Navigating Advertising Through Seismic Shifts in Everything

In March my column was about the two different modes of entertaining oneself with owneddevicebased screen media longform and shortform I called them quotshow modequot vs quotcuriosity flow modequot because they are psychologically so different In quotshow modequot one decides to make a time investment in watching a story or some sort of other program play out from beginning to end for a half hour hour or longer In quotcuriosity flow modequot one is able to see something new see something else new and keep up the stream of new things to look at as fast as you get tired of the last itemNeuroscientist Carl Marci years ago stated that the brains of young people have become accustomed to getting a jolt of dopamine andor oxytocin from seeing something on a screen and then quickly moving on to something else to get that same jolt which only lasts for the first few seconds of seeing something relatively novel to youNielsenamp8217s Total Audience report shows that the average American adult spends as much time with the web and apps on smartphone and tablet as we spend on television All of that time on the smaller screens hopping around from bit to bit appears to be rubbing off on how we spend our time with television on all devices These new media behaviors seem to be pushing us into becoming a short attention span culture as Neil Postman predictedBecause advertisingsupported streaming services tend to show fewer minutes of ads per hour the total impression count for television is going down However streaming is addressable and so if brands know how to use addressability and validated research methods the power of an impression goes up by more than 100 far more than offsetting the fewer impressionsWe might invent a term here Television Value Units TVUs the average percentage of incremental sales produced per impression and across all impressions There is also DVU for digital RVU for radio and so on TVU is going up as a result of being able to target actual product category purchasers of specific types shown to be responsive to the creative you are currently running And as a result of being able to take advantage of the added boost of psychologically resonant context With addressable forms of television and these additional tools the increase in sales effectiveness on average more than doubles while CPMs do not rise as fast Hence TV still with the most hours of usage of any medium is empowered to increase the edge that it always had over all other media typesStudies by Fox McKinsey Bill Harvey Consulting BHC Standard Media Index IRI Polk and NPD show that YouTube ad investments are correlated with more negative sales results than TV while YouTube has brought forth other studies showing more positive sales results than TV As Iamp8217ve looked at the latter studies what I note is that they are based on brands that are putting very little into YouTube and a lot into TV so that the incremental reach and ROI added by YouTube are real The problem we the group above including BHC saw in our larger data set 22 trillion worth of sales vs 48 billion in advertising was that the brands in our study were putting in much larger amounts of YouTube Itamp8217s all a matter of saturation effect When you add a new media type it always tends to cause a lift in reach and in sales if the creative is working One of the problems faced by all forms of digital is how difficult it is to get more than about a 10 reach no matter how much you spend amp8211 the fragmentation is just so greatSharing with you the latest data we have courtesy of Standard Media Index we see that the growth of linear television and YouTube ad investments among US national advertisers both hit a speed bump in Q2 as part of the general belttightening by marketers unsure of what the future will bring A great opportunity for the wise to keep their ad budgets up while their competitors shrink back and for the wise to optimize the allocation across all media types using all of the superb tools that exist for making advertising work harder most of which are still underutilizedWhere advertising investments are not pausing but still growing at a healthy rate is in the sphere of advertisingsupported streaming type media The digital inventory of the television networks averaging a 30 CPM against adults 1849 including makegoods is up 37 for the first five months of 2022 vs the same period in 2021 The streaming networks spawned by the television networks are up 20 selling at a 26 CPM Facebook digital video up 61 at 5 CPM and YouTube Select up 24 at 18 CPM while YouTube down 6 selling at an 11 CPMBrands and their agencies must make use of the tools and finally make their own historic shift away from lowCPM thinking to highROI thinking and highbrandequity thinking This is not a time to cut back advertising rather it39s time to optimize it with validated research methods The opportunity is enlarged by streaming and all other forms of addressable TV all forms of digital including audio and out of home retail media eCom research advances and by the shrinkback among your competitors Now is the time to do all those visionary things you always wanted to do but no one would let you In all this confusion you be the one who has the answers Stand up speak up leadWhat are television networks to do Although most of the decline in linear ratings is moving over into streaming it isnamp8217t happening 11 As it moves across the great divide it often winds up in a different networkamp8217s audience on the streaming side There is no guarantee that you will catch them on the other side and thatamp8217s where you need to focus more Ondemand AVODs and linear streaming FASTs by being free stand the best chance There is still an urgent unfilled need for effective program discovery tools that transcend the obvious to provide palpable improvement in viewer experienceAudience promotion and acquisition campaigns can be combined in purpose and targeted to exactly the right people most likely to resonate with the content of those spots The networks in general have underinvested in audience promotion When I first got into the business the average new show had an awareness level of 75 Today it has fallen below 30 Why invest millions of dollars in developing a new series then abandon it after six weeks It isnamp8217t necessary to do that if you invest enough in tuneinstreaming acquisition which budgets can be coordinated and some can do double dutyThere are new genres of television programming which you can be the one to invent Why canamp8217t a television network create a streaming channel for user generated content The perfect way to finally use that next tier of talent that has been literally dying while waiting on line to get on your air for years And to do your own talent search And to curate content already out there that you discover and lock up first YouTubeamp8217s 217 share of streaming can be shared among many competitors striving to upgrade the quality of user generated contentAs Irwin Gotlieb said a time of confusion can be a time of opportunityWhat about the big tech companies who have come into the media business in a big way They are all headed for the multiverse Netflix is coming into the advertising business Partnerships between big tech and the traditional television companies is not such a wild idea Polarization has caused the two camps to somewhat freeze their own positions With reality gradually settling in more room for collaboration can be seen Hopefully as below so aboveLocal television is an interesting wild card because of ATSC 30 making broadcast into digital in every way by the end of this decade And because local TV news is as much of a cultural necessity as it has ever been Local sports as well The opportunity to develop original programming locally in an adaptation of user generated content might be in the cards Already Nielsen is finding cases of half of a TV stationamp8217s audience being watched in a streaming news feed in homes that have either antenna or an MVPD they could watch it on And stations are jumping into having their own streaming apps bigtime alreadyThere is a pall of feeling bad seeing the TV numbers going down Thatamp8217s not a useful feeling to have Television is never going to go away itamp8217s just going to continue to morph one set of numbers will always be going down donamp8217t treat it as applying to your own future in the medium Your future is still in your hands and there are plenty of winning hands to playEverything up to now has just been the previewClick the social buttons to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Navigating Advertising Through Seismic Shifts in Everything

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Bill Harvey

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