Marketing

TV’s Unscripted Fall Season

November 16, 2020  |   LiveRamp

It’s a transformative time for the TV business, to say the least. In this episode of our “Saying the Quiet Part Out Loud” podcast, Christine Grammier, the head of buy-side TV at LiveRamp, and Jay Prasad, chief strategy officer for TV at LiveRamp, discuss how the industry needs to adapt to the changing ecosystem and viewership trends. Hear them opine on these changes, as well as delivering relevant and better cross-screen customer experiences while achieving business outcomes.

 

Transcript:

Christine:
We’re excited to jump into this conversation. I’m going to get us started with the baseline state of the industry. There’s so much going on around us, so I’ll talk about it from the buyer side.

Jay:
Perfect.

Christine:
If you think about it from a brand or advertising agency’s perspective, they’re trying to keep up with consumers who are bouncing all around this season. It definitely doesn’t look like last fall or last holiday season. Viewership and the time being spent in CTV and OTT platforms is so much higher than it was last year at this time. We’re starting to see new programs show up and sports are creeping back in. The shift that consumers made into CTV and OTT time seems to be sticking around. So, Jay, how does this play out for the sell side? How are sell-side platforms reacting to this crazy change in consumer behavior?

Jay:
You have to look at the modern media company. Consider TV programming-oriented companies like ViacomCBS, who completed a merger during the pandemonium this year. They are focused on trying to drive scale across all of their linear channels, as well as trying to build up their CTV and streaming platforms.
Then you have the vertically integrated media companies. like Comcast or AT&T, who have television programming, streaming platforms, as well as a traditional cable pay TV service. They’re trying to figure the right balance in terms of how to keep audiences engaged and looking at fragmentation, not as a threat, but as an opportunity. And that of course is affecting things such as production timelines for various TV shows, which is also now something that is in play. Will a new season be 12 to 13 episodes when really all they can do is 5? Do they hold back a new series and try to focus it on streaming? I think they’re trying to look at the data, at advertiser demand, and engagement, and ultimately figure out a new way to manage programming.

Christine:
Okay. I got it. So they’re reacting the best they can.

Jay:
The other area that’s been a bellwether of live TV is sports. You have disrupted seasons, dates that are changing, games that are postponed. Even though live sports coming back was a very big win for the TV networks—and I think advertisers as well—just because you’re now getting at least some opportunities for large reach-oriented viewership, it’s still difficult to understand if consumers are ultimately being consistent.
For example, the opening weekend of the NFL did quite well, but there were certain games in week two, like Monday night football, that did not do that great. The following week, Sunday night football did great, but Monday night football did not. Currently, we’re in the middle of the NBA finals and viewership for the playoffs is down, according to Nielsen ratings. So, a lot of this is making it impossible for them to predict their business, and even though they’re doing their best, they’re going to have another, probably three to four quarters of this type of change ahead. I think that is also playing out in the Upfronts, right? The Upfronts did not really happen in its traditional form this year, and a lot of advertisers, I believe, are rethinking their strategy. Is that how you’re seeing it, Christine, with your clients?

Christine:
For brands and agencies, the desire is there to be back in-market and spending. You can see that investment is coming back, but flexibility is going to be required. So even in the Upfront commitments that they’re making, they’re asking for all kinds of interesting terms. I heard somebody say the other day, “flexibility means something different to every brand.” The investments are being made, they want to partner with the sell side and reach consumers in all these different channels, but there’s a few big challenges I think we’re definitely trying to help brands and agencies navigate. The first one is that there really is no good, consistent metric to help the sell side and the buy side trade all of these new video impressions.
So with the video impressions that are happening in full episode players or in apps on OTT and CTV, it’s hard for the sell side to offer those up to brands and agencies on a similar metric as their linear. So this idea of fluidity and being wherever the consumers are is what brands want, but the darn currency metric, or that consistent metric of measurement, is one of the things standing in the way. We’ve tried to work with partners in some brands and agencies to think about this as a new and different metric, not necessarily to displace the way they’re trading today on linear—where they may be paying for inventory based on Nielsen CPMs or Nielsen impressions—but rather to think about these as new metric.
I have a great example of this analogy. I have a gas-powered Audi and my husband wanted an electric vehicle, but we couldn’t compare miles per gallon between the two cars because it didn’t make sense. We needed a new metric. My husband now has a Tesla, and the new metric we use is dollars per mile, because we know how much it costs us to fill up the gas-powered vehicle, and we know how much it costs us to charge the Tesla.
We’re trying to help power a new metric like this for brands and agencies that are trying to balance all these new video impressions. So that’s one challenge and hopefully one solution that we definitely can try to help.

Jay:
And in order to try to meet that demand, I think the television network side is looking at different metrics, right? I think if you are consistently chasing ratings of the past, it’s a self-defeating prophecy. It’s going to be almost impossible to get back to what it was. I think viewing patterns are permanently changed, so you would call it, “structural,” and I think there’s a lot of things happening when you’re dealing with structural change, and they’re happening pretty quickly. 
So, a widely integrated company like NBC Universal, with cable networks, sports apps, and now the Peacock streaming app, is going to want to look at how much engagement it has,  and not put all of the focus on that one live viewing on linear TV. A property like football might have lots of viewership happening in different ways, and if you’re not counting that as total consumer engagement time, you’re not looking at total potential ad impressions, and it’s going to almost be impossible to meet the kind of new metric that advertisers are wanting to be able to sell against. So how do we make that connection more clear?

Christine:
Yeah, we’re really trying to solve that with every day that goes by. I think the other major problem this creates for brands and agencies is that with these shifts in people who are loyal to linear, where that’s their choice for viewing, the saturation problem in linear is really starting to reveal itself. So this concept that a heavily linear viewer can be absorbing a lot of your impressions is another big challenge I see most of our customers trying to deal with. We ran an analysis across a cross section of brands, and found that of brands still buying in the old way and haven’t necessarily moved to new strategies, almost 75% of their impressions in linear could be going to less than 25% of households.
With this concept of trading and buying across screens, there’s still not really great reach measurement across the screens. So currency was a problem, and now the second problem is the concept of managing this waste. It’s one thing to know it exists, it’s another thing to try to deal with it and pivot. So if you know the waste is out there—you know you’re already delivering impressions into these heavy linear homes—what do you do about it finding solutions to how you bring audience data to your CTV strategies? The first problem was that there just isn’t a common metric across all of these platforms, but the second problem is that there’s really no controls. This reach saturation problem is one that they’re trying to grapple with.

Jay:
Yeah, I think the advancements in the ability to use data is going to be critical. And then, you have to orient the ad-serving systems that are on digital with the linear and addressable trafficking systems. How do they communicate so you are able to look at audiences and that kind of frequency issue? It’s also a difficult task when you are trying to make good on the deals you’ve already struck and you need to be able to turn off ads on a schedule that is  delivering, but not necessarily delivering in an efficient way, and I think that’s what you were saying—if a high percentage of the impressions are going to a much smaller percentage of total households, you’ve got an issue.

Christine:
Yep, those are the big infrastructure challenges. I would say there’s another batch of challenges around training teams. We’re trying to support traditional linear teams that are being forced into this more digital CTV landscape. So, there’s some structural problems, but there’s also a whole bunch of people challenges that we also see. But, I think brands and agencies are up for the task. We are seeing teams breaking old molds and developing some incredibly creative strategies to replace them. It really is each brand and agency team being motivated to find new ways to work.

Christine:
So, now the question is, what does the future bring? These brands and agencies are trying to prepare and pivot. What should they be getting ready for next, Jay?

Jay:
I think we’re going to see a trend that has continued to accelerate, which is the reorientation around streaming. So, rather than streaming being a product that you need to have in-market as a hedge against your current business, it becomes your whole business. It’s the ability to make a more streaming-first strategy around production with programming, and how you’re going to reprogram your streaming platforms to the continued integration of live news and sports. So, rather than hoping that consumers find your app on their smart TV or OTT device, and then toggle back and forth to live TV, they’re going to continue to make it a more all-in-one experience, which will then taking effect on how advertising sales and all of the operations around advertising work.
You’re going to see more portfolio and data-driven sales teams, and I think the disruption to the Upfronts may permanently disrupt the large, deal-oriented sales strategy. While those are still going to happen for the huge tent poles, it’s going to have to shift to a more audience-driven, always-on approach to Upfronts, basically looking at a year-round planning cycle. If agencies and buyers are now more adept at using data and making decisions on how their media is performing, sellers won’t want to wait to get optimization results that may not be favorable to them. They’ll want to try to get out in front of it. So, I think there will be more orientation around streaming and leveraging data, and ultimately, a year-round engagement with key advertisers to ensure that consumers and advertisers are both seeing value from this massive change.

Christine:
Thank you for those insights and predictions on what might be around the corner. I really enjoyed chatting today and I look forward to navigating a future with you.

Jay:
It’s going to be a lot of fun. Each week is going to be different.

 

If you like what you hear, subscribe on Apple, Google, Spotify, or wherever you listen to podcasts.