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Ideas Media planning

How uncertainty will accelerate TV's transformation

Adam Gerber

Early in 2020, our US planning and investment teams were preparing for an upfront TV market that we expected to be - well, pretty much more of the same: predictable ratings erosion, frustratingly high price increases, and not much change to the old way of doing business. The reality of high demand and decreasing supply were going to play out yet once again.

My, how a global pandemic changed things.

Our expectation now? More rapid shifts to new video platforms, a “softer” pricing environment, and recognition that the time has come to change how the deals get done.

Just as everything else in our world has been turned upside-down, so too will the age-old TV upfront. We’ve talked about it for decades. It only took a global economic shutdown to jolt us into action.

The mechanics just don’t make sense anymore. Think about it. So much of our world is real-time, but billions of dollars are committed up to 16 months ahead of time. Increasingly without clarity on what programs we’re buying or what audiences are actually engaged.

Black-swan events. Shortened product-cycles. Globalization. Rapid consumer behavior shifts.

Each raises the risk for marketers when large portions of the marketing budget are “committed.”

Things aren’t going to change overnight. It’s not realistic, nor is it prudent. And a big part of the calculus depends on whether the definition of “video” expands so that dollars chasing attention can find a reasonable home. But it's clear the clock is ticking and we see a five year path to four “big” changes in how Video (aka TV) trades.

Here are the headlines:

Flexibility will be the most sought after hedge.  Standard quarterly options, and how they are managed needs to be completely reworked. As supply has consolidated to just a few big players we need to rework how investment flows through, across and out of supplier’s portfolios. If new models aren’t found quickly, expect increasing amounts of spending to migrate to auction-based media where flexibility is a primary benefit.

Nielsen (probably) will become much less important.  If adserving scales in Video (as it’s starting to do in OTT, CTV, and Addressable MVPD), the combination of census set-top-box/Smart-TV viewing data and ad-specific delivery will revolutionize how we plan, activate and measure performance. Enough said.

Sight, sound and motion will take on a whole new meaning.  A broad set of experiences that deliver attention will qualify as “video that impacts”—traditional long-form programming, but also short-form content, esports, gaming, AR/VR, and whatever else is dreamed up. Think about the screen and everything it can support.

Sports and tent-pole sponsorships will be all that is bought in an annual “upfront”.  Scarcity creates a high value marketplace, and big draws that are watched simultaneously will always have value to mass-marketers. As everything else shifts to on-demand consumption across OTT services, we’ll move to much shorter futures-based buying models.