During Upfront Week, marketers and media buyers faced a radically changed media landscape.
With new ways of buying television, advancements in measurement and the proliferation of digital video, we are seeing a new age of television. Much of these advancements are a result of fundamental changes in how viewers are consuming television.
What is the cause of this new age? We see three key factors driving this new era of television:
- We Are Entering the Era of “TV Everywhere”
Streaming digital video on TV has become a daily habit. Nearly half (46%) of streaming-enabled TV owners did so daily in 2017, a significant increase from 32% in 2015. In 2017, the preference for TV watching per device was: 47% TV; 13% smartphone; and 40% desktop/laptop. 31% of Internet users polled in November named a streaming service such as Netflix or Hulu as their primary method of consuming video content (Raymond James survey, December 2017). That was up from just 24% about a year ago.
- A Rough Road Ahead for Linear TV
Although live TV viewing remains a dominant daily behavior, its momentum is slowing down with a net negative over the last two years. Among all adults in 2017, less than half (46%) of the time spent watching TV was spent on linear programming, which must be watched at the scheduled time and can’t be fast-forwarded.
A differentiator for television has been the ability to watch live sporting events. However, as the television audience continued to shrink over the last few years, the NFL looked to new opportunities to monetize its product. It turned to digital to assist in viewership reach. Specifically, for NFL “Thursday Night Football” over the last few years, Twitter paid $10MM for digital streaming rights (2016 season) and Amazon paid $50MM for digital streaming rights (2017 season).
While the audience the NFL reached online is a small fraction of what the League can get on linear television, Twitter, Amazon, YouTube and Verizon are currently in a bidding war for rights for the upcoming seasons. With their deep pockets and growing consumer base, they pose a real threat to linear TV.
- The Various Buying Opportunities Within the TV Landscape
There’s no need, however, for marketers and media buyers to cower from threats resulting from “TV Everywhere.” There are various buying opportunities to explore, including:
- Linear TV – Marketers use the traditional buying method of inserting a commercial during programming breaks. Ads are negotiated with the networks, and advertisements run across their geographical footprint. This comes with some challenges, such as minimal targeting options (age and gender, program) and limited measurement capabilities (GRPs).
- Programmatic TV –This relies on technology-automated and data-driven buying, where inventory and audience delivery is in addition to linear TV systems. Challenges include inventory constraints (networks lack of adoption), platform limitations and lack of transparency.
- Connected TV – This year, eMarketer estimates that 181.5 million people in the U.S. will use connected TVs at least once per month—a number that amounts to just over 55% of the general population. So, this is a good method to reach users of any TV that can be connected to the Internet and access web-provided content, such as Smart TV apps or over-the-top streaming devices. Inventory is purchased through full episode players and delivered via streaming platforms (i.e., Roku, Apple TV). However, there is a lack of user segmentation, measurement. and scale with this method.
- Addressable TV – In this evolving method, ads are inserted at the household level through set-top boxes that target individual households. This method allows for application of first- and/or third-party data. A challenge with this buying technique is that coverage is limited to the footprint of addressable providers.
To face this changed media landscape head-on, marketers and media buyers must enter Upfront Week with a different mindset, one that embraces new technology and new opportunities.