Commentary

How To Make Linear TV More Valuable, Not Less

by Debbie Reichig , Op-Ed Contributor, August 11, 2020

It is 2020 and many things in our lives have changed. One thing that hasn't changed much is the upfront.

We are still talking about and making deals in a fairly typical way. Buyers and sellers are still meeting -- if not in person, then through Zoom -- and they are negotiating off many of the same conventional metrics and for schedules that are likely to begin in the fourth quarter of 2020 and end in the third quarter of 2021.

Many reasons have been given, including the difficulty of combining databases to leverage new models and imperfect inventory management. We still need to develop best practices and experimental learnings, and establish incentives for changing and not simply defaulting to what we know best and what we did last year.

While these are somewhat valid explanations, there may be a simpler underlying cause for why the TV ad market is still sold pretty much the way it has been for decades.

Media is transitioning away from a human labor force selling mass audiences for four, or even six quarters in advance, to machine-based selling of digital placements that are built to optimize reach against narrow target audiences in real-time.

While this may seem like an inevitable and business-saving evolution for media and advertisers alike, why do we still have a fairly traditional upfront?

Linear TV still generates significant audience levels and is the focus of many conversations about how we can make it more attractive to advertisers -- and consumers -- so the viewing may be better monetized.

Conference panels and articles talk about lessening clutter, shortening the window for options and becoming more granular with targeting, but there doesn't seem to be as much progress.

While making linear TV sales more like digital may seem inevitable, demand for broadcast and many of the larger cable networks still is high enough to warrant maintaining the current process for a few more years.

Yes, ratings have fallen precipitously, and COVID-19 is quickening the free fall, but advertisers still find that linear TV works -- and is cost-efficient.

Even with the lowest ratings we have ever seen, linear TV is still an important component of a media buy, effectively drawing consumers into the purchase funnel and increasing reach faster than other media.

What we may see happen is the convergence of linear TV with ad-supported streaming services such as Tubi and Pluto. However, it will be a few more years before we see AVOD surpass linear in viewership.

As long as there is enough "mass" viewing to significantly and efficiently impact reach, there will be advertiser demand for traditional linear TV, and media companies will maintain the program supply.

advertising, audience-buying, media buying, metrics, television, upfront

4 comments about "How To Make Linear TV More Valuable, Not Less".

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Ed Papazian from Media Dynamics Inc, August 11, 2020 at 8:36 p.m.
Debbie, aside from the need to solve many of the problems associated with the mechanisms of superior targeting---mainly the use of set usage as a surrogate for viewing---very misleading and seller friendly. The real problem is the almost total indifference of advertiser CMOs to the media planning and TV time buying functions, hence the continuation of the upfront, corporate buying system---which defeats any attempt to improve targeting for individual brands. Underlying this CMO indifference is the belief---never stated, but strongly held---that brand positioning strategies and creative executions are the whole ball game, which means that you should get as many eyeballs as possible at the lowst cost and then the commercial will do the rest---singling out those in the audience who are receptive to the ad message.

Until this attitude is effectively challenged and the upfront is changed---offering two types of upfronts--one for individual brands; the other for corportate buys----media people---researchers, time sellers and buyers are really talking to eachother----not the folks who count---the CMOs. That's where the problem---and the solution--- lays. If the CMOs could be convinced that better targeting---using improved methods---could really make a difference for those brands that would benefit the most, then and only then, they might become intersted---and stir things up.
Reply

Debbie Reichig from In-Focus Media Consulting replied, August 12, 2020 at 11:36 a.m.

Ed,
I wrote this specifically to get CMOs in a room with media to work this out with an actionable plan, because as I mentioned, it would be in the best interest of both sides. They seem to keep talking but not really acting.
I agree that CMOs are a part of the problem. In my dicussions with CMOs over the years, they mostly say all the right things but the message never trickles down to the people running the day-to-day tasks. Additionally, many buyers are still compensated for low cpms and not for meeting KPIs.
There are some workable solutions - we just have to find those that care enough to commit to
agreeing on a plan and then taking action.

Ed Papazian from Media Dynamics Inc, August 12, 2020 at 4:27 p.m.

Debbie, it's going to be very difficult to get CMOs from really influential advertisers---we both know the names----to jump in and actively participate--not delegate the work to their media directors. This requires an organized effort to show a large number of CMOs, individually, how better targeting can increase sales to a greater extent than the higher CPMs that will be required. Trying to do this with an industry committee consisting of sellers, buyers and marketer media types will be extremely difficult as the sellers will not want to sponsor the kind of research that is required, showing the penalties paid for buying time the traditional way---bulk, corporate, low CPM, tonnage deals. As a rsult, everything will get watered down and the CMOs will lose interst.

A better approach would be for a few interested parties---including certain sellers who might fund the needed research---as well as people like you who might present the findings---to make the basic CMO sale pitch, thereby generating the interest---and pressure to rethink the buying system. Once that goal is attained and the advertiser media directors are under orders from on high to really dig into the matter, that's the time for people like us, as well as the sellers---since they and the buyers must execute any new, improved, system----to jump in. Whatever it is it must be fair to both sides, not just advertiser dominated Also, it must be practical to implement with the tools needed being really available---not in the works for far off future application. At this stage, we don't need the CMOs as the process becomes too technical and they simply wont show for such meetings. In other words, I see this as a two step operation---one motivational; the other figuring out how it would actually work.

Debbie Reichig from In-Focus Media Consulting, August 13, 2020 at 9:56 a.m.

Ed, part of my point was exactly that both sides should invest in research that would help sales evolve away from "bulk, low CPM, tonnage deals" - precisely because it would be financially beneficial for both sides. Additionally, there are things the sell side can do, such as experiment to a much greater degree than we have to date, with the clock and the concept of pods. This would slow the drift of viewers to other forms of distribution and also benefit buyers and sellers. I don't think we are far apart in our goals, happy to chat further about structure and execution off-line.