A New Era of Addressable Audiences

IBM ConfidentialIBM MD&I | 2019 | © IBM Corporation
Industry Insights 2019: Media and Entertainment
1
A New Era of Addressable
Platforms
What’s coming and how to prepare…
IBM Telco, Media & Entertainment

A New Era of addressable audiences
Spending on Addressable TV Ads to Hit
$3.3B by 2020 The addressable TV audience in the U.S. is 162.2 million
people.
40% of TV Ad Spending to Be
Data-Driven By 2020 Spending on data-driven advertising is growing at a 42% three-
year compound annual growth rate.
March 26, 2019 - Broadcasting & Cable; VAB “Address for Success”, 2019 Marketer’s Guide

Does addressable work?
200%
surge
in unaided
TV ad
awareness
87%
lift
in aided ad awareness
66%
lift
in sales rate; 19% lift
in buying rate
100%
gain
in total orders by sales
channel
Source: Xandr, Campaign Flight: Q1 2018. Case study results are based on individual campaign factors. Xandr 2018; Viewership data based on DIRECTV Universe; National Ad Schedule: Comscore Advertising Occurrence Data © 2019 KANTAR Media / Intelligence. Addressable Target from Data Vendor IXI. Verizon Media, HHA Case Studies, December
2018; Campaign Flight: 2Q’18 – 3Q’18, Reporting based on 4+ Frequency.
“Address For Success How Addressable TV Delivers Full-Funnel Outcomes”
Video Advertising Bureau – A Marketer’s Guide – 2019

However, challenges exist in maximizing these benefits
Only 20% of those surveyed said they could “easily develop a 360-
degree view” of their audience.
The survey found that 54% of advertisers were concerned about
competitive leaks when sharing information with media partners.
44% of organizations don’t sufficiently measure and attribute the effect of
campaigns on sales or profitability1; and 51% say they are only able to
measure ROI of customer experience to a moderate extent2
Complexity of using third-party data providers cited by 38% of
advertisers as one of the top three reasons they didn’t use data to
build audience segments for TV.
360° Views
Trust
Measurement
Data Mgt

These market forces are creating the next catalyst for change and
raising expectations for greater value from Broadcast and MVPDs …
Automation Data AIAI Automation Data
Business Platform
People, Process, Data, Applications
Changing consumer
expectations
Pervasive
interconnectivity
Audiences and Advertisers
are demanding
Digital Transformation …
… as enterprises are
undergoing cognitive
transformation

… Driving the need for the TME industry to adopt Cognitive
capabilities and organizational ‘connectivity - and sustain competitive
advantage
I BM Client: Current State
Siloed Organization / Siloed Data
Organizational I mplications:
Usage
TV News O&O
User A User B User C
Access A Access B Access C
Access/
Control
Data
Vision: Future State
Hybrid Cloud Cognitive Enterprise (“Data Fabric”)
Organizational I mplications:
I nfrastructure
Data
Technologies
Workflows
Differentiated
Platforms
Content Platform
Front Office
Middle Office Back Office
HR Platform
Billing Platform
Transaction Platform
Customer Data
Content Data
HR Data
Financial Data
I ntelligence Security & Trust Automation Connectivity
Public Private

Leading in this new Addressable consumer market will require new
Enterprise Platforms to leverage proprietary capabilities in data,
unique processes and specialist expertise
✓
– Strategic clarity
– Ecosystem
expansion
potential
– Accelerative
approaches
Deep expertise
✓ Differentiated
workflow
✓ Exponential technology
applications
✓ Unique proprietary
data and data
combinations
✓ Channel power and
network credibility
✓ Scale
Pools of
expertise
Customers
Outcomes
Internal External
Data
Pools of
expertise
Customers
Outcomes
Internal External
Data

Case Study: Applying AI to Forecast Ad Campaign Business Outcomes
Linear Dimensions
Digital Dimensions
Build model architecture Collect and prepare data for key dimensions Build measurement model to test importance Simulate and quantify impact
GPM framework to measure engagement
RNN Framework
Stacked LSTM/GRU memory
Prime
Spot A
0
2xcontribution to search
Impressions
Granular dimensions to
evaluate
160
+
RNN / LSTM approach will inherently capture ad memory
impact on sales
Model architectures were built to scale across brands
+
Updated granular business dimensions
+
Model were built for 5 metrics across 26 advertisers Contributions were simulated by adjusting
impressions for each dimension
Stacked LSTM/GRU memory
+
Major TV network uses AI/ML/DL to quantify the Return on Ad Sales Investment (ROASI) and derive
outcomes-based attribution to help advertisers measure their ad spend

Case Study: Applying AI to Forecast Ad Campaign Business Outcomes (cont’d)
AI-powered Ad ROI: Deep Learning models were developed – in 9 weeks - to measure and demonstrate
outcomes-based ad effectiveness across 160 key dimensions
Business Challenge:
Solution Delivered in 9 Weeks:
IBM built an outcomes-based algorithm to model ad dynamics and measure
contribution. The AI/ML/DL solution measures the advertising effectiveness
across linear TV and digital channels as defined by the return an advertising
customer receives on its investment to market its brands.
Key dimensions included network, daypart, show, pod, position and length
against funnel KPIs such awareness, product interest, intent to purchase. IBM
Weather foot fall in dealerships was tested as a proxy for point of sales activity.
The FOAK quantification of ad effectiveness delivered unprecedented value and
impact to the network and its advertisers.
32M+
Potential combinations without programs, digital and
competition
Sample Outcomes:
21K insights across 160linear TV and digital media
dimensions
2.03X
Average ROASI on linear TV properties
3.4%
Overall media contribution
to sales
3.2 cars sold
per MM
TV impressions
IBM Assets:
•GBS – Cognitive Business Decision Services
•Watson Studio
•Weather Company Location Data
IBM has the platform with end to end capabilities to create data-driven media plans that maximize advertiser’s return on
ad spend. IBM’s cognitive building blocks, AI, data, tools, people and cloud infrastructure support network innovation
today and into
the future.
The client was looking to utilize their amplitude of data analytics on point of sales, ad awareness, consideration, purchase
intent and brand engagement to optimize ad spending to measure ad delivery impact of NBCU’s platforms. Adding to the
challenges was that data was siloed in various business units and systems, and like much of the data, the processes for
building new models and insights were redundant, expensive, time intensive. There was also a skills deficit where data
scientists and product managers were required to scale model generation and efficacy.

Advertising Case Study Snapshots
Cognitive Weather Targeting
Understand brand specific weather conditions that
drive consumer action
Continuously learning & optimizing based on
market forces and brands consumer habits
Minimizes campaign waste resulting in a lower cost
of customer acquisition
Store locations
Trigger coverage area
Visibility - Vehicle Campaign
Exposure
Monetized 3M square feet of space on their trailers
Engaged CPG partners to invest in ads on trailers by
quantifying with Watson Advertising, The Weather
Company location, and Metro Pulse data.
Identified additional $10M in ad revenue, hyper-local
insight into demographics, and an approach to optimizing
route
Attribution-Revenue
Prediction for Brands
80 Billion+ Data Points
Over 100B+ location pings used for analysis.
Average 300M+ pings per day, over an average 16M+
devices for PoC
35K+ Ticker POI locations

Cutting across the Cognitive Enterprise’s multiple business platforms are
common capability layers, each subject to its own major transformation
Establishing a New Business Platform
Data
Internal External
Content
Audience
Operational
Ratings
Audience
Process
Cognitive workflows
Customer
Experience
Content Back Office
People
Embedded professionals
Marketing
Content
Creators Ad Sales CRM
Connect to Internal and External data sources
as a new core competency of your enterprise
across multiple cloud environments.
Establish AI powered processes to understand
the Customer Experience at new levels
enabled by ATSC3.0 and 5G.
Transform your enterprise with the
professionals needed to compete on this
new playing field.
Transforming the
customer experience
through “outside-in”
digital reinvention
Unleashing the full
potential of AI-enabled
workflows
Co-creating business
platforms with IBM
industry and technology
know-how
The Strategic Imperatives

Getting Started: Start Small, Be Agile and
Measure Results: Create an Environment
that Takes the Cost out of Failure
Bring together
the right
people from
IBM, our
clients, and
ecosystem
A platform for
data &
technology
With
enterprise
scale ways
of working
Structured
network of
global and
local
capabilities)
Program 4
MVP 5
Program 2
MVP 2
MVP 4
CoE 1
BUSINESS PLATFORMS BUILT OVERTIME: BRICK BY BRICK
DATA FIRST, CUSTOMER LED, GOVERNANCE & TRANSPARENCY
POC 1

A New Era of Addressable Audiences

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