TV viewers are more valuable today!
Let’s start with a perspective. 10-years ago you would have denied that your house would near double in value and if you listed it you’d have 15 offers and sell it for $30,000 over list price - IN ONE DAY.
20-years ago we would have said FaceBook is worthless - it doesn’t sell anything.
But those conclusions use old mindsets and evaluation metrics that have been disrupted by new data collection “systems” and economic forces (population growth multiplied by how much more of our monthly budget we spend on entertainment than 20-years ago).
The economics (revenue generating potential and value of each viewer) have changed. 15 years ago a dinosaur called Nielsen ratings could only tell you how many people were watching said TV program - using a formula similar to what pollsters use to predict elections.
Today, your provider (streaming service, network, cable company, internet provider, and 3rd party market research entities) know who the hell you are and know your spending habits. Some 3rd party data aggregators purchase credit card data, smartphone app data and have aggregated this data and developed a profile on you - so accurate you would be horrified.
Thus, each viewer has 20-times sometimes 200-times the value of an old Nielsen rating. In the old model running a beer commercial during a college football game offered low risk high ROI in terms of Budweiser advertising dollars. However, we are on the dawn of this improved “profiling of you as a consumer” allowing niche companies to purchase only the customers who have a high-likelihood of buying their product - exactly as the ads on FaceBook.
This is why viewership decline (like in the NFL) doesn’t mean beans.
To encapsulate: Media marketing and customer data have entered a new era. There is a new value paradigm for loyal viewers. As Aslon says “wake up” - ESPN is merging google-level and Facebook-level individualized consumer profile data about you and they are soon to be able to target you with commercials different than your next door neighbor.
$100/million to escape the GOR may soon be peanuts to the first steaming service to either partner with FaceBook or leverage similar 3rd party demographic data about you and broadcast live sports - delivering targeted TV commercials.
Instead of one beer company paying $5/million for a 30-second commercial, networks will be able to sell 500 commercials broadcast at the same time -, with none overlapping and each of the 500 going to it’s most accurate target - Now each each commercial costs $100,000 - much more affordable. But 500x$100,0000 now equals $50 million and the commercials deliver better response/better ROI because it’s targeted to a buyer profiled to be more likely to purchase said product/service.
Let’s start with a perspective. 10-years ago you would have denied that your house would near double in value and if you listed it you’d have 15 offers and sell it for $30,000 over list price - IN ONE DAY.
20-years ago we would have said FaceBook is worthless - it doesn’t sell anything.
But those conclusions use old mindsets and evaluation metrics that have been disrupted by new data collection “systems” and economic forces (population growth multiplied by how much more of our monthly budget we spend on entertainment than 20-years ago).
The economics (revenue generating potential and value of each viewer) have changed. 15 years ago a dinosaur called Nielsen ratings could only tell you how many people were watching said TV program - using a formula similar to what pollsters use to predict elections.
Today, your provider (streaming service, network, cable company, internet provider, and 3rd party market research entities) know who the hell you are and know your spending habits. Some 3rd party data aggregators purchase credit card data, smartphone app data and have aggregated this data and developed a profile on you - so accurate you would be horrified.
Thus, each viewer has 20-times sometimes 200-times the value of an old Nielsen rating. In the old model running a beer commercial during a college football game offered low risk high ROI in terms of Budweiser advertising dollars. However, we are on the dawn of this improved “profiling of you as a consumer” allowing niche companies to purchase only the customers who have a high-likelihood of buying their product - exactly as the ads on FaceBook.
This is why viewership decline (like in the NFL) doesn’t mean beans.
To encapsulate: Media marketing and customer data have entered a new era. There is a new value paradigm for loyal viewers. As Aslon says “wake up” - ESPN is merging google-level and Facebook-level individualized consumer profile data about you and they are soon to be able to target you with commercials different than your next door neighbor.
$100/million to escape the GOR may soon be peanuts to the first steaming service to either partner with FaceBook or leverage similar 3rd party demographic data about you and broadcast live sports - delivering targeted TV commercials.
Instead of one beer company paying $5/million for a 30-second commercial, networks will be able to sell 500 commercials broadcast at the same time -, with none overlapping and each of the 500 going to it’s most accurate target - Now each each commercial costs $100,000 - much more affordable. But 500x$100,0000 now equals $50 million and the commercials deliver better response/better ROI because it’s targeted to a buyer profiled to be more likely to purchase said product/service.
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