Corus plans TV ad tech test next month

Corus Entertainment Inc. is “accelerating” its transformation into a more data-centric company, its CEO said Thursday, as the broadcaster looks to begin testing a new platform next month that he says will give advertisers a better way to target ads on traditional television. “This platform provides an easy-to-use interface for advertisers, comparable to what they use to buy digital ads, and offers an opportunity for even more buyers to use audience-based buying,” Doug Murphy said on a conference call following the company’s second quarter earnings report Thursday morning. The move to programmatic ads on linear television is a pilgrimage two years in the making for a company that already utilizes it in its digital business. It first announced its original intentions for the tech in 2016 and during last quarter’s conference call, Murphy said the product would launch this year. Dervla Kelly, spokeswoman for Corus, said in a follow-up email that the platform, which uses privacy-compliant aggregated data, will “algorithmically select inventory that leverages multiple data sources to connect advertisers with relevant and desired audiences.” She added it “closes a number of gaps in the TV landscape that haven’t been addressed by any existing product.” The platform is yet to have a name, but Kelly confirmed a “branding exercise” is about to get started. To highlight the urgency, Murphy said on the call that over 10 per cent of TV advertising revenue is now derived from targeted audience-based buying and that “continues to steadily increase.” He added the ad-buying experience will be similar to digital, but within the “trusted and safe” TV environment “with a proven ability to build brands over the long term.” “We believe there is incredible value for advertisers with this advanced new product for the television industry in Canada,” Murphy added. “This is not an overnight solution, but it’s an important part of our longer-term objective to maximize the profitability of our domestic media business.” Murphy gave examples of a specific set of people like food lovers and parents whose kids have moved on — “empty nesters” — as groups for ad targeting. “We’re seeing steady growth in those investments in advertising campaigns,” he said. The idea of using data-specific means to attract advertisers has been discussed for a long time, at least for the web. It was recommended for that medium in a 2003 research report conducted by a Bell Fund board member, Catherine Warren. She found advertising agencies would profit from working with TV sales teams to “build a powerful case for website data-capture, demographics and psychographics.” Psychographics is data informed by insights including people’s habits, interests and values. It has also been at the centre of Facebook Inc.’s recent data privacy woes, whose trove was exploited inappropriately by others to influence political outcomes around the world. BCE Inc. head George Cope has previously said the company needed to do more in the ad tech space and has played with programmatic ads on out-of-home media such as billboards. In addition, RBC Capital Markets analyst Drew McReynolds said in a Thursday note that the adoption of ad tech could begin to pick up pace with Comcast Corp.’s X1 platform being deployed by industry players. But Corus’ platform test isn’t the only such project that will attract attention from advertisers, as Numeris is working on a CRTC-mandated set-top box measurement system. Murphy said that platform will allow advertisers to gather their own data. In the meantime, for the three months that ended Feb. 28, advertising revenues slid three per cent in the quarter to $221.7 million, from $225.9 million over the same period last year — about in line with last quarter’s results. The decline was partly due to advertisers being lured away from its slate of family and kids content to the Winter Olympics in Pyeongchang, South Korea earlier this year, Corus said. Both television and radio revenues, however, were northside compared to the same quarter last year for overall revenues that were a smidge up, to $369.5 million. Revenues for television were up slightly to $336.2 million in the quarter relative to the $335.9 million last year. Radio also saw growth compared to the second quarter last year, with revenues of $33.2 million versus $32.3 million. Subscriber fees helped provide lift, as subscriber revenues increased in the quarter to $127 million compared to $125.5 million in the second quarter last year. Merchandising, distribution and other revenue sources also increased in the quarter to $20.8 million compared to the $16.7 million last year. Total net income was $45.7 million compared to $32 million. Corus is doing business in a playground with other competitors, but it’s also seeing opportunities in the number of over-the-top (OTT) streaming sources flooding the Canadian market. Murphy pointed to recent and expected entrants including CBS Corp.’s All-Access, a Corus partner that is expected to launch in the country in June, Amazon.com Inc., Sling Inc., and even Alphabet Inc. YouTube channels. “I think in the coming 24 months we’ll see the arrival of these players in Canada, which presents a small opportunity for us,” he said, adding while he believes the industry should be deregulated, taxing of online platforms would prove “sensible” to level the playing field. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Corus plans TV ad tech test next month

Broadcast | April 5, 2018

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