Inter-networks

There is no better period to assess the state of media platforms than now, because there is arguably no more important time in advertising than just after the Upfront season. The TV Upfront is an annual, one-time event during which the broadcast TV networks (ABC, CBS, CW, FOX and NBC) can “advertise” to potential buyers and clients, showcasing their upcoming fall prime programming and network changes.

Over the years, cable networks joined the showcase and the extravaganzas became increasingly celebratory. Though the economy has waxed and waned and recent years have brought arguments against the need for an Upfront season in a rapidly changing marketplace, the industry still uses this time to reveal valuable research and consumer insights. This year, the network showcases did not disappoint and amidst musical performances (e.g., the smash-hit Hamilton), sizzle reels and stars presenting their series premieres, new data was revealed designed to convince agencies and clients to purchase TV, TV and more TV. While each network presented an exciting 2016-2017 season, KSM is focusing on each network’s response to growing consumer demand for anytime, anywhere viewing and the increasing threat to the lucrative, live traditional television platform.

In recent years, the Digital Content NewFront presentations (digital companies’ version of the television Upfronts) have served as a podium for counter arguments to television networks’ single-platform story. Attempts to steal share from TV’s advertising dollars make tensions run high during the NewFronts, as digital properties typically focus on TV’s gradual audience losses.

This year’s NewFronts were no different and highlighted reasons for the TV networks to be concerned. Several digital platforms referenced the 2016 IAB Video Ad Spend Study, which surveys 360 marketing and media buying professionals. It reported that just over 70 percent of marketers plan to move funds out of TV in an effort to increase their spending in digital video advertising in 2017 (47 percent of that spend is currently specific to broadcast TV). In addition, Facebook and YouTube have continued with their efforts to chip away at TV’s mass reach stronghold by claiming that more people watch video on their platforms than the networks’ TV feeds. These assertions drew aggressive responses and many of the major broadcasters fired back to defend the power of their platform.

CBS countered reallocation of funds from TV into digital by citing a test by PepsiCo six years ago. In 2010, PepsiCo canceled its Super Bowl ad spend and diverted tens of millions of dollars from traditional TV to create its social media campaign, “The Pepsi Refresh Project.” The focus was to engage consumers to vote for individuals who were competing for millions of dollars in grants, scholarships and start-up dollars by attempting to make a positive impact on their communities. While the project itself was successful with more than 80 million votes, 3.5 million “likes” on Facebook and 60,000 Twitter followers, it failed to actually sell Pepsi. In 2011, The Wall Street Journal reported that Pepsi-Cola and Diet Pepsi had each lost 5 percent of their market share since 2010, and Pepsi-Cola had dropped from its traditional number two soft drink position to number three, behind Diet Coke.

CBS used this dramatic example to illustrate that while digital ad spend is necessary to build a well-rounded campaign and engage consumers on a one-to-one basis, digital cannot replace TV’s mass reach and frequency capabilities when aggressive sales are necessary. Digital video as a complement to a strong TV base helps address viewership fragmentation and frequency issues existing within lighter traditional viewing segments. While it will definitely complement an ad campaign and cut into the ongoing media fragmentation, pulling budget from traditional TV loses the uncontested reach and consumer buying power that broadcast has to offer.

Fox’s response to the NewFronts was aggressive as well. The network highlighted disparity in audience measurements, saying that comparisons between online and traditional TV platforms made by digital hubs like YouTube were misleading. Taking aim at YouTube’s recently-published audience reach of 14 million for one of their top star channels, Fox claimed that different measurement systems require clarification of audience size. While YouTube’s star may garner a total of 14 million views, the average audience per video was only 1,620 people. By YouTube’s math, a single World Series game, which typically garners an audience size of 14 million, would return more than 7 billion views. While impressive, this is not traditionally a valid TV audience calculation and would not be an acceptable metric on which to base a television negotiation. So while a YouTube video might have 14 million views, those “views” are not representative of the number of consumers the video is actually reaching at any one time, and delivery comparisons between TV and online video must be mindful of these audience disparities.

ABC on the other hand took a different approach to the online versus offline video allocation dilemma. It seized the opportunity to present a new study commissioned jointly with Accenture Strategy entitled Cross-Channel Advertising Attribution: New Insights into Multiplatform TV. The study found that while reallocating a portion of a company’s advertising budget to digital can show immediate sales lifts, multiplatform TV advertising has a more measurable long-term impact. In addition, there is a halo effect when utilizing TV that makes search, display and short-term video advertising more effective. So while return-on-investment (ROI) is currently siloed by medium, Accenture and ABC’s research shows that 18 percent of the ROI attributed to search, display and short-term video should actually be credited to multiplatform TV.

Brands are more likely to be top of mind as a result of strong TV levels, which then drives increased online searches and recall when consumers are later served a display or short-form video ad. The key is to utilize both vehicles in tandem to ensure they are working together to drive the greatest impact. For ABC specifically, the results spoke less about TV’s scale and reach, and more about the long-form content’s power to connect with consumers and deliver a message that drives sales. Of all the network presentations, ABC made the strongest case supporting the necessity of cross-channel ads by showcasing the strengths of each platform and the power of digital and traditional as a whole.

While both digital and TV publishers want to increase their share of ad dollars, agencies and clients ultimately need to utilize data points from both, comparing analytics with a more holistic approach and applying each channel’s impact toward a brand’s market share, awareness and ROI objectives. Performance attribution analytics will assist agencies in implementing a more effective media campaign. As more data is gathered, both shorter- and longer-term strategies can be put in place, resulting in layered campaign performance criteria and powerful digital and TV optimizations.