An advertiser’s guide to the upfronts: 5 trends changing how TV is planned, bought & sold
A shift from the ‘cord-cutting’ narrative, an eye on the dreaded ‘reach plateau’ and the increasing importance of data clean rooms: Ampersand’s Andrew Ward spells out the biggest dynamics shaping media planning, buying and selling in TV and premium video today.
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TV upfronts continue to play an important role in the advertising marketplace, allowing brands to drive market share by securing the best TV programming and ad placements at competitive prices.
Although many have debated the demise of the upfront construct, I think these discussions miss the more important dynamics in the TV advertising business. The reality is that the intersection of content and technology is changing how, where and when viewers access their favorite TV content – as well as increasing the data, targeting and measurement solutions available to marketers.
In essence, we’re witnessing a reshaping of how TV advertising is planned, bought and measured.
Advertisers and agencies need to understand these changes as they head into this year’s TV upfronts, so they can drive the greatest efficiency and effectiveness across their media investments.
1. Incremental reach is a need-to-have, not a nice-to-have
Television is unrivaled in its ability to engage audiences and build scaled reach quickly. The inherent challenge in TV’s ability to drive reach is the inevitable reach plateau that occurs nearly as quickly. Virtually all national network TV schedules behave in this manner: quick reach, followed by a quick plateau.
Advertisers have tried addressing the plateau problem by pouring more dollars into network TV budgets. Unfortunately, this practice doesn’t drive incremental reach but results in excessive frequency. When national campaign viewership data is analyzed against the heavy TV viewer, the wear-out of wasted frequency becomes even more dramatic.
Simultaneous to this over-delivery dynamic, TV viewing data also identifies a significant portion of the target audience that is unexposed or underexposed to national TV schedules. Today, buyers can complement a marketer’s national TV campaign with a concurrent addressable campaign, to flatten excessive over-delivery and build effective reach against unexposed and underexposed audiences. I do not believe it is hyperbole to say that every network TV schedule should be accompanied by a companion addressable schedule driving incremental reach and delivering to the non-heavy TV viewer.
2. Leveraging addressable TV is a must for improved media efficiency and brand outcomes
Traditionally, buyers have planned their TV campaigns, national and local, based on broad age and gender demographics, and related CPP and CPM currencies.
While the TV marketplace continues to leverage its unique value proposition of premium content, it is now taking a page out of the digital playbook with the introduction of rich audience data, precise, addressable multi-screen delivery and robust campaign measurement.
One of the challenges I see is the attempted application of legacy network TV business practices to emerging TV models. I hear from TV buyers that addressable TV is too expensive relative to existing TV investments that are planned and bought on the legacy construct of age and gender. TV can deliver to an audience aged 25-54 very efficiently. However, if the brand’s true target audience is more narrowly defined by richer first- or third-party data, then the effective CPM of that specific audience delivery needs to be the consistent measure driving investment decisions.
Through this lens, addressable campaigns become TV’s most efficient vehicle. However, brands shouldn’t be satisfied solely with these media delivery metrics. Addressable TV can measure brand performance beyond just reach and frequency, whether those brand metrics are top-of-the-funnel (like awareness and intent), mid-funnel (like driving online engagement) or bottom-of-the-funnel (such as sales, conversion or repeat). Addressable TV campaigns link aggregated viewership insights to brand outcomes and, in so doing, provide a level of accountability previously unavailable in the TV marketplace.
So, as marketers think about the efficiency of their TV spend, it’s important they do so through the lens of audience delivery, not simply demographic delivery. They must, at the same time, map brand outcomes to measure TV’s effectiveness.
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3. People aren’t cord-cutters, they’re cord-switchers
We think of television as professionally-produced, full-episode, brand-safe content – not as the device on which that content is viewed. TV’s premium content is its greatest value proposition. And, by any measure – whether it be the total number of TV homes, or time spent with TV content – the channel’s value in building brands has never been stronger.
Yet, ‘cord-cutting’ is floated as a testament to TV’s eroding value. This narrative is a red herring. The impact of cord-cutting is negligible.
The relevant metric is cord-switching. Whether a consumer chooses to access TV programming in their home via a set-top box, satellite dish or a broadband-only connection, they are very much counted as a television household.
So, when we look at all the various ways people access TV content, the TV universe is not declining as some narratives would lead us to believe. It’s about ‘and’ – not ‘or.’ All TV schedules – national and local – need to integrate linear and streaming environments to realize the full brand-building power of multiscreen TV.
4. The intersection of data and technology: now playing
One thing is clear: as data and technology come together to modernize the television planning and buying process, there will be a move away from monolithic measurement supported by probabilistic panels, surveys and cookies.
In its place will be a migration toward a modern construct for TV campaign planning and measurement rooted in more definitive, audience-first insights. Legacy companies will evolve to support this dynamic, and new companies are emerging in this space.
The expansion of data enables marketers to make more informed TV investments. The days of a single measurement company, and a single measure of performance, are gone for good. We urge brands and agencies to embrace this evolution by leaning into data and measurement companies to create a learning agenda that drives campaign insights as well as improves the efficiency and effectiveness of future TV investments.
5. Clean rooms: a clean next step for brands with first-party data
The concept of the data clean room was designed for marketers with first-party data and builds on TV’s evolution from probabilistic to more definitive data as a means to support campaign planning and buying.
Marketers seek to leverage the full power of TV by intelligently deploying investments across network, spot, addressable and multiscreen environments and need to use audience data to inform these investment decisions.
But there are two common concerns I hear from chief marketing officers: first, trying to understand what portion of their target audience is under-exposed or over-exposed to their combined TV spend; and secondly, what portions of their TV spend are having the greatest – or least – impact in driving brand outcomes. Clean rooms are designed to answer these questions, and we urge brands with first-party data to lean into this opportunity. We believe brands that lean into this space will drive first-mover advantage and competitive separation.
Andrew Ward is president of Ampersand.