There is a mild but active scandal in progress that television media buyers and the TV advertising industry at large have no idea is taking place. Television is wasting ad impressions for Tier II media buyers focused on driving traffic to specific, local businesses and no one is talking about it.
The Breakdown: Tier I and Tier II
Tier I television media buys typically focus on raising awareness. A classic example is McDonald’s running national campaigns to drive awareness and consideration of their latest pop-culturally inspired burger combo, the Cardi B and Offset Meal. No one really needs to be told where to go to grab a Big Mac. Just like the restroom in our house, we tend to know where the nearest McDonald’s is, so brand-level advertising is effective, raising the boats of any franchisee within the geographic reach of the TV ad buy.
Then there are Tier II advertisers; they are businesses serving a specific locale that buy TV advertising with two primary goals. First, to raise awareness of their product or service, and second, to make people aware of how to contact them for purchase or inquiries. These ads aren’t just focused on raising awareness, but also require potential customers to understand where, when, and how to purchase or engage their service.
Designated Marketing Areas (DMAs) and Why They Matter
Historically, television is purchased and measured by designated market areas or DMAs. DMAs tend to be very large. They’re so large that, as of now, there are only 210 representing the geographic coverage of the entire U.S. The largest DMA, New York Tri-State, actually includes New York, New Jersey, Connecticut and Pennsylvania, a rather counterintuitive grouping, to say the least.
When Tier I’s buy ad space for a general brand lift across DMAs, it usually makes pretty good sense. Nearly everyone eats at McDonald’s from time to time, so it’s logical to spread a media buy across the DMAs that have been targeted. In the case of the Cardi B and Offset Meal, you can then gauge the relative rise in purchase activity of the meal to understand the high-level impact of the campaign.
But this same approach doesn’t work if you’re a Tier II advertiser. Tier II media buyers tend to have several things in common. They are smaller, with comparatively limited budgets and a focus on driving engagement to specific outposts of the business. Let’s use “Bill the Plumber” as an example.
Bill the Plumber of Newark, New Jersey, has set aside a budget of $200,000 to advertise its services across its service areas in Newark. But Bill the Plumber’s media buyer is buying DMA-level impressions, meaning Bill’s advertising will actually be spread across the entire Tri-State region. The problem is obvious. Bill only services zip codes in and around Newark.
Bill the Plumber isn’t interested in advertising in Brooklyn. But because of legacy media buying conventions, the company is forced to buy impressions in areas they don’t service. Bill himself would be incredulous to learn that a large percentage of his company’s ad buy is, quite literally, going to waste.
The Solution: Zip Code Analysis
Technology now exists to understand the frequency and location of ad creative at the zip code level. Whether broadcast, cable or streaming, advertisers can gain insight into where their ads ran, how many times it ran and in the specific zip codes. Measuring ad creative instances at the zip code level accomplishes a number of tasks.
First, it provides a more granular understanding of impression data. Legacy measurement systems like Nielsen only count the number of ads that run inside of a DMA, which then corresponds to the total number of impressions delivered by a campaign flight. But when you measure via zip code, impression data increases by several multiples by counting each instance an ad ran, in each zip code where it appears. This means that DMA-level data is (1) incomplete and (2) not representative of the full value of the media spend.
Second, zip code level analysis can also double as a competitive intelligence tool, telling you where your competition is spending and at what levels. If Bill the Plumber’s biggest competitor is Newark’s Rosey the Riveter, Bill can also track ad instances for Rosie’s ad creative and make adjustments to their own media buys based on that intelligence.
DMA media buying is fine for big brands, with big budgets who can afford to “spray and pray.” But agencies and practitioners serving relatively smaller operations are wasting big bucks if they follow the same playbook as the McDonalds’ of the world. Those five-digit combinations alone can take your budget and the business you’re servicing a long way.
[Editor’s note: This is a contributed article from AdImpact. Streaming Media accepts vendor bylines based solely on their value to our readers.]
Contextual Targeting: TV Advertising’s Next-Level Move
Modern TV advertising is in a growth phase. Advertisers face new challenges as the landscape shifts from broadcast and cable to a new world of AVOD and FAST. Asrah Mohammed of Waymark discusses contextual targeting, a strategy that could help navigate this new landscape.
06 Mar 2023
The New CTV Challenges of Advertising Metrics
The first article in a series sponsored by Progress Partners and its Executive-in-Residence program addressing the big questions the streaming industry is grappling with regarding advertising metrics.
28 Feb 2023
Why Broadcasters Need a Swiss Army Knife to Fix Video Advertising
Greg Morrow of Bitcentral looks at how publishers now need a “swiss army knife” of tools to realize their advertising potential. With content spread across so many distribution points and in different forms, publishers now need to integrate a separate toolset for each one to thrive in today’s market.
09 Dec 2022
As CTV Advertising Evolves, Here’s What It Can Learn from the $200B Paid Search Model
As the global marketplace becomes even more reliant on digital advertising, how can digital advertisers reach audiences that have become increasingly tech-savvy over the past few years?
26 Oct 2022