English Entertainment
TV industry targets heavy VOD buyers, TV valuable customer for commercials
NEW DELHI: Highly addressable advertising has been a long-standing plan for the TV business, which wants to rival the ad targeting available online, and the biggest beneficiary of addressable commercials so far may be the TV industry itself even as marketers want to make their spending more efficient.
Cable networks like Starz and HBO have begun trying DirecTV’s addressable advertising platform to find specific viewers who they believe would actually be interested in their shows. Cable and satellite operators, meanwhile, are taking advantage of the system to more efficiently target specific customers and get current subscribers to upgrade.
Such advertising could be most effective for the actual TV operators, said Visible World executive VP- marketing and research Claudio Marcus. Visible world provides targeting technology to Cablevision.
According to the National Association of Broadcasters of the United States, this is partly because paid TV services do not want to waste sign-up ads on people who already shell out for the product. Other kinds of marketers have a greater interest in marketing to current customers, so they’ll stick with the brand for their next box of crackers or new smartphone.
It can also be laborious to match specific households with the cars or packaged goods they buy but pay-TV operators like DirecTV know exactly which premium channels each of its households pays for.
“People are telling us they have enough TV,” said Media Storm co-founder and managing partner Craig Woerz. Media Storm’s clients including WeTV and NFL Network use DirecTV’s addressable advertising. “We need to make it more personalised and break through the clutter. We don’t want to break through with everyone, just the right people, who will be highly engaged.”
“Clients using addressable advertising are seeing a 20-40 per cent higher tune in rate than those not doing it,” informed Woerz.
Addressable commercials let you plan a TV campaign the way you would plan digital, said Starz exec VP-marketing Nancy McGee, which has run two campaigns using DirecTV’s addressable system. “Addressable makes sense in light of how people are consuming TV, cherry-picking programming and networks,” she said.
The premium cable channel tested a small campaign in March, urging viewers to add Starz, and followed up in June with a promotion for the premiere of the second season of “Magic City.”
In the initial test, which ran over five days, Starz showed ads to non-subscribers who frequently bought movies on demand or who subscribed to other premium channels, groups that the network believed had a higher propensity to be won over.
The network saw a 49 per cent higher jump in sales among viewers who saw the ads than in a control group, McGee said, adding that the system provides information on how many people were exposed to the campaign, how many watched it live and in playback, on which network they saw it and during which part of the day.
HBO, too, has used the DirecTV system for a campaign pegged to Game of Thrones, showing commercials to consumers who met criteria such as frequent VOD orders, on the same logic that Starz applied. It will run a similar effort later this year for the return of Boardwalk Empire.
HBO is still learning, according to HBO director, domestic network distribution Gina DeSantis. But the network intends to increase its investment in addressable ads next year, she said.
Scripps Networks is early in its exploration of addressable advertising, using it to send programming messages to viewers based on geographic location, said VP, national accounts, content and marketing group Brent Scott.
“There are so many shows and competitive networks, if you can pinpoint a specific customer you have a better chance of tune in,” he said. “Why advertise to DirecTV’s entire customer base of 20 million if 19 million of those have no interest. I’d rather reach a couple of hundred thousand that are interested.”
“In a lot of ways what we are doing here is no different than what Spotify is doing, what Amazon has been doing for years,” said DirecTV exec VP- chief revenue and marketing officer Paul Guyardo. “They see what you like to purchase, they see the songs you like to listen to, and they serve up songs they think you might be interested in. We are only putting the commercials in homes of people that want to know more about new cars or a premiere of a particular show because it is a show they like to watch.”
Auto, insurance and financial marketers have also been using the addressable technology, according to Guyardo, but the limits of the pay-TV systems’ reach have held back widespread adoption.
Some in the TV business also worry about the impact of easy, highly targeted TV commercials. “There’s a fear factor,” said Marcus. “The concern is if media buys become more efficient, does money come out of the marketplace because advertisers can do more with less?”
But the biggest challenge is educating the marketplace, with many media buyers and planners still thinking in traditional gross rating points, according to Guyardo.
DirecTV is trying to overcome that by pitching directly to CMOs, especially those who are data-driven. “If they value and appreciate data and analytics and they have a good understanding of exactly who they want to target, the beauty of this addressable product is it provides all of the reach that they want without the waste,” Guyardo said.
English Entertainment
Warner Bros. Discovery shareholders approve Paramount deal
Investors wave through a $111 billion megamerger but deliver a stinging, if toothless, rebuke over half-a-billion-dollar goodbye packages
NEW YORK: The shareholders said yes to the deal. They said no to the cheque. At a virtual special meeting on Thursday that lasted barely ten minutes, Warner Bros. Discovery investors voted overwhelmingly to approve Paramount Skydance’s $111 billion acquisition of the company — and then turned around and voted against the lavish exit pay packages lined up for chief executive David Zaslav and his fellow outgoing executives.
Not that it will make much difference. The compensation vote is purely advisory and non-binding. The Warner Bros. Discovery board can, and almost certainly will, pay out as planned.
But the symbolism stings. It is the second consecutive year that WBD shareholders have voted against the executive compensation packages, and this time they had good reason. Zaslav’s exit deal is, by any measure, extraordinary. Under the terms filed with the Securities and Exchange Commission, he is set to receive $34.2 million in cash severance, $517.2 million in equity in the combined company, and $44,195 in continued health coverage — a total of at least $550 million. On top of that, Warner Bros. Discovery has agreed to reimburse Zaslav up to $335 million for taxes assessed by the Internal Revenue Service on his accelerated stock vesting, though the company says that figure will decline depending on when the deal closes. As of March 11, Zaslav also held $115.85 million in vested WBD stock awards — and last month sold a further $114 million worth of WBD shares.
Shareholder advisory firm ISS recommended voting against the compensation measure, citing “problematic” tax reimbursements to Zaslav and the full vesting of his stock awards.
Zaslav will be bound by a two-year non-competition covenant and a two-year non-solicitation of customers and employees after the deal closes.
His lieutenants are not walking away empty-handed either. J.B. Perrette, chief executive and president of global streaming and games, is in line for $142 million, comprising $18.2 million in cash severance and $123.9 million in equity. Bruce Campbell, chief revenue and strategy officer, will receive an estimated $121.5 million, including $18.8 million in severance and $102.7 million in equity. Chief financial officer Gunnar Wiedenfels is set for $120 million, made up of $6.6 million in cash severance and $113.1 million in equity. Gerhard Zeiler, president of international, will get $82.6 million, including $11.9 million in severance and $70.7 million in equity.
The deal itself, clinched in February after Netflix declined to raise its bid for Warner Bros., still needs regulatory clearance from the Justice Department and European authorities. Several state attorneys general are also weighing legal action to block it.
Senator Elizabeth Warren, Democrat of Massachusetts, was unsparing. “The Paramount-Warner Bros. merger isn’t a done deal,” she said after the shareholder vote. “State attorneys general across the country are stepping up to stop this antitrust disaster. We need to keep up this fight.”
If it does go through, the combined entity would be a formidable beast, bringing together Paramount Skydance’s stable — CBS, CBS News, Paramount Pictures, Paramount+, BET, MTV and Nickelodeon — with WBD’s portfolio of HBO, Max, Warner Bros. film and TV studios, DC, CNN, TBS, TNT, HGTV and Discovery+. Paramount has said it expects $6 billion in cost savings from the merger, which is Wall Street shorthand for mass layoffs on a significant scale.
The ten-minute meeting was presided over by chairman Samuel Di Piazza Jr., with Zaslav, Campbell, Wiedenfels and chief communications officer Robert Gibbs in virtual attendance. Di Piazza was bullish. “We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio,” he said. “With Paramount, we look forward to creating an exceptional combined company that will expand consumer choice and benefit the global creative talent community.”
Zaslav echoed the sentiment. “Over the past four years, our teams have transformed Warner Bros. Discovery and returned the company to industry leadership,” he said. “Today’s stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders.”
Paramount Skydance struck a similar note. “Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros. Discovery,” it said in a statement, adding that it looked forward to “closing the transaction in the coming months.”
The shareholders have spoken on the merger. On the pay, they were ignored before the vote was even counted.
