Commentary

Determining The Value Of Legacy TV Versus Digital

by Wayne Friedman , Staff Writer, October 25, 2019

Legacy TV companies might be pushing more advertising to newer D2C (direct-to-consumer) sites from linear TV networks.

But what will that look like? Will marketers be happier? And what about those bad actors.

In a MediaPost Agency Daily story about the vying for Walt Disney’s big media account, a $2.2 billion piece of media business, the potential move focused on something called a “share shift” -- asking whether prospectus agencies may encourage a shift in moving some of their clients money to Disney TV networks.

Sounds crazy?

Surely, media agency clients hearing this might have the hair on the back of their necks stand on end. At the same time, media agency executives told TV Watch this would mean any such agreement would also include a firm caveat: Would it meet clients' media campaign parameters and needs?

For the record, Disney representatives did not respond to inquiries by press time from TV Watch. The resulting winning media agencies: OMD USA and Publicis USA.

Digging deeper, traditional TV network advertising executives have long said their platforms are undervalued -- especially in light of digital media’s issues with brand safety and transparency.

The problem remains: What is the exact value of traditional TV these days? Where is the data specifically supporting marketers' efforts about what they can get from digital media platforms? For many advanced advertising efforts -- addressable, audience-targeted, automated and otherwise -- this continues to be the goal.

Now, traditional TV owners have a different issue: The move to digital OTT services -- including the subset of connected TV -- pushing content operators to rethink how to sell new digital advertising. This comes as new D2C platforms -- possibly some ad-supported from NBCUniversal, WarnerMedia, as well as existing platforms, such as Hulu, CBS All Access -- continue to grow and/or start up.

But some unsettling stuff seems to be brewing -- that 22% of the programmatic ad delivery on OTT (over-the-top) and CTV (connected TV) today is fraudulent, according to Pixalate.

Legacy TV ad sellers have long talked about brand safety of TV networks/stations. But as they now boost their exposure in the digital fray, can traditional TV advertising selling executives navigate a new tricky path full of potential bad actors?

advertising, tv

5 comments about "Determining The Value Of Legacy TV Versus Digital".

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Patrick Stasolla from Universal Media Inc., October 25, 2019 at 3:05 p.m.
I believe the proof is in the pudding with regard to the valuation of "traditional" television for advertising effectiveness. Just ask any major or consistent TV advertiser, what happens when they turn off the TV spigot? Answer...sales erode fairly quickly. Then ask them, what happens when Digital Platforms or non-traditional TV are turned on or off? Answer...unfortunately very little, unless that marketer relies exclusively on a Digital transaction for revenue. CPG, Pharma, Most Retailers, Automotive, Insurance, Telcom, Travel and Politics all rely on "Traditional" TV to get their messages across to the mass market.

Traditional TV is certainly evolving and rightly so, but it is neither dead or insignificant to today's marketers.

...my $0.02
Reply

John Grono from GAP Research, October 25, 2019 at 5:31 p.m.

Well put Patrick.

Gary milner from The Simpler Way, October 25, 2019 at 6:21 p.m.

My understanding is that 10per cent max of ott is programmatic, most is direct sold. Therefore the fraud on programmatic tv is 22 per cent of 10 per cent . Less than 2?

John Grono from GAP Research replied, October 25, 2019 at 6:56 p.m.

So the only programmatic fraud is in OTT?

Patrick Stasolla from Universal Media Inc., October 25, 2019 at 10:44 p.m.

Unfortunately, fraudulent transactions occur far too often among all of the different digital platforms and this creates a constant veil of mistrust among advertisers. I do believe the primary objective of the article was to question whether or not Traditional Broadcast/Cable/Satellite Television was medias valued a platform...I believe it still is. I am not suggesting Digital Media is not valuable, but it certainly plays a different role and that is reflected in pricing metrics and subsequent CPMs marketers are will to pay.

Bad actors will always exist, as they are part of society's ecosystem. Part of the job of a good Media pro is being a diligent steward for clients, which includes avoiding bad deals and mitigating fraud as best we can.