What’s Going On?

Most of us would never have thought that the Twilight Zone could seem so relatable. Until this year.

The year 2020 will go down in history for a number of reasons. The coronavirus pandemic is affecting more than just the health of people across the world. It’s affecting their daily routines, preferences, and behaviors—including their media usage. Different sectors and verticals have been affected in different ways. To say the advertising industry has been turned on its head would be an understatement.  

Remember when the death of third-party cookies was one of the biggest concerns in the industry? So much has changed since the COVID-19 outbreak just a few months ago. Meetings have been cancelled, media plans have been reconfigured or put on hold, and millions of dollars of ad budgets have shifted. In fact, the entire way in which the industry conducts business is being completely remodeled during this strange, exhausting, and unprecedented time.

 

Wins & Losses

Stay-at-home orders caused by the pandemic, have affected the daily lives of both consumers and businesses. In the last five months, we’ve experienced the rise of video calls driven by homebound consumers looking to keep in touch with friends and family. As a result of the widespread shutdowns of brick-and-mortar businesses and fear of infection caused by the pandemic, ecommerce has been a bright spot among retail channels, seeing consumers becoming increasingly reliant on digital transactions. Verticals like travel, retail, and QSR/restaurants were catapulted into a rapid pivot in operations to stay afloat in response to the ongoing decline of in-person interactions.

At the beginning of the pandemic, media served as a lifeline to the outside world. While consumers shifted their usual media behaviors in search of entertainment during quarantine, advertisers, agencies, and publishers, have embarked on a new quest to reach them. The pandemic has accelerated cord-cutting and shifted viewing to streaming platforms. Consumers are increasingly canceling their cable TV packages during the pandemic because sports—the livelihood of linear TV, has all but disappeared. With less people commuting to work, podcast listening has experienced a decline while consumers starved for sports have migrated to esports. The rapid change in media consumption has caused a significant ripple in the advertising landscape.

 

“Please Stand By For Your Regularly Scheduled Programming”

The production of TV shows and movies came to a screeching halt in March following the COVID-19 outbreak. The traditional theatrical release window has changed. Studios have pushed back planned theatrical releases.

Consumers can now watch new films from their own home for a one-time fee and they no longer have to wait 90 days after a film’s theatrical release to catch it on a streaming service. One bright spot amongst all these delays has been the animation sector, which is expected to thrive due to the ease of animators working from home. Some brands have followed the trends of Hollywood’s work from home production by relying on repurposed footage and cobbling together at-home footage from actor’s remote locations. 

 

 

Agile is The New Black

The month of May traditionally marks the beginning of TV upfronts, when broadcast and cable networks showcase the new shows scheduled to launch in the fall as they negotiate with marketers to sell a majority of their annual ad inventory. The alternative to ads bought “up front” are higher-priced, “scatter” spots landed closer to airtime. Instead of the usual song and dance, networks were forced to cancel these star-studded, high-budget spectaculars.

The TV upfronts hit a rocky road this year, leaving many to question what they will look like in the future. The traditional planning cycle has been broken. The programming calendar has been wiped clean, leaving no tentpole events, including award shows and major sporting events, which typically bring in a sizable investment. Production stoppages are preventing broadcasters from completing their full show lineups, leaving them with no finished product to sell, and advertisers are holding off on making any long-term commitments given the uncertainty around the pandemic and economy. 

About one-third of the roughly $65b in annual TV ad spending occurs during the upfront, which many advertisers regard as a process long overdue for a revamp. From 60-day deal lock-ins to rigid quarterly optionality, traditional deal structures are being examined along with technology for smarter planning and buying. In the short term, a return to normal TV ad spend looks unlikely because of the delayed upfronts, lack of certainty regarding production of new content, and recession-fueled budget(cuts). Now more than ever, flexibility is needed as upfront negotiations are delayed or stalled for many buyers and sellers. When advertisers do return, they’re expected to shift further from traditional TV advertising to digital formats, where ads can be more targeted, and their impact can be better measured. 

Before the pandemic, in-person events and meetings were a pivotal touchpoint for media sellers. Med have had to be extra innovative with their efforts to keep attendance strong and attendees engaged. COVID-19 has put pressure on budgets and advertisers are figuring out how to realign their media strategies. Moving forward, enabling buyers and sellers to commit to more flexible terms with confidence will be a significant trend. Ultimately, this “new normal” will allow for a whole new form of brand storytelling.

 

A Brief History of the TV Upfront

In-person engagement has long been a key element in the marketing mix. The history of the upfront goes back to the early days of TV advertising in the 1950s. Historically, the fall television schedule was created to help auto advertisers promote their new car models. In 1962, ABC altered the advertising landscape: by shifting its entire programming lineup, setting its premieres for a single week in the fall. In doing so, ABC not only invented the broadcast TV season as we know it, but also ushered in the era of the modern upfront.

Five years later, ABC triggered another seismic event when it became the first network to offer ratings guarantees. For the first time, a network would place an insurance policy on its deliveries. On the one hand, if a client placed a big bet on a sleeper show and it became a hit, it automatically locked in the original rate even as those who took a pass on the show were obliged to pay a stark premium.

As cable TV shifted from old broadcast reruns and uncut movies to more original programming in the 1990s, networks like Turner and Discovery began holding similar presentations for upcoming programs, despite the fact that most channels didn’t stick to the fall season. Eventually, TV upfronts led the way for advertisers to have larger partnerships with networks based on broadcast content: while the :30 and :60 spot continued to rule the negotiations through 2019, additional inventory opportunities were packaged to support consumers multi-screen engagements, which included all things digital.

Which makes it no surprise that the Interactive Advertising Bureau (IAB) debuted the Digital Content NewFronts, an event to showcase original video content from the Internet, in 2008. Since then, the digital advertising landscape has been growing at a double-digit rate (excluding this year) and will reach $163b by 2021. The NewFronts typically draw thousands of people to presentations in New York City. This year’s edition moved online in June. Given the current state of the media landscape, 72% of media buyers say NewFronts are more important than ever, according to a recent IAB survey. Close to 50% would like to see them merged with upfronts, with many respondents pointing to the value of enhanced cross-screen research and measurement and the potential to boost performance.

 

A Domino Effect

Though a particularly hard hit for traditional, the COVID-19 impact has been felt across all media. While the linear schedule has guided the broadcast planning season, so too has it afforded networks multi-channel spend commitments locking in inventory across digital channels. Big advertisers normally would use upfronts to invest in networks, including their digital offerings. The significant slice of ad budgets that traditional usually earns also affects commitments on other types of media as well. With a major event such as the Super Bowl, for example, advertisers want to maximize their reach by targeting sports fans across multiple media channels to take full advantage of the hype. The absence of major programming opportunities is creating a growing build-up in demand, which, once production resumes, will result in a very chaotic buying and planning process—many hands trying to get in the pot.

 

What Comes Next? Harder, Better, Faster, Stronger.

We may never experience a disruption of this magnitude for the rest of our lives. So much has changed in such a short amount of time, and this is only the beginning. While the uncertainty of what exactly the future holds may seem unnerving, this is the golden opportunity for the ad industry to get a much-needed makeover.

The only constant in life (especially marketing) is change. How can you create a plan that is flexible and agile enough to adjust to a buying environment that seems far from predictable? Marketers are working to stabilize their operations by becoming radically efficient with time, resources, and budget, while simultaneously planning for future growth and transformation. Anyone who works in the digital space knows that technology is constantly evolving. Products and services need to be continuously updated and improved to meet marketplace expectations and client demands.

As the pandemic-induced recession puts additional pressure on most companies’ operating expenses, more than two-thirds (69%) of U.S. organizations have partially or completely moved their programmatic operations in-house, according to a new report from the Interactive Advertising Bureau (IAB). In-housing programmatic operations lets brands have more control over their campaigns and gives them greater transparency into how their spending is managed—advantages that have become higher priority during a recession.

When asked about the top objectives driving in-housing initiatives, 43% of U.S. companies surveyed said “cost-efficiency,” and 42% said “campaign effectiveness.” A shift toward in-housing will likely drive increased demand for ad tech providers that can help manage programmatic campaigns. As companies move away from using agency-based trading desks and build out their own teams, expect companies to build new contractual relationships with ad tech providers—whether they’re demand-side platforms (DSPs), verification services or other groups that can assist with the transition.

We see it in nature, all living things adapt and evolve in order to survive. The ad industry is no different. Given the shift in priorities following the onset of COVID-19, the digital ad landscape will see an increased focus on flexibility, agility, innovation, and automation. Almost three quarters (73%) of CMOs expect the pandemic’s negative impact to be short-lived. CMOs now rank brand strategy as their top strategic priority (33%), for the year ahead, followed by market analytics (29%), and marketing operations (28%) – a significant leap from its position near the bottom of the list in the 2019 survey.

 

Looking Forward

Like a game of Boggle, the year 2020 took industry rules, schedules, and expectations and jumbled everything that was in place. 2020 will be the beginning of the “new normal” – what that exactly entails, the world is still figuring out. Digital Remedy is making the necessary moves, including more personalized offerings, more strategic insights, and more competitive resources, to provide our clients with what they need to succeed in the new digital advertising frontier. We welcome shifts in media usage. We look forward to changes in consumer behavior and preferences. At the end of the day, there’s nothing our team loves more than a good challenge. Bring it on 2020.

 

Looking for more Industry Insights? Follow Digital Remedy on LinkedIn, Twitter, and Instagram.

 

Source:

  1. www.adweek.com/brand-marketing/how-tv-got-sold-131385/
  2. www.warc.com/newsandopinion/news/optimistic-cmos-place-faith-in-brand-strategy/43857

 

IP Zone: Leverage the relationship between users and the location of their IP addresses in a cookie-free, safe and scalable way.

Behavioral: Combine first party with network analytics and enormous scale to define custom audience channels that are optimized to sites with high brand engagement.

Demographic: Reach the right audience based on demographic characteristics such as age, gender and income.

Mobile Device: Target users by mobile device type (Smartphone, tablet, etc.), carrier and operating system.

Geo-Location: Target your audience residential cluster, proximity to retail locations, campaign level DMAs and more.

Contextual: Place a relevant ad in front of a user who is reading content that contains specific terms.

Buying Power and Quality

Let’s be honest. Your ad ops are limited by your access to only a handful of channels and DSPs. You want more reach and better prices, but don’t want to sacrifice quality in order to achieve those goals. Digital Remedy has access to a vast multitude of channels based on relationships we’ve cultivated over nearly 20 years in business. That means we get the best prices, have personal relationships, and don’t get sent to voicemail when we call.

It also means that we can execute omni-channel ad ops for better prices than an internal team, while ensuring the quality is up to industry standards. On top of access to all sorts of specific audiences we’re able to to leverage first- and third-party data across all your campaigns and pivot across platforms based on results. Any campaign, any budget, any platform, any audience. Digital Remedy backed by AdReady is restriction free ad ops….and what could be better than that?

Resources, Time, and Overhead

When was the last time you enjoyed balancing budgets, reading resumes, dealing with aggressive sales teams, or wasting years of time for small gains in performance. By partnering with Digital Remedy you get the full support of $30m in OPEX including marketing teams, sales teams, and a dedicated 24/7 ad operations team. No hiring new employees for media optimization, business development, or account management. No months of training and on-boarding. No long meetings crafting sales materials. Just your team focused on making deals, and our teams and tech focused on supporting and executing those deals in a tech-enabled, digital ecosystem designed to get the most out of any KPI.

Reporting and Support

How nice would it be to have all of your data and insights in one location. We don’t mean an excel sheet sent out once a week with complicated charts, or an XML file with pages and pages and pages of tables (what is this, 2003?). We mean a fully customizable dashboard reporting in real time, or as real time as possible. You get to decide the how, what, and when of the reporting you’re seeing. And that’s ALL of the how, what, and when’s. If you want to see breakouts of all of the individual campaigns in your system, done. If you want broad scope comparisons of all of the campaigns in the last year, done. If you want to see CTR’s for specific audiences and compare them to CPM for your best performing advertiser but limit the scope to campaigns greater than 30k, done. All of this is at your fingertips with the AdReady Dashboard, all in one place.

Jessica Cortapasso

With more than a decade of experience in human capital management, Jessica Cortapasso serves as VP of Human Resources at Digital Remedy. After graduating from Muhlenberg College, she quickly recognized her passion for people and entered the workforce in Human Resources where she gained expertise in employee relations, designing strategic benefit plans, and the development, implementation, and curation of corporate engagement initiatives for big-name brands and small companies alike. Becoming a member of the Digital Remedy family in 2013 while simultaneously acquiring her Masters Degree in Human Resources Management and Development from New York University, Jessica has steered company culture through significant events ranging from acquisitions and a rebranding, to the development and application of our Core Values that shape our daily business practices. Cortapasso resides in Brooklyn, plays competitive volleyball, and loves spending time with her nieces.

Erez Feld

Responsible for the financial and legal practices of Digital Remedy, Erez brings 22 years of experience in precision financial analysis, growth management practices, strategic acquisition, and investment leadership. A graduate of Hofstra University, Erez began his career modeling for corporate finance, and expanded his accounting prowess in the real estate sector. Erez joined Digital Remedy in 2008 as a senior accountant, and helped to create and build an accounting department that could support the rapid growth of the company and aligned with those needs. Over the past 12 years he has evolved through various positions at the company within the finance discipline, supervising and mentoring additional finance personnel, while growing under the tutelage of Michael Fleischman, former CFO of Digital Remedy. Today, he leads the Finance Department by supporting high-level projects such as acquisitions and restructuring, and is responsible for overseeing all financial assets, establishing financial procedures, controls, and reporting systems.

Michael Fleischman

After a successful career as an accomplished Fortune 500 financial professional leading Corporate Finance and Strategic Planning at Cablevision Systems Corporation and its programming subsidiary Rainbow Media Holdings, Michael currently plays a role in the overall management of Digital Remedy including direct responsibility for all financial-related activities including accounting, financial planning, M&A, legal, insurance, real estate and banking relationships. Michael brings more than 25 years of media experience at Cablevision and Rainbow Media and during his career was instrumental in the launching and managing of a number of cable television networks including 10 Regional Sports Networks across the US, American Movie Classics, Bravo, and the Independent film channel as well as the structuring of corporate partnerships with companies including Liberty Media, NBC, Fox/NewsCorp and MGM. Additionally, he was the finance lead on a number of professional sports team acquisitions including Madison Square Garden, the successful IPO of Cablevision and a tracking stock at Rainbow Media.Michael was involved in the creation and launch of Rainbow Advertising Sales which was one of the Cable Industry’s first Local Advertising Sales Divisions.

2020 Industry Trends Newsletter

2020 Industry Trends Newsletter

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