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Ad buyers at TV’s upfronts can be forgiven for asking: Who are all these people? Storming Manhattan stages beginning May 13 when the networks present their fall slates will be an almost entirely new cast of executives. To differentiate themselves from digital disrupters, they’ll likely pitch the promise of data-driven accountability to clients and a premium content environment that can’t be matched by big tech.
WarnerMedia will hold its first-ever upfront with a “blue carpet” featuring its new AT&T-installed leadership team including Bob Greenblatt. A new, bulked-up Disney — thanks to more than $71.3 billion in assets from 21st Century Fox — will forgo separate presentations for ABC and ESPN and instead combine all of its networks for one event. At a slimmed-down Fox, where Fox News is now the biggest asset, sales has been streamlined under one executive, Marianne Gambelli, who is responsible for selling both Laura Ingraham and The Simpsons. And new Fox Entertainment CEO Charlie Collier, the former AMC executive known for sophisticated cable drama, will be hawking a lineup heavy on sports (Thursday Night Football, World Series) and live events (WWE SmackDown).
But in their quest for the $9 billion to $10 billion in primetime upfront cash, network executives all will once again stress the dominance of TV, the brand safety of premium content and a plethora of proprietary data tools that promise to follow consumers across myriad distribution platforms. Total upfront TV spending is expected to rise slightly (2.5 percent) to $21.25 billion, according to eMarketer, while digital video ad spending is expected to jump 25 percent to $18 billion. But the divide between TV and digital is blurring, and many broadcast executives will work overtime to distance their content from the user-generated variety.
There is, of course, the elephant in the room. With more content and more ways to consume it, live linear viewing is on a steady downward trajectory. At NBC, the No. 1 network in 18-49, live viewing in primetime was down to 29 percent for the first 10 weeks of the 2018 season compared with 41 percent during the same period in 2015. Meanwhile, digital consumption was up to 26 percent from 12 percent. “What we’ve said to advertisers is, start with the content,” says Mark Marshall, president of ad sales and client partnerships at NBCUniversal. “Find the content that works for you and let that lead you to the right platforms.”
Indeed, the main selling point of this platform-agnostic approach is the premium environment afforded by legacy brands. It’s the reason so many buyers a few years ago took money out of digital after initially moving dollars there from TV. Today several network groups are readying direct-to-consumer offerings, setting up a streaming video subscription arms race but also underscoring the enormous head start of legacy content makers. ESPN+ — which launched in April 2018, with very limited ads — earlier this year topped 2 million subscribers. Hulu, which is populated by content from ABC, NBC and WarnerMedia, offers a cheaper membership with ads.
It’s why YouTube announced May 2 that it will be moving its original programming out from behind a subscription paywall and onto its ad-supported platform. With 2 billion active members, YouTube has the broadest reach of any ad-supported streaming service. But it has also been plagued by objectionable user-generated content. Putting its premium content on the ad-supported platform gives buyers a safe environment for their ads.
With so much content across myriad platforms, networks are using the promise of analytics to lure buyers. OpenAP, an automated ad-targeting tool created in 2017 with Turner, Fox and Viacom, is designed to facilitate deals that let advertisers target consumers based on granular characteristics (like new moms or first-time car buyers) — known in the industry parlance as “audience-buying.” In 2018, NBCUniversal joined the consortium (which also includes Spanish-language broadcaster Univision), and this year WarnerMedia pulled out citing evolving needs post-AT&T acquisition. But the group in April announced OpenAP 2.0, which uses cross-publisher analytics for pre-campaign performance projections and post-campaign delivery metrics and allows buyers to purchase linear and other video types across all four network groups.
A+E Precision uses analytics to identify the right ad placement across its portfolio of networks, which include History, Lifetime and Viceland, while A+E Performance measures an ad campaign’s effectiveness. This season, A+E is going so far as to offer performance-based guarantees on some of its upfront inventory; network executives won’t say how much. So instead of just guaranteeing an audience of young, beer-drinking men, for instance, the network will guarantee a certain number of visits to the beer maker’s website.
EDO, an analytics startup founded by Daniel Nadler and actor Edward Norton, measures the real-time impact of TV ads through min-ute-by-minute changes in online searches. The company, which secured $12 million in Series A funding in November, works closely with several big network groups including ESPN, Turner, NBCUniversal, Warner Bros., Lionsgate and Paramount.
“What we’ve found is TV is very powerful as a medium in triggering [purchases],” says EDO chief Kevin Krim. “People get triggered by good advertising to grab a connected device a learn more. And that tends to be through search. What we’ve tried to do is really capture behavioral intent. We basically analyze spikes and create an engagement rate metric. And we help marketers in real time start treating TV as a performance medium.”
So, yes, the quants are firmly established in the media-buying marketplace. But despite all of the new tools flooding the market, most deals are still guaranteed on Nielsen commercial ratings with three to seven days of VOD playback — so-called C3 and C7. And the market still does not have a universally accepted digital measurement on which to guarantee ad buys. (More than 90 percent of delayed viewing still occurs during the first week when a show premieres on a linear platform.) “At the end of the day, we are in a supply-and-demand marketplace,” notes David Campanelli, executive vp at Horizon Media, referring to linear TV. “And supply is declining massively.”
This story first appeared in the May 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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