Calum Smeaton has built a career making sense out of data. He was the co-founder and chief technical officer of Orbital Software, one of Scotland’s most exciting young tech companies in the late 1990s, which was listed on London Stock Exchange in 2000. For six years in the Noughties, he was chief executive officer of Sumerian at the forefront of the Big Data explosion. Now he has created TVSquared which has turned its attention to television advertising. Its strapline is simple: measure it, manage it.
When BQ caught up with him, Calum was in SOHO in New York in between meetings with some of the world’s biggest advertising agencies, before heading off to Silicon Valley and Los Angeles. TVSquared has developed an easy-to-use product that is very powerful, and inquisitive advertising executives in New York’s Park Avenue are sitting up and taking note.
His meeting in San Francisco is with an undisclosed major advertising house.
“We are looking at helping TV advertisers get the same level of insight and analytics as they currently get from all the other digital marketing, such as PPC [pay-per-click] and Facebook. If you advertise on these digital channels you know exactly who has clicked onto your links, you know how much they spend and what your return is on investment. There is a lot of information to help optimise that investment. The problem with TV is that it is still in the Good Old Days where you are relying on knowing that 50% of the adverts work. It’s just wondering which 50% that works,” he says.
Global advertising was a massive $495 billion in 2012, having grown 3.8% from 2011, with the United States still the largest with $153 billion in advertising revenues. The bulk of this spend is still with local television advertising – which has held its ground despite doom-mongers predicting its demise.
TVSquared’s proposition is already opening doors with both advertising and agency clients in the UK, Australia, Singapore and across Europe. It was an acute lack of transparency and analysis about DRTV - direct response television - advertising which attracted Smeaton’s attention. And it was his former Orbital Software pal Kevin Dorren who first alerted him to a specific problem. Kevin’s company, Diet Chief, is one of Scotland’s fast growing ecommerce companies, helping thousands of customers lose weight. The company delivers a range of 80-chef prepared meals to your door with the exact number of calories in food you need to lose weight. Kevin was frustrated with how best to spend his limited budget on television advertising and asked if there was anything that could be done to maximise the minimum spend.
Diet Chef launched a new television advertising campaign in 2012 and TVSquared undertook the number crunching to give Diet Chef the confidence to ramp up its spend and improve sales performance from the DRTV campaigns. It was an instant success with dieters buying more pre-prepared meals.
Smeaton says: “This is a real problem for modern-day marketeers. Today’s marketing directors are very data driven. If you look at TV, you know it works, but you don’t get a lot of information to say why it’s working. And how you can better spend your money.”
A few years back, the television programme simply could stick a phone number at the bottom of the screen, which would give a feel for the kind of commercial activity. If the phone rings, then you can measure this response.
It’s been the bread-and-butter for the X-Factor, Britain’s Got Talent, and a host of big-ticket television shows. Today more businesses are pushing the responses from television advertising online, where it is cheaper to go on the website to satisfy orders for buying products, goods and services.
“The move by television viewers to respond online rather than by phone has caused an issue for those who measure TV response.
It has been much harder to distinguish what has been driving that online response, such as email, Twitter or Facebook. What we’ve done is unlock all this and help work out when television is driving that response. By doing this, it allows us to tell television advertisers what is working,” he explains.
This means examining the channels, the programmes, and the segments of the programmes that are prompting a response. This is also about the days of the week and times of the day. So advertisers, such as Diet Chef, can slice and dice their advertising spending to ensure they are hitting the best programmes for their products.
“We can help them look at the best time. We can say Fridays are really bad for you, but Sundays are a lot better on Channel 4, Sky Living, or Comedy Central, and within that we can tell you which part of Comedy Central works best. So is Friends a good show for you or Man v Food?”
TVSquared are also attempting to demolish some industry myths: such as how worthwhile is it to position during commercial breaks or is it better at the start of a programme. Again, the answer depends on the client and what it is selling.
“We can now provide data for all the things that were once loaded into a set of assumptions about how you buy television advertising.”
The advertising industry knows that brands have different times when they can make
the maximum impact. Now finding that sweet spot is increasingly lucrative.
“What matters for a particular brand is the selection of the right time and day of the week and which channel is most appropriate. We’ve found these are two keys that we use to unlock the value,” he says.
Then it’s down to the creative elements of the advert. Is it serious, stylish, funny, topical or deliberately obscure? This can be about variations of dialects, voices or even backdrop.
“In Scotland, one of our clients found an advert was off-the-chart, but no good for the rest of the UK. Knowing what works – and what doesn’t – is increasingly valuable.”
“We can give very fine grain information to understand firstly ‘A’, whether they are getting a return on investment. Answer, yes and no. Then ‘B’ how do I use this information to optimise spend?”
For one client, TVSquared found out that 30 second ads were just as effective as one-minute adverts, which resulted in a massive saving in television spend.
“There was a very quick decision. Let’s just go with 30 second adverts. It’s that kind of information that allows our clients to spend on television, which is good, and makes it much more effective.”
Calum Smeaton, a computer science graduate of Heriot-Watt, now in his early forties, has always worked with data for different purposes. He now lives in the leafy West End of Glasgow and enjoys sailing yachts and, when he finds time off, kite-surfacing in Tiree and Portugal.
“What we realised was the whole Big Data movement was getting massive. There is a figure that 90% of the world’s data was created in the last few years. Along with this explosion of information there has had to be more sophisticated techniques to leverage insight from this wealth of data. Throughout my career I’ve been involved in companies that are looking to mine that information.”
TVSquared is a culmination of all this gathered experience over the last 20 years. “We’ve built a product and we’ve taken it out to the market, including large and smaller companies. For example, universities have been blown-away by what we are showing them. This is not because we are experts in TV but we are experts in understanding how to get the best out of data and visualise it as well.”
TVSquared was set up in late 2011, when Kevin Dorren came up with his original query.
“We got a couple of guys looking into it in 2012. Then, in July 2012, we put money in to setting up the business. We felt this wasn’t just a problem for Kevin and that we had a reasonable solution. We got version one of the product ready by October 2012 and we had our first paying customers in the UK by November 2012.”
In June 2013, TVSquared won a Scottish Enterprise Scottish Edge award, one of ten out of 216 companies, which helped with a £50,000 kickstart. The company then picked up its first United States and Australian clients.
“We have a team in the UK. My personal focus is trying to get the US cracked. We’ve got some early partnerships and early customers in the US, but this is a massive market for a small company. It is ten times bigger than the UK. We are looking at how we scale this up and have a sales force in the US. It will be about leveraging the partnerships we have built.”
Is the data-capture similar to the work with Orbital and Sumerian?
“Yes, in terms of we are trying to get insight out of data. In terms of the techniques, it is very different because the technology has moved on. The way we build the technology is different and we use different stacks to build it. A lot of the models are very specific to the problems we are solving,” he says.
The similarity is in the presentation to users to allow them to visually understand, through charts and graphics, what is happening with their data. Over the years, the viewing figures have been sampled to come up with the figure that 18 million watch the Olympics or Strictly Come Dancing final. In the UK, the Broadcasters’ Audience Research Board (BARB) provides official viewing figures for UK television audiences.
BARB is funded by the BBC, Channel 4, Channel 5, the Institute of Practitioners in Advertising, ITV and Sky, while it commissions research companies such as Ipsos MORI, Kantar Media and RSMB to collect the data that represents the television viewing behaviour of the UK’s 26 million TV households.
Calum Smeaton is too diplomatic to criticise. But it is fairly obvious that estimating viewing patterns across all TV households needs some updating. At present, a sample of around 5,000 homes using special metering automatic equipment works out the figures, from televisions, DVDs, and video recorders.
“The television industry still has the challenge. The sample sizes used to make up the audience ratings are surprisingly low and it is only when you get into analysing them, that you realise how low they are,” he explains.
For years, it was simply assumed that the X-Factor was watched by 12 million people, when the statistical data was pretty much a blunderbus rather than a sniper’s bullet.
“There are some very old models being used in terms of calculating numbers. This doesn’t impact us too much because we are looking at responses on websites to television advertising. Don’t get me wrong, BARB is a world leader, but it still has some challenges – and they are aware of that. If BARB and Nielsen say 12 million watch a programme, you are buying airtime on that calculation. What we want to know is how many people responded to your business, as a brand. That’s where we help.”
Some programmes might look ideal in terms of the right demographic, but TVSquared’s analytics have shown some less well-viewed shows can provoke a better response than the raw ratings might suggest.
“The disconnect between the ratings and the response is where we work best. What we will see is this area of ratings changing, especially with Twitter in this space, where viewers are talking about TV shows while they are watching them. The way that people are watching and engaging with TV will create a new way of measuring that viewing. The ratings will change as a result of that.”
Indeed, Neilsen is now providing social media analytics after partnering with Twitter.
Calum Smeaton says TVSquared is positioning for the future. Companies, such as Wonga, MoneySupermarket and GoCompare, might be web-driven but they need television exposure to get the reach.
“It’s not what we are doing today, but what we can enable tomorrow. The industry is going through changes. You hear Martin Sorrell of WPP talk frequently about ‘data-driven media trading’ in its broadest contexts. That’s really why we started the company because we could see - having looked at Wall Street trading platforms at Sumerian - that the way TV is traded is heading in this direction. No-one can predict when this is going to happen but we want to be part of that transformation.”
TVSquared, which has revenues of nearly £400,000, is expanding in Edinburgh, moving into a new office in Codebase, in Argyle House, the 11-floored former civil service office in Lady Lawson Street. Codebase, which began in Summerhall, is the new name for TechCube Management with 30 small firms building into an interesting high-tech cluster to rival Silicon Roundabout in London. Calum attracted funding from Kevin and Andrew Veitch, another Scottish entrepreneur and Diet Chef’s former marketing director, who have joined the team.
David Connolly, who founded StarCom Media, and former commercial director with STV, is the commercial director.
“David’s been great. He understands TV, while we understand data.” Calum Smeaton is working again with Jo Kinsella in the United States, who joined him at Sumerian. Also in the team are Gillian Black, as UK business development manager, and Hew Bruce Gardyne, the chief technology officer and married to Genius bred guru, Lucinda, and Andrew De Quincey, the chief architect who developed Edinburgh Bus tracker app.
As they say in advertising circles, watch this space.