- Mike Shields is the former advertising editor for Business Insider and CEO of Shields Strategic Consulting.
- He argues that the TV ad industry is desperate to retain its relevance, focusing on data-driven targeting like its digital media peers.
- But the sector may be too slow for its own good, he says.
- TV ads have taken a hit as sports and top shows have been delayed or halted production during the pandemic, while TikTok, Snap, and YouTube, poised to be perfect avenues for brands and break into television, have growing, younger audiences.
- The industry's one saving grace is its legacy — the idea that only traditional television is worthy of TV ads and TV money, he says.
- Visit Business Insider's homepage for more stories.
The TV ad industry is desperately trying to retain its relevance by co-opting some of digital media's most attractive attributes — data-driven targeting, along with speed and agility.
But given how fast advertisers have shifted strategies during the COVID-19 pandemic toward more trackable, flexible media options, you have to wonder: Is television advertising too slow for its own good, and in danger of being left behind?
By all accounts, the pandemic-delayed TV upfront selling period this year was far from robust. That's understandable, given that sports were being canceled or delayed and many top shows had to halt production. Not to mention the fact that given the broad uncertainty in the economy, many brands weren't in the commitment mood.
Some media companies were OK with this — others, not so much, according to ad executives.
"One thing we have seen is that as a result of the pandemic, there was fury among clients about the inflexibility of [TV networks] and the unwillingness of the networks to release people from commitments," said S4 Capital Chairman and CEO Sir Martin Sorrell. "That I think will affect future decision-making. That's an emotional scar. I think a number of people who were big digital spenders before COVID will become even bigger digital spenders."
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That makes sense, given how many brands have seen so much of their business shift online as ecommerce and trends like curbside pickup have soared during the coronavirus outbreak. Brands were already looking to better track the impact of every media dime pre-COVID-19, and in 2020 that urgency has gone through the roof.
Which might be why you're seeing TV try to up its targeting game. A few weeks ago, Nielsen announced plans to better measure addressable TV ads, with hopes to bring what is typically a local/cable tactic to national TV — eventually somehow. This has been a slow developing market for what seems like a decade or more of false starts.
Depending on which source you use, addressable TV is roughly a $3 billion market in the US. It's growing, but consider that TV advertising overall captures $70 billion annually, you'd think things would be moving a lot faster. It surely doesn't help when you have companies like WarnerMedia touting addressable TV one year and then turning around and exploring a sale of the data-driven TV division Xandr the next.
In the meantime, look at what's happening with the audience for linear TV.
These medium age numbers are for the CW — the supposed young broadcast network.
You have to wonder if and when TV gets its targeting act together if there will be any people under 60 worth targeting. According to Protocol, TV providers are on track to lose around five million subscribers in 2020. Cord-cutting is no longer a trickle, it's a COVID-19-fueled flood.
In the meantime, the giant digital video platforms have their sights set on TV, and have the reach numbers to make a great argument. TikTok has 50 million daily US users. Snap: 249 million. Both companies have products designed to let brands pay to be the first ad anybody sees on a given day — letting them come up with big audiences fast, like TV.
Meanwhile the granddaddy of web video, YouTube, has seen a huge spike in connected TV streaming, and the company has created numerous means for advertisers to buy ads just for this big screen audience. Yet according to Digiday, ad buyers view connected TV YouTube as lesser than TV.
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Which may point to the TV ad industry's saving grace: The idea that only "TV," 30-second ads during breaks of pricey sitcoms and dramas, is worthy of TV ads and TV money.
"When brands are looking to take a risk with budgets, they need to make comparisons against other platforms and time periods," said Bryan Wiener, former agency head turned CEO of the ecommerce data platform Profitero. "It's hard for new platforms to break out out of the experimental budgets category until buyers have confidence that they can measure impact successfully. The challenge is that the burden of proof is on the new platform and some platforms like Twitter still haven't broken into mainstream budgets."
And if you want to lean on metrics to make you comfortable, TV has plenty. How many ad executives love repeating nuggets such as "Every episode of 'Judge Judy' reaches more concurrent viewers than all of Instagram Stories at any given time."
"Television has a long-standing measurement framework," said Chris Martin, COO of MightyHive. "It's sort of death by a thousand paper cuts … that is withholding the dam of the budget that wants to move and can't."
For many agencies and brands, "at the end of the day it comes down to muscle memory, along with the value question," he said. And of course, as Martin noted, brands lean on TV-like metrics to provide "a snuggly blanket of comfort."
Which I get. But again, thanks to data, technology, and COVID-19, the large majority of the ad business is leaning hard into becoming performance-driven. Classic TV advertisers will have to break their addiction somehow.
What would really help would be an emergence of some kind of universally-adopted metric that allows brands to easily gauge the audience of different media across multiple platforms and devices.
That's coming, Martin predicted, in three to five years.
In the meantime, I wouldn't hold on to that snuggly blanket for much longer.
This is an opinion column. The thoughts expressed are those of the author(s).
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