Advanced TV Matrix: A Market Snapshot

JUNE 2019 ACKNOWLEDGEMENTS

LIST OF WORKING GROUP COMPANIES

A&E Networks Essence Nielsen ABC Experian Marketing Services Philo AccuWeather Extreme Reach Placed Ad-ID Flashtalking PlaceIQ Adobe FreeWheel Premion AMC Networks Gamut Simulmedia Amobee GfK North America Sizmek Beachfront Media Google Sony Pictures Television Cadent Hulu Spectrum Reach CBS Interactive Integral Ad Science SpotX Cheddar IRI SundaySky Comcast Spotlight KERV Interactive Telaria Crackle Kochava The Media Trust Company Cuebiq Liquidus Marketing Verizon Media Group Dataxu LiveRamp WarnerMedia Dentsu Aegis MediaMath Xandr Digitas LBI Medicx Media Solutions ZypMedia Discovery Communications Modi Media Dish Network NBCUniversal Epsilon NCC Media

ADVANCED TV MATRIX 2 EXECUTIVE SUMMARY

Planning and executing a TV campaign used to be simple. Regardless of what inventory you bought, the mechanics were generally the same. Deals were guaranteed on a demo CPM and they would be measured and reported by Nielsen. Creative trafficking was usually pain-free. Time-shifting disrupted things a bit, but Commercial ratings and VOD helped buyers cope with the diminishing supply of live rating points. But now, as a confluence of factors have brought upon us Advanced TV, we are faced with a TV industry that’s more complex than ever. Addressable TV has been around for a number of years now, but with the advent of OTT devices and new streaming services popping up all the time, we as an industry are starting to view this opportunity in a new light—as part of a bigger push to eliminate wasted impressions, garner insights into TV campaigns, and finally tie exposures to outcomes for true attribution. Fueled by data, this new landscape goes beyond the age/sex demographic and into targetability and granularity in a very digital-like manner. However, despite the obvious benefits there is still confusion in the marketplace as to how each are transacted, measured, and trafficked differently. The goal of this reference guide is to bring clarity to this space so that when there are conversations between the buy and sell side (and everyone in between) everyone is starting with the same basic level of understanding. We have attempted to collect “just the facts” and organized this chart so that it starts with Traditional Linear TV and becomes increasingly ‘advanced’ along the way. The chart becomes more addressable, more data-infused, more on-demand, and more digital as you move from left to right. This guide will aid you in determining which avenues make the most sense for your brand. Grouped into five sections, you will gain an understanding into the transactional nature of each, the state of measurement, and even how the ads themselves are trafficked. Given today’s rapid pace of change, we expect to be making updates to this document as the Advanced TV space continues to evolve. Please read this as an invitation to join the conversation with us. For more information on digital video, please visit video-guide.iab.com. To get involved, please email [email protected] or [email protected]. Enjoy!

ADVANCED TV MATRIX 3 BROADCAST/SET TOP BOX AD DELIVERY DEFINITIONS

TRADITIONALTRADITIONAL LINEAR LINEAR TV TV DATA-DRIVENDATA-DRIVEN LINEAR LINEAR TV TV SETSET TOPTOP BO BOXX VIDE VIDEOO ON DEMAND DEMAND

Demo-Based Targeting Audience-Based Targeting Demo-Based Targeting Ex. A18-49 Ex. Auto Intenders Ex. A18-49

TV programming that follows Same programming as traditional On demand content offered by a schedule, which includes linear TV, but uses an audience- individual networks or MVPDs via both live as well as time-shifted based buying approach that the set top box VOD menu. This (via DVR or VOD) viewing, in incorporates different data sets refers to the inventory opportunity which ads are not delivered via including demographics, interests, outside the (3 or 7) day window Dynamic Ad Insertion. and viewing behavior to optimize where the live telecast ad loads a linear TV schedule against are dynamically replaced by specific networks, programs, and new ads. dayparts to better reach a higher concentration of an advertiser’s strategic audience.

ADDRESSABLE STB LINEAR/VOD ADDRESSABLE LINEAR/VIDEO ON DEMAND (VOD)

The ability to dynamically serve an ad within either a live, linear TV or VOD environment specifically to an individual household based on predetermined *Auto Intenders*Fast Food Lovers targeting criteria.

*Examples of strategic targets

ADVANCED TV MATRIX 4 STREAMING AD DELIVERY DEFINITIONS

VIRTUAL MULTICHANNELvMVPD VIDEO TV EVERYWHERE (Virtual multichannel video TV EVERYWHERE PROGRAMMINGprogramming DISTRIBUTOR distributors) (vMVPD)

A streaming pay-TV subscription, which An online business model in which television provides access to traditional linear TV networks and MVPDs allow their paying networks as well as on demand content customers to access live and/or on demand delivered over the Internet without the video content from their networks through traditional set top box infrastructure. Internet-based applications.

DIRECT TO CONSUMER SERVICES DIRECT TO CONSUMER STREAMING SERVICES

Ad-supported digitally native services that offer up TV like content directly over the Internet and completely outside of the traditional set top box infrastructure, including via Over the Top (OTT) devices*.

*OTT (Over the Top) Device - A device that can connect to a TV (or functionality within the TV itself) to facilitate the delivery of Internet-based video content (i.e., streaming boxes, media streaming devices, Smart TV’s and gaming consoles).

ADVANCED TV MATRIX 5 BROADCAST/STB AD DELIVERY STREAMING AD DELIVERY Direct to Characteristics Traditional Data-Driven STB VOD Addressable vMVPD TV Consumer Linear TV Linear TV Linear/VOD Everywhere Services How are ads Ad Delivery to delivered to the 1:Many 1:Many 1:1 HH 1:1 HH 1:1 1:1 1:1 Consumer viewer? (+co-viewing) (+co-viewing) (+co-viewing) 119.9MM TV HHs (Broadcast Only 89% of US 1 Adults use the + Pay-TV, Nielsen ) Internet (Pew7) 64 MM HHs Total Multi- 98.3 MM 305.4MM Individuals (Broadcast Channel Broadband HHs Only + Pay-TV, Nielsen1) subscribers in US (Leichtman (Traditional Research8) MVPD and vMVPD) - 74% of HH What do we 94.8MM HHs (224 MM Total Pay-TV subscribers (Traditional 2 individuals) have know about the 72.4MM HHs 7.7MM (Nielsen ) Scale size or reach MVPD and vMVPD) - 94.8MM 3 subscribers a connected potential of HHs (Nielsen2) (Nielsen ) (BTIG5) TV device each? (Leichtman 9 IAB Advanced Research ) TV Targeting Examples - Hulu Guide 38MM HHs (28 million HH Individual cable networks HH reach accessed a subscribers), varies depending on distribution Network-based Pluto TV (12 (the top cable network is in 89MM TV Everywhere million active HHs) (Nielsen2) application in users), Xumo 4Q’18 (Adobe6) (5.5 million active users)

Median Age for Broadcast Networks - 59 (Nielsen10) Median Age on Median Age for Connected TV viewership - 42 STB VOD - 45 12 12 (Nielsen ) Median Age for Cable Networks - (Nielsen ) 54 (Nielsen10) N/A since What do we this method of Consumer Profile know about buying reflects the consumer Each Network's profiles of each? M/F Skew for Broadcast Networks individually - 55/45 (Nielsen11 ) VOD median selected HHs age skews younger than 60/40 M/F (IAB13) M/F Skew for Cable Networks - that Network's 53/47 (Nielsen11 ) median age on Linear TV All varieties of content available depending on Cable TV streaming service Networks - Live Broadcast and Cable TV - New and Old Feed and Time Networks - Live Feed and On Original and Broadcast, Shifted via DVR Demand access to network content BASIC OVERVIEW BASIC (Linear) Syndicated, What type Broadcast and Cable TV Networks Cable, and Live and On Content Type of content is - Live Feed and Time Shifted via VOD-Only TV Demand, Long Networks - On and Short Form available? DVR/VOD Demand access to their content Broadcast, Cable, and VOD-Only TV Content Format Composition for 2018 - 11% Clips, Networks - On 14 Demand access 56% Full Episodes, 33% Live Content (FreeWheel ) to their content (VOD) Household Level targeted; 1st Content-Based- Behavioral Mostly by party or 3rd By network, characteristics, network (run party segments Audience-Based - IFA, Device ID, Device Type, IP What type of program, 1st or 3rd of schedule). are matched to Address, Operating System, User Agent, Daypart, Targeting targeting is daypart, party segments Some providers MVPD subscriber Network as well as 1st and 3rd party audience used? and Nielsen (syndicated offer targeting information to segments demographics and custom), by program, identify HHs in (age/sex) performance daypart, and an anonymous targeting genre. manner IAB Advanced TV Targeting Guide Yes, some networks offer Does delivery on Day 1, but Dynamic Ad type allow for No No a majority offer Yes Yes Yes Yes Insertion DAI? it a few days after (C3/C7 window) For acronyms and sources view appendix on page 11.

ADVANCED TV MATRIX 6 BROADCAST/STB AD DELIVERY STREAMING AD DELIVERY Direct to Characteristics Traditional Data-Driven STB VOD Addressable vMVPD TV Consumer Linear TV Linear TV Linear/VOD Everywhere Services Viewer experiences same number Varies by service, but typically of ad breaks and length as in each ad pod is between 60-120 Traditional Linear seconds long MVPDs are Broadcast Primetime avg = 14:52 allotted two vMVPDs are minutes of ad time per hour, 25% minutes per generally of time (Kantar15) hour for each allotted two What do we On average, 1 cable network- minutes per Ad Pod know about pre-roll ad and -this is where hour for each Structure the ad pods for 4 ads per mid- cable network each? roll break “addressable” 4.0 ads per mid-roll break, on inventory is sold (or sometimes average (FreeWheel14) (Linear) given 15% share of On average, sellable Cable Primetime avg = 16:18 1 pre-roll ad inventory for minutes of ad time per hour, 27% and 4 ads per TV Everywhere of time (Kantar15) mid-roll break environments) (VOD) Never if accessing through an Does a user antenna (broadcast networks are free to access) No login needed to access Yes, pay-TV Varies Consumer have to input content, but MVPD has subscriber Yes, subscriber service login depending on Authentication login details to No login needed to access level details login credentials service access content? content, but MVPD has subscriber level details Connected TV Apps, Mobile Apps, and Desktop Browsers 100% TV 100% TV Percent impressions served: 50% CTV, 33% Mobile, 17% Desktop (FreeWheel14)

What devices Set Top Box Percent time spent with video outside of Linear TV: are these 66% CTV, 24% Mobile, 10% Desktop (Nielsen17) Accessing consumed on Content and how does Impression the consumer vMVPD Device Distribution access it? Share of by Device for Set Top Box Viewing Hours: TV Networks, Over the Air Antenna 77% CTV, 2018 20% Mobile, Connected TV - 3% Desktop 65%, Desktop/ (Conviva18) Mobile/Tablet - USER EXPERIENCE 35% (Innovid19) Are there More robust in capabilities--examples include Interactive Ad opportunities to Limited in scope and scale, but includes interactive channels (branded extended looks, custom portals, choose your Capabilities serve interactive homepages with additional video content and/or ‘Learn More’ own creative, trivia games, request more ads? modules) as well as graphical overlays information, and more Minimal, can Minimal, serve different Minimal, Higher regional creatives regional degree of HH Are there copy-splitting to specific copy-splitting personalization Personalized opportunities is allowed strategic is allowed through serving Yes, in real time based on pre-determined data Ads to serve (serving targets if you (serving of different signals and generated from the ad server level personalized different have multiple different creatives to ads? creatives strategic targets creatives different HHs depending on in flight at the depending on based on your region) same time your region) certain criteria 96% of Linear 90% of VOD TV consumption How often is 96% of Linear TV consumption is consumption is co-viewed, When consumed through a Connected TV, 93% of Co-viewing co-viewing co-viewed (IAB20) is co-viewed 90% of VOD consumption is co-viewed (IAB20) occuring? 20 consumption (IAB ) is co-viewed (IAB20) For acronyms and sources view appendix on page 11.

ADVANCED TV MATRIX 7 BROADCAST/STB AD DELIVERY STREAMING AD DELIVERY Direct to Characteristics Traditional Data-Driven STB VOD Addressable vMVPD TV Consumer Linear TV Linear TV Linear/VOD Everywhere Services vMVPD service Cable MVPDs (their providers Networks allocation of (may sell their - Networks two minutes two minutes (~80%) per hour of Networks, Where does Networks/Programmers and MVPDs per hour of Service Inventory the inventory (National) and Stations/MVPDs commercial commercial MVPDs, and providers Sources (~20%) time for cable time) Local Broadcast originate from? (Local) networks may Stations themselves Broadcast be sold as National linear Networks addressable feed is sold by - Networks inventory) the Networks/ (100%) Programmers Direct through Direct through Broadcast, Cable TV Networks TV Networks, and Syndicators for Direct through and MVPDs, National Broadcast, Direct through marketplaces, Direct through Cable and Direct through vMVPDs, and exchanges the streaming Where can you VOD-only TV MVPDs marketplaces, service, Inventory purchase this Can be marketplaces, Sources Direct through local broadcast Networks & and exchanges packaged and exchanges inventory? station groups and MVPDs for MVPDs with Linear local TV inventory (fluidity) Indirectly through SSPs, streaming devices, Smart Indirectly through 3rd party aggregators and platforms TVs, and 3rd party aggregators What % is purchased in 14%-Programmatic Direct vs a real-time, Nascent, but starting to grow in availability (93% Private Marketplace, 7% Open Exchange) Programmatic biddable 86% Direct (FreeWheel14) environment? Nielsen demo-based CPMs, typically guaranteed on a C3 or C7 basis CPMs (either P2+ or demo guarantee), CPCV, HH CPM other traditional digital currencies One-off Strategic target specials or CPM What is the opportunistic Hybrid Currency currency used? buys may approach sometimes be (Primary and 1 P2+ impression counted by ad server negotiated on regardless of ad length Secondary 1 HH impression counted unit cost guarantee) BUYING & SELLING regardless of ad length Impressions are ‘equivalized’ Solutions are becoming available that are against a :30 spot inclusive of co-viewing based metrics for (:15 = 0.5 impressions) Connected Device and Connected TV What happens Like-for-like TV inventory used when there is to make up for under-delivery Like-for-like TV Make Goods under-delivery, inventory used Digital campaigns are typically billed reflective of for Audience pre-emptions, to make up for final delivery, so there is no concept of make-goods Deficiency and/or TV Everywhere impressions (fluidity) under-delivery cancellations? Highly customizable and typically What are some includes Limited of the common billboards, Same opportunities- Added Value/ added value themed opportunities -may include Limited opportunities, short form 'bonus' Sponsorship opportunities sponsorships, exist if dealing bonus None impressions, slates, pod ownership Opportunities based on ad overlays, with networks impressions spend? promos, directly or category custom content, exclusivity and product integrations For acronyms and sources view appendix on page 11.

Please refer to the Standard Terms and Conditions for Internet Advertising for Media Buys One Year or Less IAB/4As Standard Addendum for Digital Video Advertising in TV Long Form Video - March 2018

ADVANCED TV MATRIX 8 BROADCAST/STB AD DELIVERY STREAMING AD DELIVERY Direct to Characteristics Traditional Data-Driven STB VOD Addressable vMVPD TV Consumer Linear TV Linear TV Linear/VOD Everywhere Services Master Master video file is uploaded to ad server who video file is then deploys a VAST tag to each partner. uploaded to Master Partners are responsible to QA and clear creatives ad distribution video file is as they come in.* vendor who uploaded to then deploys ad distribution creative to vendor who Master video file is uploaded to each MVPD then deploys ad distribution vendor who then or Network, creative to each How should deploys creative to each network. depending on MVPD. MVPD Trafficking ads be Network must approve/clear who's handling must approve/ Needs trafficked? creative to run. the buy. The clear creative Traffic instructions are sent by network/MVPD to run. Traffic *IAB recommends that all partners adopt and utilize agency to each network to must approve/ the latest version of VAST (4.1 as of June 2019) indicate creative rotations. clear creative instructions are to run. Traffic sent by agency instructions are to each network sent by agency to indicate to each network creative to indicate rotations. creative rotations. How long does Trafficking it take to traffic 3-5 days prior to launch 3-5 days prior to launch Timing creative? Minimum video specifications vary from partner to partner. Best practice is to upload video file that is either built to the Mezzanine File specs per the IAB Digital Video Ad Format Guidelines or the AICP standards to your ad server. Ad server can then send What specs the appropriate version to each partner, based on Video Ad should the their requirements. Specs video ads AICP File Deliverable Specifications follow? IAB Digital Video In-Stream Ad Format Guidelines Alternative method is to reach out individually to each partner for their specs and have a different version of video file built for each partner, but this is more labor intensive. TRAFFICKING & OPERATIONAL What is the latest Minimal level of invalid traffic (<.5%) since a majority Invalid Traffic information we 0% of impressions served are direct or via Private have on invalid 21 14 traffic through Marketplaces (Pixalate & FreeWheel ) these channels? For acronyms and sources view appendix on page 11.

* See page 9 of IAB/4As Standard Addendum for Digital Video Advertising in TV Long Form Video - March 2018

ADVANCED TV MATRIX 9 BROADCAST/STB AD DELIVERY STREAMING AD DELIVERY Direct to Characteristics Traditional Data-Driven STB VOD Addressable vMVPD TV Consumer Linear TV Linear TV Linear/VOD Everywhere Services Primary: Nielsen Age/Sex MVPDs provide impression Impressions are measured via publisher-side Demographics level data and/or advertiser-side ad server Strategic target Comscore Average is typically provides commercial measured program level Measurement How is each minute via Nielsen data ComScore 3rd party measurement opportunities vary by Source measured? audience, live + MRI Fusion or provides publisher, but include: impression delivery, time-shifted up Comscore, but Nielsen data program level demo-verification, co-viewing factors, to 3 (or 7) days is ultimately used as proxy data fraud detection, viewability from airing agreed upon for age/sex by both buyer demographics and seller Alternative: ACR, STB Alternative: ACR

Completion What are the 99% (Canoe n/a for Linear, CTV - 95% , Tablet - 83%, Mobile - 75%, completion n/a n/a 23 16 Rates rates for each? Ventures ) 99% for VOD Desktop - 75% (Extreme Reach ) Nielsen HH-level verified demo impressions impression by network, Nielsen delivery for daypart, verified demo every spot day of week More custom tailored but typically includes: impression HH-level Impressions by publisher, invalid traffic report, reach, delivery for Strategic target impressions frequency, 3rd party attribution analysis What is every spot impressions by network, included in a measured by daypart, day of Reach and Post-Campaign post-campaign agreed upon week Frequency Reporting & report? 3rd party Attribution Info What level of attribution can Network, program, date, and time More advanced attribution reporting via third parties be included? because identity is known at the HH level allowing outcome for every commercial matching to happen on a more deterministic basis Third party attribution reporting is nascent, but growing - methods include analyzing commercial’s effects on search or website visitation in real time as IAB Advanced TV Attribution: Buyer’s Guide well as test/control analysis using granular STB or ACR data How long is

MEASUREMENT & REPORTING Post-Campaign the turnaround 60-90 days 3-6 weeks 2 weeks 2 weeks Reporting time for a after end of after end of after end of after end of Real-time impression and 3rd party information Timing post-campaign quarter campaign campaign campaign report? What is the Inherently viewable on a TV screen viewability Desktop Video Benchmark - 68.4%, Viewability (opportunity 22 to be seen) Mobile Video Benchmark - 65.2% (IAS ) benchmark? There is no viewability standard across OTT devices For acronyms and sources view appendix on page 11.

ADVANCED TV MATRIX 10 APPENDIX

ACRONYMS

ACR Automated Content Recognition IFA Identifier For Advertising AICP Association of Independent MVPD Multichannel Video Programming Commercial Producers Distributor C3/C7 Commercial Ratings within 3 days P2+ Total Persons (All People Ages 2 (or 7 days) of initial airing And Over) CPCV Cost Per Completed View SSP Supply Side Platform CPM Cost Per Thousand Impressions STB Set Top Box CTV Connected TV VAST Video Ad Serving Template DVR Digital Video Recorder vMVPD Virtual Multichannel Video Programming Distributor HH Household VOD Video On Demand

SOURCES 1 Nielsen Estimates 119.9 Million TV Homes 12 Nielsen - The OTT Experience: in the U.S. for the 2018-2019 TV Season Understanding Connected Living Room Audiences 2 Nielsen Custom Data Pull, Cable UEs to date Apr 2019 13 IAB - Ad Receptivity and the Ad-Supported OTT Video Viewer 3 Nielsen Data Pull, VOD Penetration Apr 2019 14 FreeWheel - Q4 2018 Video Marketplace Report 4 IAB Advanced TV Targeting Guide 15 Kantar Media Ad Time Tracker 5 Virtual MVPDs Account for Nearly 10% of Pay TV Subscriptions: BTIG 16 Extreme Reach - Video Benchmarks 2018 6 Adobe Presented Stats, Q4’18 17 The Nielsen Total Audience Report: Q3 2018 7 Pew - Internet/Broadband Fact Sheet 18 8 Conviva’s 2018 Annual State of the LRG - 2.4 Million Added Broadband in Streaming TV Industry 2018 19 Innovid - 2018 Global Video Benchmarks 9 LRG - 74% of U.S. TV Households Have at Least one Connected TV Device 20 IAB - The OTT Co-Viewing Experience: 2017 10 Nielsen Custom Data Pull, Median Age Broadcast and Cable, Apr 2019 21 Pixalate - 2019 OTT Ad Fraud Guide 11 Nielsen Custom Data Pull, M and F Skew 22 Integral Ad Science - H2 2018 Media Across Broadcast and Cable, November Quality Report 2018 23 Canoe Ventures - VOD Ad Impression 2018 Q2 Insights Report

ADVANCED TV MATRIX 11 ABOUT US

The Interactive Advertising Bureau (IAB) empowers the media and marketing industries to thrive in the digital economy. Its membership is comprised of more than 650 leading media and technology companies that are responsible for selling, delivering, and optimizing digital advertising or marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, it develops technical standards and best practices. IAB and the IAB Education Foundation are committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., IAB advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, the IAB is headquartered in New York City and has a San Francisco office.

The IAB Digital Video Center of Excellence, a dedicated unit within IAB, is devoted to the advancement of the digital video medium in the global marketplace. Its board and members reflect a dynamic mix of top television brands, original digital video content producers, prominent print publishers, digital video technology leaders, and innovative start-ups spanning across the digital video programming, marketing, and distribution spectrum. Together with its member companies and in cooperation with the IAB Tech Lab, the IAB Digital Video Center produces technical standards, research, and thought leadership critical to the field, while identifying emergent best practices in the fast growing arena of digital video. Working with the IAB Public Policy office, the Digital Video Center also advocates to legislators on behalf of the burgeoning medium.

ADVANCED TV MATRIX 12