Data-mining key to integrating advertising, TV and interactive content: Bell Fund report

Broadcasters must integrate consumer demand for interactive products into their high-level business plans to capitalize on new technological possibilities for data-mining and business intelligence, suggests a new report prepared for the Bell Broadcast and New Media Fund. The study, Fiscal Reality Television, looks at the business practices of several leading North American companies in the new media production chain and concludes that without a high-level strategy to marry advertising, broadcasting, and interactive content with the potential to analyze consumer bases, broadcasters are likely losing an important opportunity to capitalize on their various assets. Catherine Warren, author of Fiscal Reality Television, says that while many broadcasters have adopted interactive content as a corollary to their television properties, many haven’t used them to full advantage. "There needs to be an attitudinal shift about what it is that they’re doing," argues Warren. "There needs to be a true appreciation for the asset base that new media represents. What I discovered in the report is that it represents two things. It represents a tremendous potential for business intelligence. And, secondly, it represents a direct link to their most committed viewers, their fans," she tells Canadian NEW MEDIA. While she notes that the two broadcasters featured in the report – CHUM Ltd. and WGBH – are companies that are successfully implementing integrated strategies, many companies aren’t. "Other broadcasters still see viewers in terms of audience. They don’t see them in terms of fans. They don’t see their interactive audience in the way they could be to capitalize on that. The fan side is a very important piece of the puzzle. The other important piece of the puzzle is what I call strip-mining the hell out of things. There needs to be a real commitment to embedding the information, the data that can be gathered, embedding that at the top in terms of putting that into their sales pitches, putting that into their media plans, including that as an asset instead of a cost." The report notes that the value of traditional advertising models is coming into question, especially by large advertising agencies that are beginning to expect more feedback for their dollar. The study reads: "Television advertisers are also increasingly questioning the value of their media buys. The Web has increased expectations for true audience statistics vs. ratings. Blue-chip advertisers now have a direct pipeline to their customers via the Web and SMS. And while TV is still the premier place to buy an ad, agencies are predicting this will change in the near future. "Is television losing its clout? More people now visit a Web site that they learned about from a magazine than from television. One interpretation is that television’s influence is dwindling as a ‘call to action.’ This could cause on-air advertising erosion down the road." In her findings, Warren says that other players such as in the health and finance sectors have led the way in using data-mining to track the effectiveness of interactive content and says she’s surprised that broadcasters have lagged behind. "One of the reasons that advertisers have become very good at going to consumers directly is because the broadcasters weren’t providing them with valuable data that they needed. I make the point in the report and that is that if you look at the history of broadcasting there’s no better model for e-business. They have an electronic product. It’s not like Amazon where you have to get books and ship them. It’s very direct. Yet there are many other businesses who have nothing to do with a pure e-business model with their original product who have become really good at capitalizing on e-business intelligence, e-business structure, e-business strategy. I’m really saying to the broadcasters, ‘hey, why not you? There’s no purer model. There’s no more transparent opportunity than the one you have. Take it and use it – this is a small shift with a big potential upside.’" Warren writes in the report that business intelligence tools can be expensive but notes that some companies, such as CHUM, have begun to integrate analytical tools into their systems, formalizing the process of overlaying TV times, trends and ratings with interactive data. Those not doing so, however, risk losing audience and advertising dollars, as well as risking the loss of a return on their dollars. "Broadcasters have made an investment in new media," Warren says. "They’re continuing to do it. We’re no longer in an environment where they’re asking if this Internet thing is here for the long haul. There’s absolutely no question that, at the same time, the audiences have proven that they have an insatiable appetite for information that comes via the Internet and entertainment content as well. So to not go that extra mile to extract value out of this means that your asset is going to languish. " The report further echoes recommendations from an earlier Bell Fund report released last summer, BEYOND RATINGS – New Metrics for New Media. Also written by Warren, the report called for a greater emphasis on marketing in determining the level of interactivity broadcasters should build into their web properties (CNM, July 24/03). While that report was well-received by players in the new media industry, Warren says one of her goals is not to preach to the converted. "I think many people who work in new media understand this all too well. The people who really will benefit from this intelligence are the chief executives at the broadcast level, the big ad agencies who can really influence and extract better information out of broadcasters – kind of push the broadcasters a little bit to take them in this direction." Warren invites comments and questions directly by emailing cath@fantrust.com.

Data-mining key to integrating advertising, TV and interactive content: Bell Fund report

News | 02/20/2004 5:00 am EST

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