The Reality of Performance CTV: An interview with Jason Fairchild, Co-Founder and CEO at tvScientific

"You don't get to live in this world applying kindergarten math to complex problems." - Jason Fairchild

In today's conversation, we sat down with Jason Fairchild, Co-Founder and CEO at tvScientific. Jason takes us behind the scenes of how connected TV is transforming television into a measurable performance channel. We discuss how incrementality testing finally proves television's exact return on investment and how TV creates a halo effect that boosts search and social metrics. We also cover Pinterest's recent acquisition of tvScientific, what 80 billion monthly visual searches mean for the future of intent in the living room, and why a highly targeted TV campaign may be the most cost-effective performance channel left on the table.

What is Performance CTV?

Tim Rowe: You are preparing to answer maybe one of the more challenging questions that the industry is facing today: What is performance CTV advertising?

Jason Fairchild: It's a good question I get asked a lot. I think start with: what is performance advertising? I spent a bunch of years in the early days of paid search, and that was sort of, I would say, the original performance advertising channel. And really what it means is that a marketer can buy media and on a granular level measure the performance of that media. So did it drive a sale? Did it drive an app download? Did it drive a lead? Whatever outcome they're trying to measure, can they do real accurate measurement around their media investment ROI?

What effectively that means is a marketer can come in and buy CTV across streaming services like Hulu or Peacock, and we can connect the dots between an ad delivered at a household and a conversion from that household. Did someone that had seen that ad buy after they saw the ad? That piece was unlocked by CTV and has never been accomplished before.

Tim Rowe: What I heard is this isn't replace your paid search budget with TV because now you can measure it. It's here we're now able to assign proper credit to television's role in driving that outcome. Did I hear that correctly?

Jason Fairchild: 100%. Now the bonus is even if you're just a pure math person and you only buy media for a dollar if you can make a $1.50 and you're just pure quant-driven, the bonus is on top of all that immediate performance value you're getting, you're getting all of the added value of awareness bumps and all of the things that TV is kind of known for in brand advertising. You're getting that almost for free. If you buy just purely on the quantitative ROI, you're getting probably another 50% more value just in brand advertising, which is awesome.

The Halo Effect & Incrementality

Tim Rowe: What do we see in the Halo report? What are some interesting findings that you and the team have uncovered from advertisers that do this?

Jason Fairchild: Leaving the product aside, if you deliver one ad, what's the click-through rate on the last channel? With a control group that didn't see any ads, what is it? Then they see one ad, two ads, three ads, four ads, up to 10 ads over the period of call it a week. What you see is the click-through rate at the last channel goes up, the dwell time and purchase rate goes up the more you expose them to TV advertising. This is not soft analytics. When you click in, you can see the time-date stamp of ad exposure versus last click; you can see the real hard underlying data.

A search ad or a social ad is an inch tall by a couple inches wide and it's there for a couple of seconds maybe. A TV ad is full sight, sound, motion, 60, 70, 80 screen inches wide. It's 100% viewable for 30 seconds. It's a radically different presentation of the advertiser value proposition that connects emotionally and visually. In paid search, the one thing you can't do is create more searches. You can't create more people wanting Domino's pizza from Google. What you can do with TV is create more people wanting Domino's Pizza or whatever your product or service is.

Breaking Agency Frameworks & Kindergarten Math

Tim Rowe: What are some of the drawbacks or holdbacks from brands and advertisers who haven't yet adopted?

Jason Fairchild: The bigger the advertiser, the more they use agencies and there's like a legacy framework. They'll have the TV buyer, the radio buyer, the sort of legacy media buyers. Then they'll have the performance teams, and those usually buy search and social. When you go and talk to someone about TV at an agency, they immediately point you to the legacy teams who don't even speak this language. They talk about gross rating points, Nielsen measurement, and upfronts—all stuff that has nothing to do with performance. Job one is basically getting to the right person that speaks performance.

Job two is you have to educate around everyone being indoctrinated around last click or paid click KPIs. Ford spends $150 million a year on advertising the Ford F-150 pickup truck. And what do people do? They go to Google, find out where the local Ford dealer is, click on something, and ultimately in the marketer dashboard Google gets the credit for that. The $150 million is not even considered. Leaving aside right or wrong, it's not accurate. Marketers need to understand that that is not true north. That's very simple kindergarten math. And you don't get to live in this world applying kindergarten math to complex problems. Incrementality testing is the gold standard for understanding the impact of any one channel on driving the outcome.

The Pinterest Acquisition & Visual Intent

Tim Rowe: The acquisition closed earlier this year with Pinterest acquiring tvScientific. What was compelling about that, and what are you looking forward to?

Jason Fairchild: What was compelling to me about the Pinterest acquisition is they have a massive amount of visual searches. They do 80 billion searches a month, half of which are commercial. That makes them larger than Amazon in terms of commercial searches every month. Commercial means a person is searching for a product—makeup, home improvements, a car, hubcaps, whatever. That is a bunch of intent. That's search intent. We know from Google and Amazon that shopping intent data is really valuable. The idea is that you can get to someone that's in the market for a car or home improvement category: you can place an ad on Pinterest, but you can also place an ad in the living room on the big screen. You get multiple opportunities to put your ad in front of that user at Pinterest and in the living room, which inevitably is going to drive better performance.

Tim Rowe: We did the math on paid search recently, backing into a CPM, and they were kind of crazy—like $70 to $80 CPMs. Does that track?

Jason Fairchild: If you get a thousand impressions and a 5% click-through rate in paid search at $2.50, you can do the math on what it cost you to get 1,000 impressions: it's anywhere from $30 up to $100 CPM in certain categories. You can buy highly targeted TV ads for a $15 CPM in that ballpark. So it's incredibly cost-effective, and paid search is very expensive for obvious reasons. There are only so many searches in a given category. TV will help drive more people into the intent category. And if you layer on Pinterest data and surgically target people that have already expressed intent, we experience daily huge bumps in performance.

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