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TV advertising in transition amid streaming and changing viewing habits – The Hollywood Reporter


To hear TV managers tell you, the advertising business couldn’t be better.

“The lead-up was historic,” said Lachlan Murdoch, CEO of Fox Corp., on September 14 at a Bank of America conference, calling the market “tremendously strong.” Discovery announced its “most successful forerun ever,” and NBCUniversal proclaimed double-digit price and volume growth. But the endless superlatives obscure a changing business as consumers and businesses move from linear television to streaming. Then there is the mess fiasco: the broadcasters’ war with Nielsen, who has been supplying currency ratios for TV advertising for 60 years.

Although total TV advertising is set to top $ 60 billion this year, the market is projected to shrink 4 percent in 2021, according to media agency Zenith, creating an incentive to deter digital giants from stealing stores.

The big advantages of the TV giants are quality and size. “There’s a lot of demand for ads in high-quality programs, and there’s a deluge of ads on social media screens that people can skip over in seconds,” said Kevin Krim, CEO of EDO, a data company that operates the TV commercial performance tracked. “But what if you have good shows that you want to watch and can’t skip the ads? Advertisers love that. “

The shift in viewing habits is further fragmenting the video ecosystem as broadcast networks, cable channels, large streamers, and smaller ad-supported streamers (like Tubi and Pluto) all battle for shrinking consumer attention.

“I am convinced that streaming revenue per hour for advertising will blow away everything that is currently running linearly,” says Michael Beach, CEO of the advertising analysis company Cross Screen Media. “It will take a couple of years, but the first struggle for the existing group is to keep the audience in their ecosystem. None of them do a great job there. “

The unbeatable size of the channels comes into its own when it comes to sports programs. Crimea notes that NBC’s Sunday Night Football reaches so many consumers that there is no way for an advertiser to reach this simultaneous magnitude in the digital realm, where platforms continue to be heavily advertiser targeting. While Facebook is making Toyota pay a premium to target users in the market for a new SUV, NBC is reaching a large segment of the population, including those who are in the market now and who will be soon. “Those media owners who are selling this ad inventory are smart,” says Krim. “You understand that you can take on Google and Facebook by playing to your strengths, but also reacting to the attractiveness of your competitors.”

That likely means a two-pronged approach: event-driven programs like sports and award shows that offer a scale, and on-demand videos that anchor a long line of targeted advertisements. “[Streaming] has a targeting advantage and strengthens our reach equation, especially when combined with linear, “said Bob Bakish, CEO of ViacomCBS, on September 22nd at the Goldman Sachs Communacopia Conference. In fact, companies like ViacomCBS and NBCUniversal are that increased Report reach due to the bundling of their streamers and linear channels, one reason the upfront payments for 2021 were so strong.

However, before they can get to that light at the end of the tunnel, they have to deal with the measurement problem. Networks, led by their trading group Video Advertising Bureau, are angry with Nielsen, arguing that the exhausted viewer panels during the pandemic resulted in skewed data and that it is taking too long to integrate broader streaming and viewership (now sometime in 2022) . In the meantime, the Media Rating Council has revoked Nielsen’s accreditation and NBCU is looking for new suggestions for measurement partners.

In a September 9 letter, David Kenny, CEO of Nielsen, apologized to the company’s partners for taking too long to explain how the COVID-19 security protocols affected the panels, adding: “We have and will continue to respond to the MRC and our customers in these areas. We can improve as your audience changes at a rapid pace.”

But these changes in consumer habits, combined with digital giants chasing a piece of the pot, have led TV companies to look for alternatives, with Comscore and VideoAmp now offering measurement options. While (reluctantly) Facebook or Google measurements are accepted at face value, marketers are unlikely to embrace an option wholly owned by any of the major TV companies, given that TV ads have long been bought and sold in a foreign currency will. “No advertiser will ever trust the publisher who delivers the media and also gives you the measurement,” says Seraj Bharwani, chief strategy officer of the digital advertising company AcuityAds. “You won’t grade your homework yourself. That is a cardinal sin. “

So the TV advertising business is changing. Viewing habits change, metering changes, and the technology that drives everything changes. Traditional players have one major advantage: they still know how to make good television. For a marketer looking to reach a large chunk of the country in one fell swoop, there is no better place to get a return on investment. Krim says: “It is inevitable that high-quality TV programs will be one of the best advertising spots in the distant future.”

This story first appeared in the October 6th issue of The Hollywood Reporter magazine. Click here to login.


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