"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
Coming out from last year’s unpredictable upfront season, the rules have completely changed. The playbook is different. The upending of the norms between TV buyers and sellers still hasn’t settled down, and likely it won’t for a long time.
2020 brought halts in production, decreases in budget (or in the best cases, shifting), holds on live sports, large increases in TV and digital video viewership, and subsequent drop-offs in linear TV. 2021 will be a defining year for how brands and agencies approach both their overall marketing strategies and their TV and video investments.
The absence of new and exciting broadcast programming for the upcoming fall season may hurt the networks. Last broadcast season left few options for brands and agencies to shift budget among the new programming.
Many media companies introduced or acquired connected TV platforms during the last few years, and we expect this trend to continue. Subsequently, this change has pushed advertisers to shift a significant part of that linear budget into streaming video platforms where there is premium, targeted inventory up for grabs. Many representatives say between 20% and 30% of linear budgets will move into streaming video. This tactical approach keeps the dollars within the media company’s ecosystem.
Another smart approach to keep those dollars within the media ecosystem is through brand integrations in key network programming. But consumers are smart – they know when they’re being targeted. These integrations need to be more thoughtful and carefully scripted to fit seamlessly within the storyline. The overt advertising or messaging should be secondary to the show’s plotline. It must feel organic.
There will be exceptions to this shift. The standard upfront advertisers in the pharmaceutical and auto verticals will continue to invest in news, talk, and other older-skewing syndicated properties. Every year, that inventory whittles down, resulting in high spikes in CPMs. But these are core dayparts and programming for these upfront advertisers, who are not as likely to shift large portions of their investments into CTV, OTT, or addressable TV.
During 2021, advertisers will continue to seek non-traditional video platforms where they can amplify their messaging, reach more niche, targeted audiences and supplement their regular broadcast or cable investments. The move also frees them from dayparts, since streaming is considered daypart agnostic (daypart agnostic refers to the fact that audiences that watch their favorite shows through connected TV platforms consume content at their leisure – no matter what time or date; while cable audiences are subject to the specific time and date that their content is set to air).
Even though this expansion beyond linear may mean abandoning the legacy, low-base CPMs that advertisers have maintained for so long, there are two key benefits: reaching core audiences on other platforms and engaging new audiences to build trial and ultimately brand loyalty. Those upsides may outweigh the downside of shifting marketing budget into non-traditional platforms.
The most important lesson learned throughout the chaotic, unpredictability of advertising during a global pandemic, is that flexibility and agility are the things that you can’t put a dollar figure on. Advertisers that can quickly shift strategies, while preserving reach and meeting the client’s goals, are in the perfect position to drive success on non-traditional platforms, such as connected TV.
Reserving budget to establish a learning agenda (a series of data-driven hypotheses before going live) is critical; you know what to measure, how to measure it, and what success looks like. Moreover, you’re poised to shift when needed.
During this year’s upfronts, agencies and brands must be ready for this new normal. 2020 forced this tipping point and rapid change in the industry. Agility will prove to be one of the cornerstones of success for this new upfront season.