Commentary

Debate Will Shape The Ad Business in 2016

2016 is shaping up to be an interesting year.  If there’s one thing we can all absolutely agree on for next year, it’s that there will be very little to agree on.  2016 will be all about debate and the possibilities the future offers, so it could be an amazing year for our business.

For starters, it’s an election year — which means debate will be the primary focus of all media for the next 12 months.  There’ll be 11 months of arguments and discussion about opposing viewpoints, followed by a month of arguing whether our citizens made the right decision (and inevitably a vocal group will say we didn’t, no matter what the outcome is).  

Political advertising will be the driver of hundreds of millions of dollars in spending, which shapes the business of many digital media formats.  As offshoots of that spend, debate-oriented and/or politically influenced creative will be everywhere.  It will influence the go-to-market messaging for major brands as they tap into the zeitgeist of the moment.  

Political advertising, the Super Bowl and the Summer Olympics means the year will be heavily weighted to seasonal spending, with things ramping up heavily over the summer.  It will be a perfect storm of spending in Q3 — traditionally lighter on ad spend than Q2 or Q4 — leading to massive revenue drivers for digitally based companies.

As I mentioned, this is going to be a year of debate, which is already starting with two seemingly contradictory forecasts.

Recent numbers published by MAGNA Global and ZenithOptimedia point toward a decrease in revenue for linear TV for the first time “outside of a recession,”  from 38% to 34.8% This signals the tipping point many have predicted that will drive TV into an addressable future.  

But CBS is forecasting a 9.5% increase in broadcast ad sales for the upcoming year, which is higher than the estimated 5% stated by PriceWaterhouseCoopers.  Does this mean CBS is more bullish on TV — or does it mean the company is supporting TV with more digital-first approaches and bundling them all under the term “broadcast”?

Reconciling these numbers is important because they are not apples to apples.  One forecast speaks specifically of “linear TV,” while the other numbers point towards total “broadcast ad sales.”

I think the difference is 100% in digital. Digital continues to grow,  delivering more than $160 billion in spend this year, and as much as 13-14% growth forecast for next year.  That 13-14% growth seems to take the decrease in linear and turn it into measurable impact for digital-first companies. 

TV is not dying, but it is changing.  This is powerful because it means companies are shifting the focus of their ad sales towards all-in deals across all channels and devices.  This also means data is more important to them because data enables them to identify their audience regardless of where they are seeing them.  

This leads to the debate about privacy, which will surely be part of the discussions during an election year.  It’s not one that will be front and center; the major discussions will obviously be about terrorism, gun control and the economy.  Still, privacy will be in the background -- and our industry has the opportunity, once again, to drive self-regulation and ensure we take consumer rights into account at every chance possible. I think we do a good job of this already, but ad blocking was a hot topic in 2015 and it looks to remain a topic of conversation in 2016.

As I said at the beginning – this is going to be an interesting year.  Lots of money is at play, and lots of companies will either thrive or not survive.  How they handle this political climate will dictate which side they end up on.  What are you doing to maintain your business growth in 2016?

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