Last month, Peter Naylor, the media executive whose storied career in ad sales includes leadership stints at Netflix, Snap and Hulu, joined the board of Kochava, a data solutions tech business based in the US. The move finds Naylor following what he considers the biggest trend currently shaping media: “Outcomes, outcomes, outcomes.” The increasing pressure on marketers to prove that their investments are yielding results spans from TV to mobile and beyond, and Kochava sits across channels to help make sense of what is and isn’t working.
The company was founded in 2011 with a focus on mobile measurement, but as marketers look to flex their investments across omnichannel campaigns, the company has shifted towards media mix modelling, enabling advertisers to measure outcomes across channels. “They have capitalised on the biggest trend in all of media: the move towards real-time measurement, outcomes and performance,” Naylor tells VideoWeek.
Cost-per-whatever
There are several factors driving that shift towards omnichannel activations, including economic uncertainty, the unknown impact of AI, and regulatory action against the Big Tech companies that operate walled gardens. Marketers are therefore looking to spread their investments, making cross-channel measurement more important – and yet less accessible – than ever. “In a world where measurement is everything, it’s strange that measurement is increasingly challenged,” comments Naylor.
Between Apple’s IDFA (Identifier for Advertisers) restrictions and Google’s will-they-won’t-they on cookies, marketers sought alternative solutions to measure their investments across channels. And according to Naylor, Kochava enables them to measure on a “cost-per-whatever” (CPW) basis; that is, measure whatever their KPI might be. “United Airlines is going to measure something different than the NFL,” he says, “but Kochava takes all of their signals, puts it into their dashboard, and quickly make sense of what’s performing against that CPW.”
Kochava also serves the sell-side, allowing publishers such as Spotify or NBCUniversal to present independently measured products to advertisers without having to “mark their own homework.”
Tying those channels together also spells opportunity for the open web, according to Naylor, even in the face of forecasts that put half of all global ad spend in the hands of Amazon, Google and Meta by 2028. “I’ve been doing this for a long time, and I remember when the big three were AOL, MSN and Yahoo,” recalls Naylor. “And we asked ourselves, how in the world are we going to ever shake those three from their immovable foundations? And look where that’s gone! Now the big guys are Amazon, Alphabet and Meta, and while they’re not going anywhere anytime soon, the rise of AI definitely challenges them.”
Betting on Upfronts
And it’s not just mobile, search and social budgets affected by this shift towards outcomes-oriented advertising; the TV market is also evolving, raising questions around the future of the Upfronts in an increasingly short-termist ad market. Naylor argues that there will always be a need to secure advanced deals with preferred partners, particularly when there is a risk of budget scarcity, although the evolution of technology and AI is changing how those deals are done.
The scatter market on the other hand, whereby unsold inventory can be bought closer to the air date, is more prone to disruption, thanks to the growth of programmatic TV trading in the US. “Just-in-time buying has really moved to a programmatic playground,” says Naylor. “It doesn’t mean the Upfronts will go away, it just means that part that’s left over from the Upfront has found a new way for that money to transact between buyer and seller.”
Live sports for example represent a continued case for Upfront deals, given the prevalance of long-term sponsorship deals and the spontaneity of ad breaks in live content. But Naylor does see the ad break evolving to a hybrid of one-to-many ads and personalised, addressable ads. “It’s really hard to do that at scale, instantaneously,” he notes, “but I think the future of sports commercialisation will be a mix of showing everybody the same ad at the start of the break, in addition to dynamic ad insertion.”
Netflix for instance, where Naylor spent two years leading the ad sales business, has moved into live events with its WWE rights, showing one-to-many ads on the live stream, and addressable ads when the stream is available on-demand – “until they work out that place where they mix it up in the future.”
An interactive future
Almost one year on from his departure from Netflix, Naylor notes the “pretty rapid build” it took to get the streaming service’s ad-supported tier off the ground back in November 2022. He argues that Netflix had “late mover advantage” in launching its ads plan, allowing the streaming giant to learn from the introduction of ads on other streaming services, such as Hulu and HBO Max, particularly when it comes to pricing.
“They’ve been very savvy at their pricing structure when it comes to attracting an audience,” says Naylor. “The ad-supported tier is marked considerably lower than the ad-free tier, so anytime someone goes through that purchase funnel, it’s a very considered economic choice. You can take ads for $7 or $8, or take it without ads for considerably more. So that choice is up to the viewer.”
Since launch the streaming service has expanded its advertising capabilities, and at its Upfronts last month, unveiled new interactive formats that include added overlays, calls to action and second-screen functionality. And while consumer research has suggested there are still barriers to user adoption of interactive ads on TV, Naylor suggests these formats represent the next step in the move towards outcomes-based advertising on TV.
“I remember the first time I experienced a touchscreen decades ago at CES, I was so dazzled by it,” he recalls. “Now if I come across a screen that isn’t a touchscreen, I think, why isn’t this a touchscreen? So I think it’s probably the same experience for consumers. Once they interact with a TV spot and have a good experience, somewhere in the short- to long-term, consumers will just expect to be able to interact with every ad. We’re not there yet, but I imagine that’s somewhere in the future.”
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