I don’t believe any other prognosticator has been so consistently right (and uniquely provocative) on the current and future state of the TV ad market than Wieser, the long-time industry analyst who led research for IPG’s Magna Global, equity shop Pivotal Research and WPP’s GroupM during the past 20 years.
Wieser is both a good friend and former colleague. I believe he’s absolutely on target in “The Death of TV Advertising: A Brief History and Future Expectations," a newsletter from his new company, Madison and Wall, published earlier this week,
Like all who care about television advertising, Wieser is very concerned about recent precipitous drops in TV viewership, and audience shifts in the U.S. and elsewhere to streaming viewing. He has never been one of those analysts who believes ad budgets are interchangeable at the parcel level, where small shifts in media consumption time from one platform to another will either suggest or dictate incremental, like-for-like shifts in spend (a la equity analyst legend Mary Meeker).
No, Wieser’s thesis is about how replaceable TV advertising can be versus alternatives in meeting a key marketer objective that no other medium has been able to do: deliver massive, efficient consumer reach with high impact, and do it efficiently, day in and day out. American consumers today may spend more time on digital content than they do on TV, but no digital channel or property can deliver anything close to the daily reach of TV, and do it with sight, sound and motion impact.
If TV loses its predictable efficient reach, then it is only about its content and the value of individual shows. Many of them are great. Sports and prime-time shows stand out. However, more than two-thirds of TV viewing time is not on that type of programming, but everywhere else. If TV’s reach keeps dropping, the economics of TV advertising could very well look like what happened to the music industry when it shifted from albums and CDs to individually downloaded songs. The hits got bought, and the other 10 songs dropped out of sight.
Then there’s the issue of net. People were paying a lot more for the package of the hits and the rest, than the hits could ever generate on their own.
Beware, TV industry: If you only invest in your prime-time shows and sports, you will lose both your ability to uniquely drive massive daily reach, and your ability to price up the entire package of programming and viewing time, not just your hit shows. The total economics will be much lower. But, most importantly, the margins will drop tremendously, because TV companies make a higher profit margin on cheap shows as compared to the tentpole shows like sports and prime-time entertainment.
Brian Wieser is worried about the future of TV advertising. What about you?
Dave, if you mean by "TV" linear TV then of course it has a short term reach issue, mainly with younger adults and, to a lesser extent, with highly educated/affluent adults. But from an advertising point of view--national TV branding advertising, that is----"TV" is no longer only "linear TV", it includes streaming's AVOD and FAST services. These, too, have a reach issue---mainly among older consumers and low brows, but an advertiser who wants mass reach and has the sense to define "TV" as both linear and streaming, has no "TV" no reach problem. Using both platforms as needed you should be able to get not quite universal reach but fairly close to it---in the 80-85% range over the course of two or three months. Of course, I mean "reach" as te "audience" is measured---namely that the ad message was on a consumer's screen---not necessarily that it was watched.
To be sure, there are some adults who are ad-free streaming service-only users plus a small number who are broadband-only and even fewer who do not have a TV set at all. But, here we are probably talking about 15% of the consumer population and many of these are people with anti-advertising mindsets---making them generally less attentive to commercials and less persuadable by them. In short, it may not be worth it to worry about them.
I understand Brian Wieser's position, and the definition of TV is something that needs to, and is constantly is evolving. As I surfed around getting a better understanding of your Mary Meeker reference, I found Jason Manningham of Blockgraph's 2022 "Convergent TV" call to action as something to pay attention to:
People's media consumption habits evolve, and indeed Advertising models continue to evolve, however there has never been a better time to focus on outcomes rather than audience!