Thanks to Wurl for sponsoring Digiday’s Future of TV Week coverage and presenting this edition of the Digiday+ Future of TV Briefing, normally available exclusively to paying subscribers.
This week’s Future of TV Briefing recaps Digiday’s five-part video series on the TV, streaming and video advertising business.
- The future in review
The future in review
Digiday’s Future of TV Week is in the past and with it the debut of “The Future of TV,” a five-part video series on the TV, streaming and digital video ad business.
The series covered a lot of ground. How traditional TV vs. streaming ad spend might trend this year. How the premium ad-supported streaming war is shaping up and the short-form vertical video battle is playing out. A check-in on the connected TV ad tech turf war. And an assessment of the TV ad industry’s progress on the measurement multi-currency front.
Here are some of my top takeaways from the series. And be sure to check out the full episodes that are available to watch here.
The streaming ad spending tipping point
This year will likely be the year that streaming ad spending equals, if not overtakes, traditional TV ad spending. That’s according to investment chiefs from Horizon Media and UM Worldwide who appeared in the series’ first episode.
Horizon Media’s Dave Campanelli speculated that the shift could happen in this year’s upfront market, whereas UM Worldwide’s Stacey Stewart posited the possibility of it happening outside the upfront in the overall TV and streaming ad market.
Whether it happens within the upfront or not, streaming usurping traditional TV’s share of overall TV and streaming ad spending would be a big deal. The question then becomes whether that tipping point turns into a rubicon or whether the situation reverts next year if the economy improves.
On a similar note, it remains to be seen how TV advertising’s legacy upfront model evolves with Stewart expecting spending to be down in this year’s upfront market and all executives seeing a need to remodel the upfront. “Flexibility” and “fluidity” are the top terms being bandied about to describe how the upfront model needs to change, as the mix of players participating in the upfront has already changed to include the likes of YouTube as well as traditional TV and streaming ad sellers.
“The term ‘upfront’ has really evolved. It’s not really about TV anymore. It’s really about premium video and premium inventory,” said OMD’s Stacey Larson.
Streaming’s disproportionate supply-demand dynamic
When Horizon Media’s Michael O’Connor said in the second episode that the streaming ad supply exceeds advertiser demand, I was kind of taken aback. I had gotten so used to hearing how advertisers’ demand for streaming inventory outstripped inventory availability. And yet here we are.
Then again, while agency executives said the overall streaming ad market has a surplus of inventory, the story is different when it comes to top-tier streamers like Netflix and Disney+.
“We know that some of these premium ad-supported tiers that just came into the marketplace did come in with very limited and-or no targeting,” said Havas Media’s Laurie Crowley.
What will be worth keeping an eye on now is to what extent these services accumulate enough audiences to offer narrower targeting options as well as whether they increase their ad loads or relax their frequency caps to accommodate more advertisers.
“One thing you you start to see a bit is, sometimes with those frequency caps, a publisher might start to hit some scaling issues,” said Tatari’s Vicky Chang.
If TikTok is banned, short-form vertical video will survive
TikTok remains the central pillar of brands’ short-form vertical video strategies, but if the app were to be outlawed in the U.S., executives from Digitas North America, Mekanism, Team One and VaynerMedia said in episode three that brands’ attentions will focus on Instagram Reels, YouTube Shorts and even Snapchat.
“Should TikTok be banned in the United States, we would still see vertical video have a place in our social plans,” said Team One’s Linda Ranieri.
“Short-form vertical video is definitely in the must-buy category now,” said Mekanism’s Brendan Gahan.
All of that being said, not all short-form vertical video platforms are seen by ad buyers as being the same. Instagram Reels and YouTube Shorts, for example, benefit from plugging into Meta’s and Google’s broader ad platforms, respectively, which can make them more attractive to performance marketers.
And while Snapchat has taken a backseat to TikTok, Instagram Reels and YouTube Shorts in agency execs’ eyes, they are eyeing the platform in the event that TikTok were to be banned.
“They’re one that folks talk about being a sneaky winner if there is like a full-tilt TikTok ban because, you know, the Gen Z jump ball,” said VaynerMedia’s Jon Morgenstern.
CTV ad tech asserts itself
Programmatic has become an important component of buying ads on streaming services and connected TV platforms, and ad tech firms, like demand-side platforms and supply-side platforms, are seeking to separate themselves from one another.
With respect to DSPs, advertisers are needing to support multiple DPS to parcel together their programmatic streaming ad buys given that some DSPs have exclusive access to inventory or first-party data sets. Of course, the addition of multiple DSPs can compound the costs to advertisers, which is why a preferred approach is to enlist one primary DSP supplemented by others. Two to three DSPs is typically the sweet spot, according to Digitas North America’s Leah Askew, Mediahub’s Mike Piner and Tinuiti’s Jesse Math.
“Two or three max. Then you’re just adding too many fees to the supply chain,” said Piner in the series’ fourth episode.
Speaking of the streaming’s programmatic supply chain, it’s tightening up. DSPs are striking deals directly with streaming services, while SSPs are seeking to get closer to advertisers. The latter set of ad tech firms are particularly under pressure as the supply chain streamlines.
“The SSP marketplace boomed into complexity. Now we’re going to start seeing it get more simple because, unless you are providing explicit value in how you’re packaging this inventory and also providing transparency — because I think that’s heavily criticized across SSPs right now — then if you’re not driving that value, then you might get cut out,” Askew said.
Measurement is still kind of a mess
The work is underway to update the TV ad industry’s measurement system, but there’s still a lot of work to be done, as outlined in the series’ fifth and final episode.
“There’s not enough consistency across all of the new currencies for us to execute a buy across every partner we want to execute a television buy against on one of these new currencies,” said Omnicom Media Group’s Kelly Metz.
Case in point: Warner Bros. Discovery recently announced support of Comscore and VideoAmp as measurement currencies but not iSpot.TV, the candidate that NBCUniversal has been pushing. Meanwhile, Disney has yet to get behind any currency contender aside from Nielsen.
“The sell side is not unified on acceptance of alternate currencies. So forget whether measurement partners are ready, agencies are ready or the clients are ready,” said GroupM’s Bharad Ramesh.
And then there’s the necessary technical work required to be able to support various measurement providers as currencies as well as the question of how advertisers and agencies will account for the corresponding increase in costs. Not that any of that will undo the process.
Then again, there’s still the question of how expansive this new measurement landscape should be. Specifically, should it include YouTube? Fortunately, for all the messiness, agencies have a clear answer on that one: Yes.
“Practically speaking, you really can’t be a currency unless you’re available at scale across as many providers as you possibly can be,” said Metz.
What we’ve heard
“One issue that is an issue if you’re a YouTuber or a TikToker or on Instagram is the timelines and deadlines in regards to branded content are very rarely reasonable.”
— Talent manager
What we’ve covered
Why creator Jorge Soto prioritizes YouTube Shorts over TikTok:
- Shorts provides a viewership pipeline for Soto’s long-form videos on YouTube.
- While Shorts only generates $0.05-$0.06 per thousand views, the revenue from Shorts-driven long-form views can be exponentially higher.
Listen to the latest Digiday Podcast episode here.
Gen Z, diverse audiences the focus of ad-supported streamers, platforms and publishers on NewFronts day one
- YouTube, Vizio, Amazon and a range of minority-owned media companies pitched their content, audience reach and ad offerings, with a focus on their ability to engage specific audiences
- Ad spend in the U.S. grew twice as fast in the digital video space compared to the overall digital media market in 2022
Read more about NewFronts coverage here.
Why BuzzFeed News couldn’t replicate HuffPost’s business model
- HuffPost had more than double the audience BuzzFeed News had, CEO Jonah Peretti told Digiday, and as a result, HuffPost’s revenue was “much bigger” than BuzzFeed News’.
- BuzzFeed’s entertainment content was “10 times bigger than BuzzFeed News ever was,” Peretti said.
Read more about the demise of BuzzFeed News here.