly how much to charge because marketers in certain categories might be willing to pay more, according to Marchese.
“The real problem is, saying what are they worth or how much more is so relative to who buys it. And so until these things are out there and the market can get set, we don’t know how much more yet.”
As a founder of engagement-ad pioneer true[X], a startup that Fox acquired for approximately $200 million, surely Marchese has some advice for TV networks, said Clark.
“Be prepared to work in chaos, things are going to change,” said Marchese before explaining that companies like Amazon, Apple and Netflix are in the video space “because they want to be the operating system for peoples’ lives, but people choose their operating system based on where the best stories are.”
Citing FX, Clark asked whether the highly awarded network holds lessons for other networks. Marchese said it was among the first to abandon the model of producing cheap programming in bulk to fill a 24-hour schedule. This helps to explain why when it comes to Emmy and Golden Globe awards, the most have gone to HBO, Netflix and FX, “and only one of those still sits on a cable-operated system, ad-supported,” Marchese said.
Asked by Clark whether he’s worried when he sees people like Shonda Rhimes leaving ABC and Ryan Murphy exiting Fox to join up with Netflix, Marchese said Ryan indicated that interruptive ads weren’t his main motivation.
“Shows had to be exactly 42 minutes and the episodes had to have exactly these arcs,” Marchese observed. “Then you add in the fact you’re scheduling to a clock that has ads in very particular breaks. When they add a new break, they actually have to add a new act to the show and that’s a lot of actual work and creativity.”
On a positive note, Marchese said that when Fox announced its JAZ pods, Seth McFarland said he wanted them for the entire season of The Orville. “That’s a creator being excited about a better ad system,” said Marchese.
This video is from a series of videos and sessions produced in partnership with FreeWheel at Cannes 2018 as part of the FreeWheel Forum on the Future of Television. You can find more videos from this series here.
]]>That doesn’t seem about to change anytime soon judging from a one-on-one interview with Marchese, who is President of Advertising Revenue at Fox Networks Group, and Dave Clark, GM of Comcast’s FreeWheel, at the 2018 Cannes Lions International Festival of Creativity. Part of the FreeWheel Forum on the Future of Television, the discussion did point to some amount of certainty.
For example, the futures market for national TV inventory known as the annual Upfronts isn’t going away anytime soon, for the simple reason that it protects buyers from price increases the way airlines hedge their bets with oil futures. The process is also something of a comfort to sellers, particularly those with the most coveted (and limited) ad avails.
The search for unification among TV sellers came about because of the digital age, according to Marchese.
“What we’ve never had to compete on before was what the currency metric was because we had Nielsen. People could complain all day about Nielsen, but at least it was consistent for everyone who was trading on it,” Marchese said.
Digital media introduced cost-per-view pricing, but when TV tries to create a new product, “everyone’s like, ‘cool, how does that fit in with what I paid you last year?’ There’s just no consistency.”
Fox has been pushing hard to establish new ad formats while reducing overall commercial load, “But if we do it alone, it won’t matter. You can’t create a market and you can’t understand what the market price of anything is if there’s only one person doing it,” said Marchese.
Given the difficulty in pricing new ad formats in something approaching a consistent manner, the lack of a common market will sow pricing disagreement. “Until then, opinions will differ. And then depending on the creative, one of us is right and one of us is wrong.”
Clark noted that the industry is will run by people who have been at it for two or three decades and asked Marchese what leadership traits and characteristics are most important.
“We need to understand that we’re just used to fighting over things because that’s just the way it was done. We’re used to negotiating with agencies over every penny because that’s just the way it was done.”
Now, in some ways, everyone’s on the same side of the table. “We have the same goal, that we would like to not kill long-form storytelling as an advertising vehicle,” Marchese said.
Responding to a question from the audience about the long-term viability of the TV Upfront, Marchese said he doesn’t think it will die. “I actually think we just get better at predicting where the inventory is going to be.”
Between now and then, he believes the “dumb definition” of a CPM—an impression is an impression—will yield to something akin to the real estate market.
“We analyze real estate not just for the square footage but for where it’s located, what are the amenities, who are the neighbors. There’s a bunch of things we do.”
This video is from a series of videos and sessions produced in partnership with FreeWheel at Cannes 2018 as part of the FreeWheel Forum on the Future of Television. You can find more videos from this series here.
]]>The video ad-tech firm has spent the last few years trying to popularize technology that helps consumers see fewer ads in digital video when they engage with an initial interactive commercial – often met by raised eyebrows.
Whilst allowing viewers to eliminate the majority of ads may seem like a recipe for lost revenue, finally, in 2018, broadcast networks are racing to reduce their ad load, ad length or commercial pod duration in response to growing consumer resistance to interruptive ad formats.
“The idea that a better viewer experience and a better advertiser environment are not in conflict,” says Marchese, who founded the company and later sold it to Fox, in this Beet Retreat fireside with Rob Norman.
Operators like Turner, Fox and NBCUniversal have been experimenting with reducing the size of their ads, as more viewers flock to ad-free subscription video on demand.
But, whilst fewer ads may delight viewers, won’t fewer ads mean fewer dollars for broadcasters?
Marchese says he is still “working on” developing the metrics that show advertisers who high-engagement ads in a low-load environment can drive better outcomes. But some things he knows instinctively.
“Just by having less ads on a night and less commercial messages, you can make the ads that you do have more effective to your audience because they’re not confusing as many commercial messages,” he says.
Marchese says plenty is still in flux and plenty yet to be worked out.
But there is something he knows for sure: “Engagement is just proof of attention. The only currency is attention.”
This fireside was anchored by Rob Norman.
This video was produced at the Beet Retreat in City & Town Hall on June 6, 2018 in New York City. The event and video series are presented by LiveRamp, TiVo, true[X] and 605. For more videos from the series, please visit this page.
]]>“I love what advertising affords and supports content and storytelling,” but the current “incarnation of the market” has just been between publishers and advertisers and forgetting the viewer, Marchese says.
“Joe as a person who sells advertising is bullish on it, as a content creator we want it, to support it. But as a viewer, the value isn’t there,” he adds in this interview with Beet.TV at Beet Retreat in the City: Television Advances as Consumers Choose, which took place at the Luce Auditorium at Meredith Corporation in Manhattan.
Marchese, who is President, Advertising Revenue at Fox Network Group, sees ROI on TV ad spending as a two-step process.
“The opportunity to get someone’s attention, that’s step one of an ROI process. Step two is what are showing them and what are you telling them,” he says in response to a question from interviewer Ashley J. Swartz, CEO of Furious Corp., which specializes in linear TV and video yield optimization.
It’s the responsibility of media companies to offer marketers “the best opportunity to talk to people, to have their attention,” Marchese says. “And so we build products that optimize for the best opportunity to talk to people.”
For the second part, “we have to be collaborative” or else the viewer loses out.
As the founder of engagement-advertising pioneer true[X], which he sold to 21st Century Fox, Marchese has a rather simple view of the world. “There’s twenty four hours in a day, people spend only so much time with media, people spend only so much time with ad-supported media, people spend only so much of that time with advertising actually paying attention to messages,” he explains. “Your greatest share of that possible, in whatever format, it could be out-of-home could be television, could be digital, your greatest share of people who you want to spend time with your message, that’s what you’re optimizing for as a marketer.”
He’s not fixated on marketing funnel parameters.
“I don’t care what part of the funnel you’re in. If you’re just learning about a product or you’re ready to buy a product, everything comes down to did you get someone’s attention.”
Asked by Swartz for a 36-month prognosis for the TV industry, Marchese narrows things down to two types of content: on-demand and live. The first will “require very different ad formats and systems” including frequency reduction and higher impact “because in the on-demand environment, people just learn that this is the way they should watch.”
Live programming “will hold advertising in a much better way but we need to be smarter about what we do with it.”
At the Cannes Lions International Festival of Creativity later this month, Marchese will participate in a leadership forum on the Future of Television presented by FreeWheel, in partnership with Beet.TV, at 10 a.m. on Tuesday June 19. Check back to this post for the agenda and registration.
This video is part of The Road to Cannes, a preview of topics to be addressed at Cannes Lions. The series is presented by the FreeWheel Council for Premium Video. For more videos from the series, please visit this page. FreeWheel is a Comcast company.
]]>The answer rests on delivery systems, according to Joe Marchese, President, Advertising Revenue, Fox Networks Group.
“The idea is, is a stream being delivered in a way in which you know who’s watching and, secondarily, is a stream being delivered in a way in which you can either change the ads or not change the ads?” Marchese said during a panel discussion by Comcast at the Cannes Lions Festival of Creativity. “Last portion is, is it being delivered on demand or live?”
Additionally, he suggested separating content from delivery vehicle. This yields a definition of TV as “long-form storytelling, sports, news and information.”
To panelist Eric Johnson, EVP, Global Advertising Revenue at ESPN, behavior is a key component. People watch on average 63 of live sports, whether on a TV set or mobile phone. “The behavior looks the same. If they’re watching SportsCenter they’re watching for 15 minutes on a television or a mobile phone.”
Beyond definitions, the only thing that marketers should care about is the likelihood that their message was delivered, according to Marchese. The problem is “pricing mechanisms and the currency we trade on. So we can innovate on the format all we want but if we don’t change the currency, if we don’t change what success is, none of it matters.”
ESPN is moving to a Nielsen Total Live Audience metric this year, Johnson said in response to a question by moderator Matt Spiegel of MediaLink.
“We’re seeing a 9 percent lift with young men in terms of streaming that’s not being counted by the current Nielsen measurement tool. I think it’s going to help immediately,” Johnson said.
Marchese would “love to have Nielsen measure 9 percent more audience” but wondered whether “I have to take the same ads that were in the linear TV environment and then put them into the place, that other 9 percent where I could do a digital ad where you could get a different ad from me? Is that the only way I’m going to get paid on that extra 9 percent?”
Johnson’s response: “We are passing through the commercials for the part that’s being measured by Nielsen and then we have another half that we’re dynamically ad serving, that we’re selling digitally, so to speak. So it’s a little bit of the best of both worlds.”
This video is from The New TV Ecosystem Leadership Forum at Cannes Lions 2017, presented by FreeWheel. For more from the series, please visit this page.
]]>It’s that “other” programming that concerns media sellers like ESPN and Fox, as evidenced by the discussion during a Comcast panel at the Cannes Lions Festival of Creativity. In fact, it keeps them up at night.
For ESPN, live is a North Star given its connection with fandom, according to Eric Johnson, EVP of Global Advertising Revenue.
“What has become live sport is expensive and at the same time we continue to just grow the way that consumption looks like,” said Johnson. “In live, real time. It’s complex, without a doubt. We try to make it as simple as possible for marketers.”
Fox Networks Group’s Joe Marchese is a big fan of live programming because it’s a choice of that or on-demand, where viewer attention isn’t a given. “Live doesn’t have that same problem. I will keep signing up for making money on live,” he said.
Asked by moderator Matt Spiegel of MediaLink what keeps them up at night, both Johnson and Fox cited the options available to consumers who don’t want to see ads. Then there is a “virtual tonnage of garbage impressions out there that try to keep the price down. That keeps me up,” said Marchese.
Johnson believes the industry has lost sight that “ultimately good marketing is good marketing. We’ve overcomplicated the industry a little bit to get away from that.”
What keeps Johnson awake is that amid the demand branded, native and other forms of interruptive content, “we’re not thinking about advertising in the same way.”
He explained that most clients could buy a full season of football and run one just commercial with lots of frequency, but that wouldn’t be the optimal way of doing things. They need to be shown that varying creative iterations is desirable.
“That’s part of the process of how do we get to a place where we’re now creating a lot of creative for our customers, because we know what works but we have to help them get to that space of what works,” Johnson said.
This video is from The New TV Ecosystem Leadership Forum at Cannes Lions 2017, presented by FreeWheel. For more from the series, please visit this page.
]]>In an interview with Beet.tv, Marchese traces the path to the current state of consumers and their tolerance—or lack thereof—of ads from a longstanding blind spot.
For too long, the TV industry “thought too little about what consumers want and just thought this was a negotiation that was happening between content owners and advertisers,” says Marchese, who is President of Advanced Advertising at Fox. “In reality, it was a three-party negotiation: content owners, advertisers and viewers.”
The last group have “fought back” as evidenced by the rise of ad blockers, DVR’s, Netflix, Hulu Ad-Free and other choices, according to Marchese.
He cites “the rash of virtual MVPD’s” like AT&T’s new streaming offerings and as he looks ahead to CES 2017, believes there’s no doubt that TV and video content will increasingly be delivered via IP.
“If that’s true and people are going to be logging in to watch television even on the big screen at home, what does that finally mean for advertisers?” Marchese posits. “How do we realize that?”
Among other things, he sees IP delivery fostering personalized ads and enabling advertisers to become “smarter about targeting and reduce ad loads because the ads get better and more relevant.”
To Marchese, creativity doesn’t always mean interactive ad design. “Sometimes it means designing different length commercials for different viewing experiences,” he says. “Sometimes it will mean designing sequential commercial messages.”
In an IP environment, “We know that a person has seen commercial one,” Marchese says. “Let’s show them commercial two now. That’s a whole new way to think about advertising than a simple reach and frequency.”
In any event, more consumer choices have put the market in a very different place. “Content owners and marketers are going to need to work together more than ever before,” says Marchese.
This interview is part of our series “The Road to CES,” a lead-up series in advance of CES 2017. The series is presented by FreeWheel. Please find more vidoes from the series here.
]]>That’s a world away from where we are today, says Fox Networks Group’s advanced advertising president. Because the truth is, consumers don’t really like ads at all.
“We have a market that’s out of kilter right now,” he says in this fascinating discussion with MediaLink SVP Matt Spiegel during Cannes Lions. “We have massive amounts of human attention, … but it doesn’t seem to be matching up correctly with what we know consumers are spending time doing.”
Marchese says ad blocking is “the best thing to happen to advertising in the last decade” because it is “the immune system putting antibodies for the virus of digital advertising”. In other words, billions of bad ads have so put consumers backs up, now the only solution is to act – not simply by making “better ads”, which Marchese calls a “self-delusion”, but by making ads match the media in which they run so that they align better with consumer expectations.
What could that look like? “Participation in advertising could make it more immersive,” Marchese advocates. “We could lower the number of ads a person needs to see if we could get them to participate with said advertisement.”
And Marchese argues “place-shifting” ads could, in a mobile world, let consumers transfer the commercial experiences they want to watch between devices, wherever they go.
This video was produced at the OMD Oasis at Cannes Lions 2016 as part of the Future of TV Advertising Leadership Forum, a series presented by true[X] and hosted by OMD Worldwide. Please visit this page for additional segments.
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