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What Are You Waiting For? CTV is not going away, so why aren’t you investing more of your ad dollars in this space? With linear viewership and spending levels dropping virtually every year, the epitaphs for TV advertising have been widely reported in the trades. What is lost in this chicken-little hysteria is that video advertising is thriving - thanks to CTV. Television isn’t in decline, it’s just in transition from traditional to digital distribution channels. The same way that TV elbowed its way into the radio-dominant entertainment world of the 1950’s, streaming has arrived and is here to stay. Let’s not forget that when television made its debuted and soon dominated, radio still had a role - albeit a backseat role. Similarly, traditional TV isn’t being replaced by CTV, just improved upon and augmented. Seismic Shifts The CTV marketplace in the ’22-’23 upfront saw massive growth with a 35% increase in spending, which translated to over $6.4B dollars. Coupled with the time spent metrics where TV viewing and digital video viewing times are nearly identical, it clearly shows the continued growth and consumer adoption of CTV. In fact, 2/3’s of the digital video dollars committed this upfront were spent against streaming services. eMarketer projects that total US CTV spend this year (upfront and scatter) will reach $19B this year. The upfront haul this year was more than the total, full year CTV haul from three years ago. In fact, Disney says 40% of it’s upfront spending went to its streaming platforms and Peacock doubled their upfront revenue to $1B this year. Objective Look As with anything in this business, when you peel back the shiny veneer & Wall Street numbers, there are some challenges & shortfalls. CTV Benefits- Audience Targeting- More accurate & planful allocation of budgets to specific, high value audience targets Original Programming- Upscale, original programming Better Measurement Than Linear- Data allows for more focused view of who your ad reaches More Video Eyeballs- Pool of additional impressions helping to offset linear declines But They Have Issues Too... Uniformity & Measurement - Too many walled gardens prevent the ease of buying across streaming vendors and the sharing of data between them Frequency Capping – Again, the lack of shared data and the sheer number of vendors running CTV makes it difficult to set frequency caps Getting Crowded While streaming has been around for years, the last 3 years have seen an explosion of providers enter the fray. And they have been significant players, many of which are from traditional linear vendors looking to stem the tide of broadcast erosion and to add revenue streams. Peacock, Discovery+ and Paramount have all established viable streaming offerings in short order. It’s clear that the networks recognized the consumer shifts and had no choice but to embrace CTV or risk irrelevancy. Over the next 12 months, there will be even more competition and more choices. Several major players will roll out their own CTV services. Disney+, Netflix and to a lesser degree, HBOMax are three heavyweights poised to add more choices to the genre. The existing footprints of Disney and Netflix alone are enormous and will increase the pool of available impressions significantly. These two behemoths have 110MM and 180MM monthly users respectively - incredible scale at launch. These two will both improves and complicate the CTV space. And HBOMax is set to be combined with Discovery+ to launch a more robust offering with differing tiers. On the one hand, we will have more options to invest in and more competition to help mitigate costs. But the lack of standardization is a challenge. The nomenclature each vendor uses are unique to them. There is little-to no coordination between CTV partners. So there is no uniform way for brands to track a single data set across multiple partners because none of them are speaking the same language. What Does This Mean For Clients In spite of the headwinds facing CTV, the positives outweigh the shortcomings. Streaming is here to stay and it’s a valuable compliment to our media plans. It allows us to augment the losses on the linear side of the aisle with quality, targeted video impressions. Test and learn…and then test some more. Experiment and try multiple vendors to determine which ones fit your marketing objectives the best. These are fertile times to add more targeted tactics to your upper funnel media plans. Additionally, we expect Disney+ and Netflix to offer more unique, creative messaging opportunities. They have never accepted advertising before, so with a clean slate, it would behoove them to come to market with non-traditional ad formats. In a sea of streaming sameness, the hope is that they embrace the idea of truly partnering with brands to help us bring our marketing campaigns to life in new and exciting ways. Conclusions The industry’s collective focus has swung decisively toward the challenge posed by audience fragmentation. The decline of cookies and other identifiers is one big reason for this shift. Another is a shift in consumer behavior that has fractured media impressions across a growing number of applications and mediums. As the world rights itself after a pandemic that threw so many media consumption patterns upside down, the streaming world will begin to settle into a new normal. One where it is part of everyday life in a way it wasn’t before the pandemic. It has earned a seat at the table alongside the more established media tactics as a quality medium that can buttress media plans beset by the loss of affordable, quality, linear activity.
Guy Rancourt, VP of Media May 14, 2020 I miss sports – both personally and professionally – and I know I’m not alone. Those sentiments are echoed in conversations almost as frequently as you hear people say they miss seeing friends or just going out to eat. An unintentional consequence of COVID-19 is the realization of how much sports powers the advertising world. The absence of sports has thrown our marketing ecosystem into flux, and the ripple effect of canceling major sporting events is being felt across all mediums and all categories. In the short term, the loss of linear GRP’s, digital impressions and multi-platform marketing opportunities, not to mention the amount of unspent dollars freed up with these cancellations, is staggering. Countless marketers rely on the scale and platforms that events like the NCAA Tournament, professional sports seasons and the Olympics provide in order to showcase, launch and sustain their businesses. Removing these from the marketing equation is proving to be troublesome for many brands and agencies. Countless conversations, spreadsheets, flowcharts, meetings and revisions – all culminating in media plans of which sports play a major role. Poof! Gone. All for naught. But when they eventually come back this fall, what does that mean for the marketplace? It should be good news for brands and agencies. Many events have already been stricken from the 2020 calendar: the NCAA Tournament, Wimbledon, Tokyo Summer Olympics and The British Open, to name a few. While others have been postponed until later this summer and fall – NBA Basketball, NHL Hockey, Major League Baseball, The Masters, French Open, Kentucky Derby – many more still wait for their fates to be determined. As the leagues and television partners continue their weekly dialogues around how and when they can resume play, there are countless rumors swirling about how each of them will land the plane: Playing the NBA season at Disney World Pushing the college football season to the spring of 2021 Sequester all MLB teams and staffs in Arizona and Florida Eliminate NFL bye weeks to squeeze in games in the event of a delay While all of these options are up for consideration, they’re merely speculative solves until the country gets a handle on the Coronavirus. But the point here is that they are all working on solutions to resume play. Each already has mapped out countless scenarios and contingency plans to employ, once they are given the all-clear, in an effort to save their seasons. And they may all come back around the same time later this summer and into the fall. Clearly, there are more grave and consequential things going on in the world, so I do not highlight the lack of sports as the most pressing of challenges facing us. But make no mistake – the removal of sports has turned the marketing world on its head. According to Bloomberg, more than $2.5 billion dollars have been removed from the market this year already. That’s billion, with a B. We’re undoubtedly headed for a recession as businesses try to recover later this year and into next. We also know that production schedules for scripted entertainment will be impacted, causing delays in original programming. This will mostly affect prime time as their pilot season has been impacted the most – and who wants to invest heavily in what could be a light schedule of first-run scripted content this fall? As such, many are speculating that the sports marketplace will be flush with cash as the logical landing spot for all of those budgets. Another sellers’ market? Consider this: the back half sports schedule will be very condensed when all of these sports return. Imagine this very real scenario on November 15th: Sunday final of The Masters, followed by a National NFL window that then leads right into a World Series Game and Sunday Night Football. Talk about feast or famine. The point I’m making is that there should be a concentration of premium sports impressions in a tight window. Will there really be enough demand for this glut of sports GRP’s? Our industry is quick to say that sports – and football in particular – are mostly immune to market fluctuations. But can Madison Avenue afford to fund all of these hungry mouths this fall? I say no, and I think brands and agencies are in store for one of the softest sports marketplaces in a long time. Even the mighty NFL shield could see dents in the armor for the first time in a long time.
Guy Rancourt, VP of Media April 23, 2020 As we all continue to adjust to the new normal, it’s fair to speculate on what the future holds for the video landscape. It’s no surprise that with most of the country confined to their homes that media consumption is up across the board – especially in linear TV and OTT. But what will these changes mean long term? As audiences are in home-confinement, they have ample time on their hands to explore all their media options. In fact, they have no choice but to fill the hours- social, streaming, television and online media usage are peaking. It’s forcing people to delve deeper into their entertainment ecosystem. It’s exposing them to linear channels and streaming platforms that, 30 days ago, were not on their radar (I even found myself watching ‘I Survived’ on something called The Justice Network). And it’s growing consumption across both paid and free OTT platforms, exposing audiences to new sources of video content. Across demos, the biggest spikes in usage are among the younger demographics, which stands to reason when you consider that they were the segment consuming the least video content prior to the COVID-19 outbreak. In fact, the average viewer is spending over than an hour more per day with the television screen (5+ hours). It’s naïve to think that the COVID-induced spikes in viewership will sustain. Hopes for maintaining the ratings bumps we are experiencing now, or even the high viewership among streaming services are not practical. Levels will naturally diminish as Americans return to work and leave their homes again. Without a doubt, the ratings increases in linear are a welcome sight after years of declines, but they are unlikely to maintain the growth given: Lack of production during the stay-at-home restrictions. New season programming, particularly in primetime, will not be ready, turning viewers away when they expect new content in the fall. The trends that were present prior to the Coronavirus outbreak (audience fragmentation, linear erosion) will not be reversed, even with the massive impact a crisis of this magnitude causes. Will we see a ‘new normal’ of social distancing take effect after we get the all clear? Or quite the opposite- where everyone embraces the opportunity to be outside. At restaurants, the movies, the beach or just hosting get-togethers again after being denied those long-lost indulgences. Either way, they’ll be hungry for good content, as they have always been. They just might be gravitating more towards alternative sources when we emerge on the other side. All of this can only bode well for streaming services that were already on the rise pre-COVID and will likely accelerate adoption and usage. So, the need to diversify media mixes will only become more apparent and more necessary. Audiences will not abandon linear- so that will continue to be a valuable reach vehicle, integral to media mixes. But marketers need to recognize that a larger swath of the population will surely have sampled and grown used to a heavier dose of streaming video into their regular habits. Between Disney+, Hulu, Netflix, Quibi, Peacock, Apple TV+, Amazon Prime, not to mention free services like Pluto TV, Crackle, Tubi, etc. – they’ve never been pulled in so many directions before. Meanwhile more services are on the way from AT&T, Comcast, ViacomCBS and Discovery. Consumers are customizing their media consumption: on their terms, with the content they want to view, when they want to view it. And it makes sense for brands and agencies to follow suit.