MediaTalk | Season 4 | Ep. 18 - From Households to Humans: How First-Party Data Could Reshape the Upfronts

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with the S&P Global Market Intelligence Tech, Media and Telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global Market Intelligence, where the news and research staff explore issues in the ever-evolving media landscape. Today we're joined by Sean Cunningham, president and CEO of VAB, or the Video Advertising Bureau, a trade organization representing the advertising sales department of networks and distributors. VAB is also a key industry source for marketers when it comes to insights-driven video research, intelligence, and thought leadership in the US, as the group looks to help brands drive sales and maximize outcomes.

Sean's background is rooted in the agency side with stops at Lowe, Lintas & Co. and Universal McCann. Sean is also committed to building business futures through transparency. To that end, he's created and leads the VAB Measurement Innovation Task Force. His work there has made him a favorite son of Nielsen, whose measurement estimates have been the basis for ad industry deals for decades.

Sean, how are you doing today?

Sean Cunningham: I'm doing very well, Mike. Thanks for having me here.

Mike Reynolds: All righty. Sean, you've been with VAB for many moons now. How has the group's mission and your focus evolved over the years?

Sean Cunningham: It changes constantly. One of the great things about being in the VAB is that we've had no year that looked like the year before it. And we were once the Cable Advertising Bureau, and then the Video Advertising Bureau. And we are creating work and doing things and being in forums that I'm not sure that we could have contemplated a decade ago.

So constantly on the move. And we love the two things we do. We give agencies and advertisers a ton of insights — fully objective, 50-plus reports a year. They're highly valued and get a lot of feedback, so we love that part of our business. And yes, we're not quiet when it comes to currency advocacy, and that continues to be something that, you know, there are a lot of questions about. And so we're kept very busy on both fronts: both insights and currency advocacy. And I think this is one of the most exciting time periods ever in video advertising industry history, just because of the frenetic pace of unanswered questions and how it's all going to work out, shake out, and how it's all going to come together.

Who are the winners? Who are going to be the also-rans? And this is just an exciting time. It really is.

Mike Reynolds: And again, things have evolved over the years. Video's gone from broadcast to cable to digital to social to streaming, and now to free ad-supported channels like Fox's Tubi and Paramount's Skydance Pluto TV.

There's also connected TV, or CTV. Sean, what has CTV's impact been on linear? Is there enough inventory and measurement for this platform at this juncture?

Sean Cunningham: The way I look at it is I take a look at premium video, and I think that when marketers are looking to get to their customers and they're looking at levers, I don't know if they sit there and nor do their agencies say, "Let's get a mix of linear and CTV." They've got incredibly well-advanced, data-driven targeting tools, and they know where they can find their audiences, and wherever they happen to be, they're going to try to activate them into some kind of behavior.

And so as they fall, they could fall under what we would call linear. They would fall under what we call CTV. These things are, of course, largely invisible to the consumer.

And to us it comes down to this idea: so what's truly premium? What are the things that are going to be the ways you're going to connect with real human beings, that you're going to get a powerful, potentially emotional, visceral immersion into that content, and you may get a consumer action out of it?

We sit there and we say, "Look, the characteristics that we understand that have moved the most goods and built the most brands have got four things in common with respect to the content that carries that advertising."

That is: it is professionally produced long-form. It is something that has got the propensity for good emotional engagement and high attention. It's multi-platform, it's brand-safe, and it's fully transparent regardless of the device, the conduit, or the platform. So when we are looking and we're talking to advertisers about how are you going to get the goods sold? How are you going to get the brand lifts? How are you going to get the outcomes? How are you going to get those tangible, measurable KPIs done? We start with a structure that says you would build your plans around the truly premium content. If that falls in CTV, so be it. If it's in ad-supported streaming, great. If it's in what we call linear, fine. If that happens to be on a mobile device, however it happens to happen. But again, when we're getting into taking a look at things, there are parts of the CTV landscape that don't have full transparency, that aren't per se brand-safe because they don't have the transparency that you're looking at, say, in the programmatic CTV space or that kind of thing.

So to me, it's more about: are you talking about an instrument that can do all of the heavy lifting for a marketer and that's got those four or five pillars? And maybe sometimes the quickest way to do it in terms of the triage of how do I think about different forms of video and what's truly premium is maybe those last two: brand safety and full transparency.

If something can't pass those two tests, then the first three don't matter.

Mike Reynolds: Okay. That makes sense. A lot of premium content has migrated to the big streamers, whether it's Peacock or Paramount Plus or HBO Max, the Disney products, and then Netflix and Amazon's Prime Video.

How have they changed the landscape overall, Sean?

Sean Cunningham: They're meeting demands. The reason that they have seen the hyper-growth in the tens of millions of subscribers and more has to do with these companies understanding what I call the contract. And the contract with the modern video consumer is really simple: it's arm's length, moment's notice. Yes, absolutely, I wanna see the playoff game on a 72-inch screen, which happens to be a shared experience, but that's just part of the contract. The other part of the contract is what I call arm's length, moment's notice.

Whenever I snap my fingers, I should be able to get premium video, and I should not have to go any further than where my fingertips are to get it. And understanding that contract, these companies have built the content libraries, they've acquired them, they've spent billions in terms of launching these streaming products. They've figured out what does make it worth it in the kind of trade of value — yes, advertising is fine if I can get it at X point versus Y point. Video is probably the most ubiquitous human behavior other than eating and sleeping, that kind of thing. And the explosion of the last decade is just a demand that if you're going to be in the business of reaching and making an impression on human beings at scale, you have to have that content at arm's length, moment's notice.

And it's a very expensive proposition to get that done. These companies have done it. They're beginning to be rewarded for that. And to me it makes for an ecosystem that continues to evolve around consumer needs. But if you're going to move goods and services and you're going to fill sales channels with productive leads, you better make that impression where that consumer assumes that they're going to be able, under all conditions, to snap their fingers and get your world-class content.

Mike Reynolds: Are the dollars that are following premium video on the subscription video on demand services generating their own budgets, or is it coming from other places?

Sean Cunningham: I think it is largely coming from other parts of the marketing budget.

I think that there's some that's moving around inside of from some non-video instruments and that kind of thing. I think overall a lot of the growth has been the budgets are growing. There has probably been some reduction — as there was a reduction in viewership in linear, there was a reduction in dollars because why? People were following the eyeballs into streaming. That being said, on a persons two-plus basis, we had over five trillion premium ad impressions in broadcast and cable in 2025, last year. I think that part of the reason that the dollars are incremental is because with all of this comes really good first-party data, and with that first-party data comes more of a bold line cause and effect between these impressions, how productive they can be, the kinds of consumers they can get to, and the kind of scale where they're able to do a lot of very advanced and custom targeting. And they're seeing the kind of lifts and the kind of outcomes that they're looking for.

So when you're showing lifts in outcomes and you can have more of a bold line between that investment and what the payout is, you're going to find dollars from other parts of the marketing budget where it's less of a bold line. So I think that the power of that first-party data is part of what has attracted some of the money from outside of what had been just the video advertising pool previously.

Mike Reynolds: That's an enormous amount of impressions that, you know, again, still with linear, but again, it's older. The people that are watching are older, but it still provides that mass reach. In terms of the content, and this is an overgeneralization perhaps, but again, what we're seeing on broadcast these days, Sean, is a lot of procedurals, maybe a little bit more in terms of reality and game shows. Sitcoms seem to be dwindling. Do I have that right? In terms of your members, are they looking at some different formats, or is that where broadcast is going?

Sean Cunningham: I think that what they're looking to do is engage across all their assets, and yeah, there are certain members that have these jewels that were previously referred to as broadcast networks. And some of the loyal audience there is an older audience. But the fact is that they're creating content to go across all their platforms and go against a lot of different targets. Because of the fact that premium video is ubiquitously available in so many different ways, there are — whether it's sitcoms or other things — when that type of programming is now episodically streamed in a fast environment, there's less of a demand then on one of the networks that used to be a broadcast network.

They're going to pour more money into sports and sports rights, sports production, and that kind of thing, and events. Because those tent-pole events and those premium sports draw these enormously attractive audiences.

And you talk about things like NBA basketball, NFL, you talk about NFL post-seasons, you talk about the NHL, you talk about Major League Baseball, you talk about March Madness, and there's this psychology that is somehow some separate part that technically is labeled linear, but that we really know is different — that's live sports. And the fact is an enormous amount of those impressions right now are in the most premium properties, which are not older-skewing.

But to me, the reason that these brands have stayed and kept appointment television has to do with the fact that they still have a lot of the best stuff on earth. They still have a lot of the really top-tier live sports and a lot of top-tier events. And that also allows them to promote all the other programming they make during the year and get tune-in that way. So the model is still working. I think though that the best of the best stuff they have — which is major live sports — has never been better, and it's just had a cascading effect over the rest of their portfolio.

Mike Reynolds: Upfront season is just about to begin. In terms of the market, Sean, are we looking at separate entities at this point: streaming versus entertainment versus sports, which you've just described as becoming more and more important to the broadcast realm?

Sean Cunningham: I think that when I look across a lot of my major members and I look at their portfolios, they have streaming elements. They have a broadcast network. They have cable networks. They have a lot of different ways and a lot of different instruments of connecting to the consumer. They've got a ton of insights as to the types of targets they're looking for. And that multi-screen TV player, that seller, is going to come back with a whole portfolio approach as to: here's how I can get to your import automotive attenders who are coming off their 36-month lease who live in XY. Right. And there's four more qualifiers that are more sophisticated that trail that. So there's this sort of digital nature to the targeting. And when you've got a really well data-driven idea as to exactly the prospects you're looking for, you really do look across portfolios, and that becomes how you do it.

It becomes: where's the group of consumers that I can activate? Where do they happen to be? And the people who are coming to the agency and the advertiser who've got a whole portfolio of different options — they've got some of that target in streaming, they've got some of it in broadcast, they've got some of it in cable, they have some of it in a fast channel, they have some of it on demand — and they build plans that way.

Mike Reynolds: But you guys, I think at the beginning of the year, you talked about maybe recommending that more transactions take place against households or persons two-plus. I'm trying to figure out the reasoning that way.

Sean Cunningham: Yeah. It had to do with stability. We took a look at Nielsen's panel-only data for 23 years before they toggled over to big data plus panel. Right. And then we looked at three years' worth of big data plus panel — so 2023 into 2026 — and we saw two things happening. We saw systemic undercounting on specific demos. I'd say 25 to 54 was the most egregious over the last five, six years. And we saw that and we saw artificial aging.

There was this artificial skew inside of the panel where everything was being read as being so heavily 55-plus as 25 to 54 was being decimated at the same time. There are no trends to support that anywhere else in any realistic data set.

And we took a look at a lot of data sets and realized that the most stable way to have agencies and advertisers be able to put guarantees in that were going to be assets as opposed to liabilities for both was to go where the fewest historic decimation of the demo had happened and where they had the least instability and where you had the most predictability. And that happened to be in people two-plus and households.

The fact is too that because of a lot of these targeting instruments, while deals and guarantees had historically been done on 18 to 49, 25 to 54 — that's just about no one's target. No sophisticated marketer comes out with an age, sex, demographic target that has got a 30-year range inside of it, and that the only qualifiers have to do with gender and age, right? That is no one's target. And so we were looking at it and saying these proxies are becoming less effective because of the fact that in one of our lead currencies, they've been artificially destroyed. So we wanted to have the option of having some predictability and some sanity for both buyer and seller and saying, "Go to the most stable basis."

And then we know you've got 11 different other points of intelligence that tell you inside of that portfolio where you're going to go. So we know you're going to do that anyway. Okay. So why not buy it on the most stable demo where you can have the most stable guarantee with the most predictability, and you can focus all your time on the magic inside of the portfolio optimization as opposed to constantly having to buy and manage something for audience deficits that are artificially happening anyway, that we know aren't real.

Mike Reynolds: Okay. You had mentioned big data plus panel. I write a lot about sports and viewership, and invariably, every story has something to the effect: yes, this was instituted back in September. Sports programming has benefited greatly from these estimates; maybe entertainment not so much. 

Sean Cunningham: Unfortunately, still a lot being worked out.

The islands inside of the data sets that they were looking at around the time of the last upfront — there were some islands of relative predictability, stability where things looked better, and those were a lot of the male demos in live sports. And then everything else did not look very good and did not look stable, and did not look like there was a sane reference between that and the forerunner, which had been panel-only.

There were a lot of problems. We were speaking up on behalf of the market talking about the twin dynamics of undercounting and artificial aging. And what happened was Nielsen responded. They came back with a combination of four enhancements, and those so far... And we've got a year's worth of data now, a year's worth of impact data that covers all of 2025 for us to take a look at it, and it does a pretty good job of repairing where the big craters were. The big craters were in cable entertainment, for example, or cable networks. And these four fixes lift those now versus what the previous panel plus big data had said. They lift those audiences in the high teens, in the low 20s, depending on how you look at it. And then where the performance had been strong in the last upfront — where the previous non-adjusted or prefix panel plus big data looked strong — it really doesn't help. It doesn't help NFL football. It doesn't help a lot of sports. So it's interesting that this sort of backfill of fixes covers where the big craters were, and where things were less problematic, it doesn't add much at all.

Mike Reynolds: So Sean, given that this methodology was supposed to be the backbone for this year's upfront, are things ready?

Sean Cunningham: Ready is a relative term. Okay, because we've now got two data sets for the exact same time period. So we've got for the same time period we had a whole set of data that ultimately those who did deals and did guarantees had to live by, which was the previous data set. Now we've got the demonstration and the impact data from these four fixes, and it's a completely different story with respect to things like cable entertainment. It affects Hispanic cable. There's a lot of variants. So now the question is: so this is the quote-unquote new normal, which is a very different profile from what we transacted on last year. Are we just starting over with a new reality and how do we trend versus last year?

I just, in a well-functioning marketplace, a currency is essentially a quiet enabler, right? It's the woman and man in the gray suit who just does their job. The role of currency in a well-functioning marketplace is not one of loud distraction.

Mike Reynolds: Is all of this going to make for a lengthy upfront?

Sean Cunningham: I think upfronts are hard to prognosticate, and I think each one's got a life of its own and what best suits the buyers and the sellers is what's going to happen. That ultimately is they've got the same common clients. They wanna strike win-wins and they wanna do that in an orderly fashion, but they also wanna do that in a way that is the most advantageous, coherent, data-rich laydown for client success.

Sometimes that can happen over a quicker period of time, or it takes sometimes longer. It's going to take what it takes. But yeah, are we looking again at a marketplace where the buyer and seller have got a bunch that they've gotta sort out again? Yeah, we do. Is this, hopefully, one of the last times we have to do this with this toggle over to big data plus panel, where in the future we can have more stability, more predictability? Yeah. Hopefully next upfront it'll be easier, more coherent, more predictable, and we'll have less trouble with the currency. But yet here we are again. I think that this is all one of the reasons that there's been so much noise over the last two, three years about optionality: about what about VideoAmp? What about Comscore? What about iSpot? Right. And I think that also what's going on too is a lot of the companies that you mentioned before — now they've got a lot of streaming, which means they've got a lot of consumer data. They've got a lot of video data. They've got a lot of first-party data. You wonder if the fix for all this is going to wind up being, for multi-screen TV, a first-party fix as opposed to a third-party fix.

Mike Reynolds: Interesting.

Sean Cunningham: Maybe our future isn't finally fixed third-party. Maybe our future truly is first-party dominant and there's some role for a third party. But the data is in the hands of the big media companies. You've got two media behemoths in the overall advertising ecosystem where their first-party data is the trading currency, and that has become an accepted norm to the point where those are the entities with the two largest stacks of advertising dollars on the planet. There's obviously an appetite for trading on really good first-party data. The difference is that stuff that comes out of a multi-screen ecosystem would be transparent — transparent — as opposed to the two mega walled gardens where it's you get to see what they let you see. It's not transparent at all.

Mike Reynolds: So you mentioned the big walled garden guys. Any slowdown digitally for Meta and Google?

Sean Cunningham: I think that one of the things that we're starting to see is the path to actual human beings, real consumers with credit cards who you wanna build affinity with, that you can have a relationship with, that you can get loyalty from and repeat purchase — we're seeing there's an increasing distance between the marketer goals and getting to real human beings.

And right now, in terms of the overall traffic on the internet, 51% of all traffic on the internet is non-human.

Mike Reynolds: Really? Okay.

Sean Cunningham: Yeah. And 37% — 37% of all traffic is bad bots.

Mike Reynolds: Okay. VAB does a ton of research. Are there a couple of things that you've published recently or about to come out that people should be aware of or really take notice of?

Sean Cunningham: We so enjoyed a whole study — a year-long study that we did with TVision on eyes-on attention having to do with CTV and having to do with what we consider, again, looking at what's truly premium in CTV. And when I talked about truly premium, one of the things I said is that it's gotta be able to deliver engagement and attention.

One of the things that TVision allowed us to measure for a year was we're able to take a look at about 21 different ad platforms and how much eyes-on attention they have. And it was interesting because we were looking at some of the CTV scorecards, for example, that comes out of the gauge, which has always got YouTube as the going-away winner, right? Sure.

But when you actually then have an instrument that can take a look at eyes-on attention, it's a resorting based on people who are actually watching versus tuning, if you will. Interesting. That was a lot of fun. Interesting. Yeah.

And we also just did one that had to do with the news in this environment and had to take a look at just how strong an instrument news channels are with respect to whether it's a political candidate, whether it's a brand, whether it's anyone who's out there trying to make a scale impression.

We have a lot of premium advertisers who avoid some of the cable news channels and avoid news in general, and we've taken a look at it and gone, "Boy, you do so at your peril." There is just so much good going on there. And we looked at all the associations from viewers and how they think about brands that are in X environment versus Y environment, and that was really interesting and really compelling.

It turns out that it's such a great audience. So those are a couple of things that — okay — we've been doing that were a lot of fun.

Mike Reynolds: You guys can check this out at www.thevab.com and check out all the great research that VAB does. That concludes this episode of MediaTalk. I wanna thank our guest, Sean Cunningham, President and CEO of VAB, for spending a lot of time with us, sharing his insights, and hopefully he is still going to join us at the Kagan Media and Telecoms Summit on June 9th in Manhattan. Thanks, Sean.

Sean Cunningham: Wouldn't miss it, Mike. Thanks a lot. I look forward to it.

Mike Reynolds: And thanks to all of you for listening. This is Mike Reynolds. We'll catch up soon on the next installment of MediaTalk.