Three Media Trends To Watch In 2022
With COVID cases soaring and companies extending work-from-home plans again, it’s easy to peg the media business outlook for 2022 as more of 2021. That would be a mistake. Three trends lead me to believe that 2022 will offer significant opportunities, and challenges, for the industry.
The first thing I’ve been watching is the advertising outlook. Last week, Wayne Friedman reported that sports betting advertising tripled in the four-month period beginning September 2021. Numbers from iSpot.tv show $175.7 million in national television advertising. Expenditures for the same period in 2020 were $60.3 million. With “just under 20 states with legalized sports gambling” and another 20 states considering legalization, this category is certain to grow in 2022.
Political advertising is also expected to be on the rise this year. A contentious political environment in which both political parties want to increase their elected representation all but guarantees greater spending in areas where the parties see a chance to shore up power. BIA projects $4 billion going to local TV.
In the minus column is the ongoing fragmentation of outlets and audiences. The growth of streaming, connected TV (CTV) and even ongoing DVR usage means that live linear media consumption is the exception, not the rule.
The Association of National Advertisers sees an increase in what it calls “retail media.” These are “ad networks operated by mega retailers such as Amazon, Walmart, CVS, and Walgreens, that offer both digital and in-store ad space.” Lowe’s channel, One Roof Media Network, is looking “to include in-store and event sponsorships, sponsored editorial content, and partnerships with content creators.”
eMarketer estimates 2021 spending at nearly $24 billion, 28% higher than in 2020. More troubling is the group’s 2024 forecast of $54 billion. Additional dollars for these networks are likely to be pulled from other lines in products’ advertising budgets.
One of the selling points for retail networks is their ability to connect tactics with purchase behavior. At the same time Nielsen, the U.S. media industry’s only widely accepted ratings service, continues to shoot itself in its metaphorical foot.
The Media Rating Council (MRC) suspended its accreditation of Nielsen for what the MRC says was the undercounting of local and national television viewing early in the pandemic. Then in December, the service told clients that its announced September 2020 addition of out of home viewers had been undercounting those viewers from the beginning. The Video Advertising Bureau has formed a task to address these problems and NBCUniversal has prepared a request for proposals for new ratings systems.
The question goes beyond the number of people watching/engaged with content. Advertising buyers want to match their messages with likely consumers. Media companies have long struggled with third-party measurement and attribution systems, particularly when it comes to ads served in on-demand and other digital content.
With the major web browser companies ending their support of third-party cookies by the end of 2023, the need for accurate data is urgent. This is underscored by predictions such as those in Zenith’s Advertising Expenditures Forecasts report. That company estimates that the 2021 global ad market rose by 15.6% to $705 billion in the U.S. and will be growing to $873 billion by 2024.
At the same time, Zenith says, “advertising across all digital channels will exceed 60% of global adspend in 2022.” In fact, their forecasters see digital at 61.5% of total advertising expenditures in in 2022, climbing to 65.1% by 2024. Zenith specifically calls out the growth in advanced TV and streaming video to television sets. They say these make online video advertising more impactful. Further, CTV and over-the-top are poised for substantial increases in advertising dollars.
Both Disney (Disney Select) and NBCUniversal (NBCUnified) have announced “clean room” data solutions to help advertisers reach their targets. Clean room software is intended to allow advertisers to match user-level information without actually sharing the underlying raw data with its personally identifiable information (PII). The key is having access to data for a great number of viewers that allows advertisers to target and measure advertising experiences without violating privacy rules and agreements.
Nielsen has also announced a tool that it says combines viewing from its panel data with machine learning to “instantly assign person-level demographics.” The selling point is that this will allow a CTV provider to replace, in real time, a planned ad with one targeted at the specific user, say auto insurance instead of asthma medication. Given the media industry’s loss of faith in Nielsen solutions and competition from other products such as TVision and HypaMetrics, it’s hard to predict widespread 2022 industry adoption.
Regardless of which solution or solutions are ultimately successful, the way advertising is sold and is measured is changing dramatically.
We’ve been hearing about the possibilities for ATSC 3.0 for at least five years. The technology is now up and running in 40 markets. One of its promises is that local TV stations will be able to sell what BIA calls “datacasting” services. The advisory service forecasts incremental revenues for TV stations of around $5 billion by 2027. BIA predicts broadcasters will sell this to businesses that will use it for technologies such as digital signage, connected cars, education and other applications requiring local network connectivity.
With local ad sales increases continuing to slow and cord-cutting potentially affecting future retransmission revenues, it’s clear that local TV must find new revenue streams. NextGen TV could be part of the solution.
Follow The Money
These are three areas I will be watching this year. If there are others you think will have the potential to affect the media industry in 2022, let me know in the comments.
While generally associated with dirty deals and political shenanigans, the famous quote from All the President’s Men — “follow the money” — should be operating instructions for all media companies in 2022. Look to where advertisers and the big players are investing and you will see the opportunities. Conversely, if the investments are drying up, there are challenges ahead.
Happy New Year!
Former president and CEO of the Media Financial Management Association and its BCCA subsidiary, Mary M. Collins is a change agent, entrepreneur and senior management executive. She can be reached at [email protected].