Wolff: TV takes on 'subprime' digital video

There’s a new term in the media lexicon suddenly popular at the upfronts, the traditional television ad sales presentations now in full swing in New York: “subprime video.”

You can’t look it up because all you’ll get are videos about the subprime mortgage crisis. And that, of course, is part of the point, to suggest that there’s a real thing and then a market glutted with versions pretending to be as good as the real thing, but, on closer look, of much less value.

That is, no matter how mixed up it might increasingly seem, there’s television and there’s digital, firmly juxtaposed. And, as important, behind that distinction, there is suddenly, aroused as though from a stupor, a television industry making that argument.

This may not be a small media or cultural moment. The last media generation has been characterized by the forceful and gifted selling of the advantages of digital innovation to user and advertiser and a receding self-confidence on the part of traditional media. In digital, as almost anyone, save a few hoary stalwarts, will tell you, you have the future; everything else is the past.

Indeed, before this was seriously questioned, newspapers and magazines, were, in the space of half a decade, pitilessly defenestrated. Such a tipping point — a loss of credibility, competitive gusto, coolness and, soon, dominance — seemed to reach the television industry last summer in a stunning share price drop that was then compounded by another in the fall. Cord cutting seemed rampant, Millennials on the run, and advertisers shifting from a dumb box to smart digital. Or at least that was the digital salesmen’s story.

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It is hard to know what exactly roused the beast here, other than that little of this was true, and that the digital industry, amidst ever falling ad rates for traditional banner advertising, had accelerated its transformation to video. But this year’s upfronts have gone from, in recent years, a kind of tacit or resigned "we’ll take your dough until you stop giving it to us" to this year forcefully making the case that digital video, when compared to television, is quite a wretched substitute.

Television’s hey-wait-a-minute moment may have started last fall with Yahoo’s first stream of an NFL game, a pointed incursion onto television’s turf. Yahoo reported 33.6 million streamers, which it equated to viewers of the Buffalo Bills vs. Jacksonville Jaguars game. But, in fact. stop-and-start streamers represented less than half that number of actual viewers, and the video was auto-played when you went to the Yahoo homepage — you couldn’t not watch it. And even so, if you added up total minutes watched, by anyone, it would have equated to as little as 20% of a television audience for a similar game. The issue, in other words, was not just the size of the audience but the integrity of the numbers. It was digital dissembling on a constantly growing scale.

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Toby Byrne, Fox Network Group president of ad sales, told a similar story at the upfronts last week when he compared a Fox World Series broadcast that had 14 million viewers with a YouTube video with 14 million views. Calculated by TV’s audience metric, said Byrne, this would actually be an audience of 1,620 people. Conversely, if Fox used digital calculations, its World Series broadcast would have an audience of 6.8 billion, nearing the world’s total population.

The fundamental argument to advertisers about digital media has been about measurement. Where in television the advertiser could only buy a show with its specific audience, described mostly just by gender and age, in digital you could buy the person. In some sense, given traditional media’s own long history of fudging numbers, there has been a reluctance to challenge digital media on its measurement claims. But, unchallenged, digital has largely raced to the preposterous, with phony clicks making up as much or more than a third of all traffic and with a significant amount of all ads loading after the user has left the page. In other words, this is accounting worthy of subprime mortgages. Television, whatever measurement sins it might have committed in the past, seemed suddenly honest and transparent — and touting its virtue.

Viacom, under attack for its lackluster programming, curiously made data one of the stars of its upfront presentation. In a real sense, its new data czar, Kern Schireson, executive vice president of data strategy and consumer intelligence, has become one of the network’s stars: better measurement is the new glitz. In effect, Schireson is proposing to take the finely targeted measurement promises of digital in a world of fly-by content, and put them in the world of high-engagement television.

Viacom announced last week a partnership with American Express. In this, Amex’s closed loop data, capturing both the buyer’s and the seller's information — as detailed as any consumer tracking system — will be matched with Viacom viewers. This not only begins to offer a vastly more sophisticated audience portrait — and audience menu — than Nielsen has ever been able to but offers advertisers the comfort of AAA television, rather than the risks of subprime digital video.

For advertisers, the only choice has seemed to be between the fading past (traditional media) and the inevitable future (digital). But now, as video, rather than tech, becomes once again the marketer’s lingua franca, it is, finally, a matchup of product vs. product. In this, it could be the moment to start shorting the subprime video market.