The lines are finally blurring between NewFronts and upfronts. From Hulu’s new ad format targeted at binge watchers to YouTube’s move to make its original content free and ad-supported to Xandr’s new marketplace for premium video, this year’s presentations show that the convergence of digital is upon us.
Advertisers are grappling with the challenge of balancing depleting audiences on linear TV with the increasing cost driven by less supply and the abundance of non-traditional streaming consumption. They will need to rethink their video strategies by individually evaluating the value they continue to place on large upfront linear buys and audience-first programmatic buys. But with the lines between linear TV and digital fading, how can brands effectively approach video in the new digital TV environment?
Advertisers have historically aimed for different takeaways from the two events. Traditionally, NewFronts has catered to the audience-first targeting approach and measurability of digital mediums while Upfronts has focused on specific programming and establishing value in the content they are pitching. The content of both events is converging today, with Facebook looking for upfront commitments and WarnerMedia addressing targeting and measurability via Xandr this year. This trend will only continue as addressable TV drives linear TV into a programmatic buying landscape.
Buyers will need to look past the lines of how they buy and focus on who they are tasked with reaching. While linear TV is clawing to maintain their upfront sales strategy, digital pure-plays like Hulu and YouTube are desperately looking to partake in this model while addressing the changing dynamic of video viewership.
This presents an issue where buyers looking to move to an agile audience-first approach are reluctant to commit upfront spend, as the audience they are looking to target may not be available tomorrow where they are today. Additionally, they’re also balancing the fact that linear inventory may be snatched up without an upfront commitment. The fear of losing linear inventory may set the pace for true linear and digital TV convergence.
Beware of the bundle
Advertisers are being incentivized to sign major upfronts linear deals with the addition of a network’s digital video inventory to help offset linear audience declines. But buyers should beware of the bundle. This places them in a situation where they’re forced to value two different offerings as one, which potentially inflates the value of linear and deflates the value of digital viewership as the measurement mechanisms still play in the favor of linear. Devaluing digital viewership will have long-lasting negative impact on the industry as the transition away from linear is clear and the tipping point is in our near future, even if budgets don’t reflect that truth.
While Hulu and YouTube are the pure-play darlings of the digital viewership space, the competition is expanding. Facebook crashed this year’s upfronts, taking a show-centric approach to directly counter YouTube’s (Google Preferred) cable-like bundle of live channels. Meanwhile, Amazon is out shopping their premium inventory. Buyers should be asking how they can infuse these pure-play strategies with an existing linear commitment for ultimate success.
Consider viewership and targeting differences
Analyzing digital viewership versus linear viewership requires different approaches from advertisers. The way individuals consume video today is incredibly distinct, with viewers fragmented across cord-cutters, cord-shavers and the growing trend of cord-nevers. With so many different options for content consumption in the marketplace, advertisers need to have a nuanced understanding of viewership trends, frequency across the video ecosystem and the existence of targeting efficiencies that are different across linear, addressable and connected TV.
How can advertisers balance the limited targeting options of traditional linear with the sophisticated approach of programmatic, and how can they measure the incremental lift this brings without inundating target audiences with their messaging?
Prior to the streaming viewership revolution, linear TV was an appointment-based experience. Content today is accessible to your target audience on a 24/7 basis, and how they choose to consume that content is vastly different. There is no one-size-fits-all targeting approach across video anymore. Advertisers should be thinking about how they can deliver more meaningful messages to an individual as they consume several episodes of a show in a binge-watching session instead of delivering the same ad four times and negatively impacting the user experience.
Looking ahead to 2020, buyers should expect that they will no longer be able to tackle the NewFronts and upfronts individually. They will need to take a holistic approach to balancing linear TV with digital viewership as the lines between the two blur completely.