Will Social Media's Snap Woes Become TV's Troubles?

TV-centric platforms may be pondering the recent news from social-media platform Snap. Might they also snap as a result?

For Snap, the sharp drop in its stock price is not just a result of Apple's privacy changes to its latest iOS, which severely narrows the visibility of marketers' effectiveness. More broadly, its growing supply-chain issuesare giving marketers pause when it comes to all platforms.

Hello, TV networks. You probably have supply-chain issues with regard to your clients, too.

More recently, TV networks have been basking in the glow of a resurgent TV upfront marketplace, just completed this past summer.

Still, the “normal” TV advertising market -- full of double-digit price increases, on the cost-per-thousand viewers -- may not really be back to normal. Consider that this is the fourth-quarter period we are talking about -- a big consumer activity-buying time where marketers pin a lot of hopes and expectations.



TV networks don’t usually see much volatility, given the media-buying deal conditions made in the most recent May/June upfront period. Those deals include media campaigns for the fourth quarter, where, typically, no cancellations/changes are allowed. (That said, we know increasingly marketers want much more flexibility for all the media they plan and buy -- including TV.)

Looking at the recent Standard Media Index data, we see September advertising up 10% versus the same month in 2020 -- still in the depth of the pandemic. So that looks good. But the chart since May has seen increases trending down -- from a high of 55%.

Snap also noted that the shortage of labor is adding to its hard miss on revenues.

It isn’t just hitting Snap. Stock prices of other digital media heavyweights -- Facebook, Twitter, Google, etc. -- were affected. All this results in expected lower advertising revenue.

If these digital media giants are driving the market, what then becomes of those media platforms that follow?

If major digital ad revenue caves -- down from its usual double-digital increases, even during parts of the pandemic period -- where are TV ad trends headed?

Next story loading loading..