Week In Review: The Upfront Recap, Off Screen Drama Heats Up At CBS and Fox
1. The Upfront Recap
There were two big themes from this year’s upfronts: fewer ads overall and dynamic ad insertion for the ones that run. (And multitouch attribution to prove yet again that it all really works.)
Neither is a new idea, but this is the first time the networks are speaking their names out loud.
Why It Matters
Everything in this business is baby steps right now. So while we’re tempted to roll our eyes when NBCU’s Linda Yaccarino talks about cutting prime time ad loads by 10% (from 13 minutes/hour to 12 minutes/hour, as if anyone would actually notice that), the truth is, they’ve got to start somewhere. And, more importantly, they’ve got to get advertisers on board with the amount of money they are planning on charging for those new and improved reduced ad loads and that's not going to be easy—right now there’s a pretty wide gulf between the two parties, with networks waving around some high prices and advertisers giving them the old “as if!!”
So there’s that.
Fox’s JAZ (just A to Z) which limits certain ad blocks to just two spots is a definite step in the right direction as it addresses the obvious concern of “why would I want to be in the middle of a block of six ads” (other than “to be on TV at all costs” that is. Which is sadly the actual answer for many brands.) Still, given how much people dislike watching long ad blocks—especially now that they’ve gotten used to ad-free Netflix—you’d think that being one of only two advertisers would logically seem quite valuable. But advertising is not a very logical business and even with multitouch attribution—another feature many networks were touting this year—it seems that it’s hard for advertisers not to feel as if they’re getting ripped off.
And then let’s address the other elephant in that room: Pharma ads. In addition to their moral dubiousness, they are 60 seconds of forcing people to think about death and dying which drags down the entire commercial-viewing experience and reinforces just how painful it's become. To the point where we sort of suspect that a network that eliminated Pharma ads from certain blocks could probably charge a premium as well.
Something to think about.
We addressed DAI last week and the different ways networks can make it happen. (Via MVPDs and via ACR vendors like Gracenote, ICYMI.) Here again, we’re looking at baby steps, experimental programs that allow the networks and advertisers to get their feet wet without having to actually dive into the deep end of the pool. (Extended metaphors are fun!)
What You Need To Do About It
If you’re an advertiser, you need to evaluate just how much exclusivity is worth to you. Or semi-exclusivity. Especially at a time when viewers are used to watching channels with no ads on them. And blocking them online. Remember that there are use cases—Hulu and CBS All Access being two—where viewers find limited ad loads to be tolerable, and then some, and someday soon hopefully someone will do a study of just what that perfect balance is--how many ads can you have until you reach the tipping point, and how much more effective are those pre-tipping point ads.
Until then, maybe just take it on faith.
If you’re a network, don’t gouge your advertisers. If those shorter breaks are indeed worth more money because people actually watch and remember them better, your advertisers will figure it out soon enough. Give them a little time to adjust.
Networks should also continue to look at ways to make addressable ads and dynamic ad insertion happen—start with experiments and move on from there. vMVPDs and ACR vendors are good places to start but the more you can target ads or things that don't look like ads but are, the happier your viewers will be.
2. Off Screen Drama Heats Up At CBS and Fox
While critics may be divided on the current season of Westworld, everyone seems to agree that some of the best drama is happening around the industry’s attempted mergers and acquisitions. Comcast is launching an all out (and all-cash) blitz to woo Fox back from Disney and CBS basically told Shari Redstone that Viacom is a loser network that they’re too cool to hang out with.
Or something to that effect.
Why It Matters
At some point the major TV networks and MVPDs will have to band together in some way, shape, or form or else they’ll be overrun by the digital invaders. Because banding together is how you stop invaders. What those combinations eventually look like will determine who wins and who loses, but damn, there sure are a lot of egos involved.
To wit: logically, Comcast should strike a deal with Disney so that they launch Hulu together in Europe via Sky and use it as a way to bring Disney, Fox and NBCU content to Europe, India and beyond. (Those three companies currently own 90% of Hulu.) But that would mean their various CEOs would need to put ego aside and that’s not likely to happen.
It's the sort of gamesmanship that makes for poor strategic decisions, but great headlines as these giant media companies careen from one cliffhanger to the next.
Should make for an interesting summer.
What You Need To Do About It
If you’re a CEO, try and put your ego aside and do what’s best for your company. And if that’s not possible, then at least don’t hold grudges when you lose.
If you’re an advertiser, don’t lose faith: the networks and MVPDs will get their act together soon enough and all those reasons why you’re advertising with them will still be valid. And there are no brand safety issues. At least not the kind you get with digital.
