• by George Simpson , Featured Contributor, April 2, 2020

With thousands of hours of live sports canceled or postponed due to the COVID-19 crisis, we are seeing one of the great historical disruptions to linear TV advertising.  

Will the brands with presold sports inventory adjust their messages to make them more empathetic to the public health situation?  (Anheuser-Busch has done exactly this, pledging its sports advertising budgets to support blood drives.)  

Will brands instead buy slots in repeats of prior sporting events (which by nature will draw smaller audiences than real-time contests)? Or will they reallocate their budgets in an effort to find sports viewers as they watch programming unrelated to sports?  Interestingly, the latter approach can result in lower cost-per-action.

Having that much ad inventory suddenly go dark on its own would be a unique challenge for buyers and sellers, but it happened just as public health fears rose, the stock market crashed, and millions lost their jobs. Even if we’re not officially in a recession, many agencies, brands and networks have already taken steps to cut costs knowing that consumer spending will shrink.   

For brands, this moment forces some hard decisions. History tells us that sitting back and waiting for the waters to settle can significantly impair long-term growth. Yet spending right now understandably can seem risky. For this reason, many CMOs now aim to preserve the programs that demonstrably deliver results. 

On the other hand, past studies have shown that brands that spend more on building their brand equity tend to fare better and grow their market share coming out of recessions.

Yet marketers seem more focused than ever on performance. Just this week a study by the Advertising Research Foundation showed that "sales," not "brand equity," was by far the top KPI among advertisers both big and small. 

While more than half of big and small advertisers cited sales as the chief metric they use to evaluate the ROI of their advertising and marketing research, the spread is wider between big and small advertisers, with big ones citing the importance of branding metrics like  "equity" and "lift," and smaller advertisers clearly being more performance-driven. than bigger advertisers.

Even before the pandemic, a growing cadre of advertisers and agencies had sought the best of both worlds: TV that delivers immediate and provable results but that doesn’t come with the risks of preemption and iffy brand context that DR offers. 

A financial services company offering a free app initially relied heavily on preemptible (i.e. cancellable) DR inventory to get downloads. Company strategists appreciated the flexibility DR provided and the opportunity to try and buy programs that performed well. However, reliance on DR, while effective when ads aired, couldn’t scale, because access to inventory was not guaranteed. That meant that during some months, the company wasn’t able to buy the spots it needed to hit its business goals.

DR also prioritized day-to-day performance, cutting into the time and resources the company had available to devote to long-term growth. 

The brand turned to a company that uses planning and buying automation to buy more spots that are 100% guaranteed to air on more networks than the client’s previous provider.

The provider also optimized this client’s campaigns every two weeks which enabled the client to shift more of its media budget into more high-performing inventory at a much faster pace. The result: lower costs per download, even as audience reach has increased beyond anything achievable with DR.

It seems to me, then, that the new normal for brands seeking their way through the crisis will be to maximize unique audience reach to grow their brand while prioritizing media spend that delivers performance in the short run.