The 2021 TV upfronts are underway, and they are like no other. The pandemic had an indelible effect on how consumers view content and the marketplace is being forced to react. As part of our deep dive into the future of TV, The Drum asks three top media buyers to offer their assessment of the biggest changes they are seeing right now. Here’s what they have to say...
1. Network ratings erosion. Anyone see the Oscars?
That’s a rhetorical question. Ratings crashed 58% to an all-time low. Yet while the amount of broadcast viewers is getting smaller, pricing is getting higher. As media buyers are looking to satisfy clients’ reach and frequency goals, the amount of gross rating points (GRPs) just aren’t going to be there. This creates two problems. One: since there is limited supply, the networks can charge more because the demand will be there. Two: media buyers are now challenged with making up for those lost reach and frequency goals elsewhere, which means they need to navigate the wildly fragmented streaming and social video landscape.
2. The arrival of connected television (CTV)
To say people watched a lot of streaming programing during the pandemic would be an understatement. The shift to CTV and proliferation of content of OTT devices has happened fast and the impact on linear TV is clear. Now it’s a must for any media buyer’s mix. “Covid stepped on the accelerator – that’s the elephant in the room,” says Ryan Eusanio, managing director of digital activation at Omnicom Media Group. “It’s the big change that’s happened and obviously changes the way that we need to think about how we approach different strategies.”
3. Navigating the fragmentation
The onslaught of new streaming services (HBOMax, Disney+) is a symptom of a feverish category. But it’s not just the flurry of new players that are now in the mix. There are the social players (YouTube, TikTok, Facebook, Snapchat). There are the TV makers/OEMs (LG, Samsung, Vizio). The list goes on. “The really big change is who you’re talking to,” says Brad Stockton, vice-president of video innovation at Dentsu Aegis Network. “You’ve got players like LG ads – I’m curious to see where it nets out. Vizio really got its story straight. There’s Samsung. Clearly there’s Roku and Amazon more than ever.” Then there are stealth players, such as Twitch and the relaunch of G4. “I would keep an eye on all the gaming players.”
4. The rise of programmatic buying
The tipping of the scales to CTV has also sped up the use of programmatic buying for TV inventory. “The biggest change is that programmatic is part of the upfront,” says Alexander Stone, senior vice-president of advanced video and agency partnerships at Horizon Media. “We are managing that transition of shifting those linear dollars to CTV – and not just the CTV direct insertion order, but to programmatic. We really value the private marketplace model because of the flexibility it allows.”
5. National addressability
Pivoting from targeting programs to specific targeting audience segments is a marketer’s dream. As addressable options expand from Roku, Warner Media and other key players, buyers are taking a notice. “Obviously we’re keeping our eye on what’s going to happen with national addressable,” says Stone. “Right now, everything is single advertiser model. Once it goes to mass, that’s where things really start to heat up and get interesting.”
6. The value of agencies
Does all this sound complicated? Well, it is. Especially when you compare it to golden era of buying four TV networks and calling it a day. That’s why agencies that offer the talent and tools to help clients navigate TV terrain are gaining recognition. “It’s getting harder to reach consumers and your media buying needs to be more complex as a result of that,” says Eusanio. “You don’t just have one place you can look to, like a Nielsen rating. There is no one universal source of truth. These different ecosystems all have different signals and not all of them talk to each other… agencies have the opportunity to step up in a much bigger way and really make sense of the complexity and fragmentation.”
7. Content. Content. Content.
Perhaps the one thing that hasn’t changed is the desire to be aligned with strong content. There will be plenty for consumers to watch once the new season begins, and negotiations are said to be furious for some of the top tentpoles. Of course, for those who miss out on some of the more traditional buys, there will be lots of other options. “It’s going to be a shift,” says Stone. “It’ll be interesting to see how the clients adjust because at this point, buyers and sellers are ready to make these moves.”
From late April until early May, The Drum is taking a deep dive into what’s in store for the small screen as we launch our Future of TV hub. And don’t forget to sign up for The Drum’s daily US email here.