There’s a growing chorus that “demand” is lower. No, we are not necessarily talking about advertise demand, we are talking more about consumer demand.
For the latter, this isn’t just a slight drip, drip of consumers doing other stuff. This is an eye-opening raging waterfall -- going to streaming platforms/digital video.
Speaking at MediaPost Outfront Forum, John Muszynski, Chief Investment Officer at Publicis Media Exchange, said:
“The supply on the linear side is down tremendously... No one is talking about demand against these vehicles, they are talking about demand in general. This is a bificuated market. We are going to have a very different market for linear than we will for digital.”
He adds: “Look at where linear budgets are: They are not going to be up. [Total media budgets] will be up. But not for linear. If you follow the consumer, there is going to less demand against the linear product.”
Looking more narrowly, he concedes, the problem is the shortfall of linear TV impressions, says Muszynski. However, even considering that, the overriding factor is major consumer behavior changes — rising streaming usage is changing everything.
“You are going to see a big surprise in this marketplace where linear budgets are. They are not going to be up,” he says.
Chiming in was Todd Bernstein, media analyst at Bernstein Research, in a recent report:
“We think scatter CPM premiums of 30%, 40% and 50% (driven by scarcity of impressions across the system) is a very bearish signal. The ROI for advertisers on linear TV has been declining for years as audiences go down and CPM's go up.”
But here is the big change: “That ROI decline is accelerating, and digital inventory is growing -- and demand for digital ads is raging.”
From all viewpoints, the inflection point for media agency and their advertiser clients is when to make big significant changes in upfront buying.
Many say it’s this year. But here’s the rub: Though Nielsen says 25% of TV viewing time is on streaming platforms, only 4% of ad viewing time is on streaming content.
If those numbers are fairly accurate, and unless Netflix, Disney+ and Amazon Prime Video become ad-supported, marketers will need to make some major pivots.
Could YouTube Select, Roku, Amazon Fire TV, Pluto TV, Tubi be key disruptive players -- along with legacy-owned Hulu, Peacock, Paramount+, and the forthcoming HBO Max ad-option?
Place your linear TV upfront bets here -- especially on the total over/under: $18 billion, $21 billion, or maybe $15 billion?