Media Industry Leaders Explore a New Era for TV Advertising
For a much-needed in-person evening of conversation and cocktails, AAF Austin (a chapter of the American Advertising Federation) gathered an all-star panel of media industry leaders to explore how streaming platforms have changed TV creative, the rise of alternative ad measurements, how economic headwinds will impact TV advertising, whether TikTok makes sense for brands, and much more.
Joining host Lauren Fry, Chief Revenue Officer of Simulmedia, on stage were Alicia Scherr, Senior Manager of Brand Media at The Zebra; Dave Kersey, Chief Media Officer at GSD&M; and Bonnie Rohan, Creative Director at Material. Here are just some of the highlights of their wide-ranging discussion:
Fry: With TV advertising more complex than ever, viewer fragmentation across linear and streaming at record levels, ad-supported CTV gaining momentum and audience measurement in flux, what is impacting you and your clients the most, and how are your media teams handling it day to day?
Kersey: Fragmentation and understanding incrementality are big issues -- being able to buy audiences across platforms but ensuring you're able to manage frequency so you can grow incremental reach. Then there’s aligning currencies across platforms and figuring out what is that metric on which you're converting or buying media. And then the measurement piece is the biggest challenge, in my opinion. The way we've structured our group at GSD&M is that we have a holistic video investment group looking across all platforms and all screens. That's what we're working towards because we're buying audiences regardless of how they're viewing or where they're viewing content. I think a lot of brands and agencies are starting to move into that too, but the measurement and the technology haven’t really caught up.
So, to answer your question directly, fragmentation's the biggest client challenge because there are so many options, so where do you invest knowing you can't invest to reach your entire audience across every platform? No one has deep enough pockets to that degree. So where do you invest most strategically to buy the right audiences to convert? If it's more of a performance brand, that involves very specific metrics and approach. And if it's about brand awareness, then you need a different strategy.
Scherr: I agree with everything you just said. That's exactly how I look at our buys now. I use tools like iSpot that really help me look at the overlap [between linear and streaming viewers], so instead of thinking about it from in incrementality [perspective] – what’s linear driving versus OTT – I think they really work together, so I really like to make sure that narrative stays intact. So, it's really about balancing both of them. And then also the overlap between both and then also the overlap between the publishers and the OTT universes themselves.
Fry: How nimble do you have to be with your media allocation because of that?
Scherr: We do align our splits right now by media consumption. So 60% is still with linear -- we know that it's not going anywhere and there's a lot of other stats out there about how consumers view linear. They still trust it as a traditional channel. They're frustrated with digital channels and interruptions by ads while watching video. So, I like to keep linear intact to keep our reach and scale there but also, again, continuously be flexible and add in OTT where appropriate. And I’m optimizing weekly, which is a lot of heavy lifting because we’re very Direct Response-focused right now.
How to Approach CTV vs. Linear
Fry: Bonnie, from your perspective in creating beautiful pieces of art that we call ads for television, how do you approach that process for CTV vs. linear? What’s different? What’s the same?
Rohan: We are tied to the budgets that our clients have. Video production is very expensive, so we're not necessarily creating specific campaigns for linear and specific campaigns for CTV. We are considering audiences and who they are on linear versus CTV -- and what the message might be if we have a variety of :15’s, for example. But I think in general, some trends are affecting both platforms and that is distracted viewership: as people are watching their TVs, whether they're connected or not, they have another device in their hand. And so when the ad comes on, they're looking at their phone. And so we're actually taking cues from how we shape social in terms of getting the brand up front, having the brand throughout, having the brand at the end and making sure the message is simpler than ever. To me, [this is] one of the biggest shifts in TV [advertising], which people used to think of a little bit more as dramatic storytelling. That can happen for certain brands, but we do have to make [the creative] work really hard, just knowing how distracted people are.
In terms of differences, I'd say that CTV introduces a lot of new ad formats that I, for one, love -- like interactive or shoppable. We don't do a ton of them yet, but when we do, it's fun to get to play around with your content that already exists -- say it's the :30 or the :15 -- and figure out how to serve it up in a way that feels right on Hulu or wherever they might be. Like breaking down your content in new and interesting ways, maybe a little bit of a "Choose Your Own Adventure" kind of scenario, or serving up two of your :15’s within one interactive ad. So I think there's a lot to come in terms of how we will start to concept for ads on CTV specifically.
Fry: There are still a fair number of silos that exist between CTV and linear as it relates to probably media buying and creative. How do you tackle that when you're trying to tell the continuity of the story that you're looking at? And how does the actual media activation tie to the creative that's being built? How has that evolved over time?
Kersey: My answer's simple because we're an integrated agency. So for all of our clients, we do creative production, media, social website -- we connect everything together and it starts with the framework and understanding of: Who is the audience? What are we trying to accomplish? What's the message or the idea? And then we build a plan, both media and messaging, to work together. So, we do build for the space for a lot of our clients. There is a cost implication to producing specific assets and too many of them. But I think that's key for audiences and having a valuable experience. With fragmentation, we've lost the ability to earn people's attention and [viewers] can choose not to see ads. Even we in the industry probably choose not to see ads when we're personally consuming video. Because of that, you need to give viewers an experience -- a valuable experience. It needs to align. It needs to be contextually relevant. And that's something we hold true to all our client partners to make sure we are bringing them out into the world and connecting them with audiences in the most relevant way. The ultimate goal is brand success, whatever that KPI is. There are situations where you have to retrofit certain things, but by and large, we try to create upstream where we're building out the framework before anything goes into production. Any plans, negotiations, partnerships, RFPs are put out there.
Fry: Alicia, from the brand side at The Zebra, how do you handle that?
Scherr: We're still building our brand awareness so I think linear and CTV should be uniform. We really approach them in the same way. But with linear :30’s costing more than OTT :30’s, right now, I pay extra special attention to our :15’s that are on linear, knowing that they have to hit really hard to get our messaging out there. When you're in the pod experience, watching your commercials, it goes really fast at :15 and it's really hard to make sure that you're memorable and your CTA is landing. So, we've done a lot of work to incorporate our branding throughout, really highlight the Zebra.com url and then make sure that message is really simple to consumers. And then, within OTT, I test :15’s and :30’s based on the placement within the publisher. So I know that sometimes on the TV screen, :30’s might do better, but they might also be running on desktop and mobile and the :15’s might work better there. So sometimes I split that out to get the best performance by each publisher.
Fry: Bonnie, do you have thoughts on this from a creative perspective?
Rohan: Fragmentation has forced media and creative to work together much more closely. Speaking for myself at least, I think creatives are so much stronger for having to sit side by side more with the media team and the media planners and the strategists to truly understand every format from the traditional :30 all the way down to breaking stuff on CTV and then social and digital. Even though it creates more challenges when you're thinking through what your campaign and what those different levels of messaging will be, it has forced everything to be stronger and the teams to be more collaborative in a really good way.
Attribution and Alt Measurements
Fry: Attribution is changing drastically for linear and CTV as brands are exploring video measurement and media currency alternatives to Nielsen. Where do you think this is all headed?
Kersey: We're all trying to figure out and understand it. I know Disney's now allowing people to transact off Samba, but I don't think they've had any real meaningful partners transact that way yet. Nielsen's going to continue to be how we're transacting in the short term at least. They’re trying to advance a lot of their methodology, but they're being challenged after decades, which I think should have happened a long time ago. I think it'll be interesting to see what happens, but in the short term we still have to use what we know and more importantly, what our clients are expecting because they're used to the currency as well.
Scherr: NBCU just chose iSPot as their currency partner, so they're all working really hard and focusing on that offering in conjunction with their attribution. I think some of these [alternatives] will serve as complements, but not replacements, to Nielsen right now.
Kersey: The challenge is Nielsen is across all. Whereas if Disney's working with Samba and NBC's working with the iSpot, then there's no consistency. And that's what we need from an agency perspective and media perspective -- consistency. We need to look at things, apples to apples, even beyond linear. It's looking at CTV and understanding the full landscape. I also know NBC and Disney are still working with Nielsen, so it's an alternative, it's not that you have to now convert over. So I think it's a test-and-learn for the industry to see what's working and what's not. And then who knows what will happen in the next couple years?
How the Economy Impacts TV Advertising
Fry: Macroeconomics are impacting every single one of your businesses. When it comes to video and your marketing, what’s impacting your business the most day to day?
Scherr: As I mentioned before, we are really nimble at The Zebra. So we’re pretty much almost 100% scatter at this time -- we've pulled back on any guaranteed buys. [We’re in] the [car] insurance industry and inflation, gas prices and also auto sales have been really impacted since last year. So every week, we are learning more and more about what our thresholds are, what the current demand is, and then continuing to build up as we see some of that come back to life. Hopefully this year and next year.
Rohan: Our clients absolutely demand we be agile and nimble. One of our big clients is PODS Moving & Storage and they are so tied to moving trends, which have never been more volatile, wild and crazy. And that has really impacted those proactive versus reactive conversations. So the stance we've taken is yes, we will adjust, but let's make sure that we all are on board (media, client, creative) directionally with our fundamental strategy and goals.
Kersey: We have a very different perspective because the economics are affecting all clients. We have retail clients that need to be more flexible because of supply chain issues and not being able to get product to stores or product to the U.S. to stores. Looking at QSR brands, they’re struggling to hire delivery drivers. So they have product. They have the stores and locations. But it's about getting product to the people. So it's all different depending on a brand’s situation. What is true is sticking with who your audience is. Who's driving our core business? I think strategy is important, but there needs to be some flexibility. Because,when you're looking at brand awareness and converting it into more performance or DR tactics to drive business today versus long term, you do have to make some shifts. But knowing your audience and what is going to drive your business is still key and critical.
Fry: As the economy worsens, do you think that brands will shift more to a direct response model just to maintain what audience they have, or do you think that they'll take the risk and invest in the brand in that time of opportunity?
Kersey: I don't think brands are going to go full DR. I think most brands understand the value of brand building. And you need to bring people into the ecosystem because if your pool's not big enough, you're just talking to the same people who aren't converting. So you need to bring new, more, different people into that world.
Scherr: I agree and would add that really focusing on retention and LTV [lifetime value] is going to be key for clients during that time too.
Privacy and Data Clean Rooms
Audience Member: We live in a privacy-first world now. What does the market need to think about now in terms of privacy, when it comes to television and opt-ins, opt-outs, etc.?
Kersey: It goes back to audiences and understanding people and what their affinities and content alignments are because, you can still find similar people without having to opt in or using any kind of PII [personally identifiable information] or first-party data. If a brand has PII or any kind of data, that helps you build audience segments but I don't think that changes the narrative. I look at the video landscape holistically and it's really about precision at scale. The more precise you can be with the right audiences across all platforms, you can find scale and you don't need to worry about some of those privacy factors. Not yet, anyway.
Scherr: A lot of the publishers are working through clean-data rooms now. Advertisers are going to have to learn how to work with agencies as well their own data and trust that the publisher knows their data very well too. It's really on them to manage these clean rooms.
Fry: Is the onus on the agencies to figure out the clean room strategy? Or is it on the individual brands?
Kersey: It's a collaboration. You can't own one without the other. Agencies certainly have their own, but it will never work without client-brand collaboration. It’s their data at the end of the day and we're agents of their data and their investment. So, it has to be a partnership.
The Trouble with TikTok
Audience Member: I know some brands will not advertise on TikTok because they don't want to be associated with it. Can brands afford to what we today call narrowcast to omit certain platforms just because they don't like what they stand for?
Rohan: In the past, there were only so many options [for advertisers]; now there are so many different platforms. I don't think it's necessarily smart to totally omit TikTok -- that would maybe not be in a brand’s best interest, depending on who the audience is. But I do see some of our brands shifting away from Facebook and Instagram just because they were upset about the monopoly that they've had for so long and feeling like they were totally controlled by those platforms. And I think now they have more options so they can find their audiences in other places, thanks to things like CTV, where the younger people are coming to play more often.
Scherr: Yes, I think it really depends on your audience. User-generated content is really huge right now. So, depending on if that's where your audience is and you think you need to reach them, then you need to choose the best medium to do that. Maybe you could avoid a TikTok and you end up running on Instagram Reels or whatever. But I think it's important to keep in mind where your audience is.
Kersey: The value of fragmentation, even though we've complained about it, is you can now find audiences across different platforms. So, you don't have to rely on a single channel or a single outlet. We’ve had clients that have pulled back from Facebook and Instagram for the same reason, a lot of the fake news that was going around. The core audience of any military brand is 16-20, and there are obstacles in working with one of the largest platforms where this audience spends most of their time. TikTok is broadcast. It is one of the largest platforms, not just from a user base, but from a pure consumption-on-a daily-basis perspective. So you have to find your audiences on other platforms. It puts a lot more work on us as agencies and [requires] educating clients or getting them comfortable. But our job is to navigate the system to make sure we can deliver on the client’s goals and reach the right audiences.
QR Codes in TV Advertising
Audience Member: I'm curious to hear your thoughts on QR codes in this new era. Are they something you are implementing or plan to implement?
Rohan: Well, good news – they work! All the way from your couch to your TV, so that’s fun. I think it does add a new layer of accountability and tracking that brands didn't have before, and I'm all for that because I think in a new age of digital, there is just a higher expectation to see some hard-number results. So for that, I think it's great. One thing we talk about is just making sure that we're mitigating what the measurements are that are associated with QR codes, because people are still watching TV. They're distracted. They are into Yellowstone or whatever it is that you're binging right now. So are people seeing [the QR code]? Are they visiting the website? Can I track a direct sale from it? I think we just need to be having those conversations with our clients and partners to make sure that we understand that. For a lot of my brands, the role of CTV and linear is awareness, not that direct sale. So yes, QR codes are a good thing. We just don't have to make them as big as you think we do. And let's ask what are they tracking.
Kersey: What a COVID success story: QR codes were dead, and then we needed menus and they came back. Personally, I don't know if there's a ton of value there for marketing. It has to be purposeful. There has to be an experience for a consumer to engage and get something out of it, versus it just being fun. Like the [Coinbase] Super Bowl ad was a stunt for press [but] they actually got a lot of results from it too, because it was just so different. If you're trying to use it to transact and drive sales or downloads, it has to be purposeful in the right environments and for the right product.
Live Programming Changes Channels
Audience Member: This fall, Amazon will stream the National Football League. We may see things like college basketball and a lot of the live entertainment coming there in the future. How are you thinking about Amazon differently than traditional channels?
Kersey: They’ve had Thursday Night Football. They had some other programs. Hulu shows live sports. The world's changed and it's going to continue to change. Exclusive rights for Amazon changes the dynamic completely. You're still looking at who the audience is and who the consumer is, so you're buying the live sports, the leaned-in environment. Does it take away from linear? Of course it does because they've lost that scale, that audience to a degree. But if you look at it holistically, if you have a sports strategy or a live-event tentpole strategy, you have to look at things across screens. It shouldn't matter if it's linear, local, or OTT because it's all the same audience on the other end.
We've done some first-party and third-party surveys for some of our clients around the question, "What do you consider TV?" and audiences don't look at it as linear. They don't even really understand that. It's like, “whatever is playing on my living room screen is TV.” That could be Hulu. It could be Netflix, NBC, or Amazon. And so we have to plan that way; we have to think that way because effectively we are representing the consumer, putting the brand in front of them. So it's changing the dynamic. It's going to change the relationships, the investments up front. And I think it's honestly time because Gen Z doesn’t consume like we as Gen X consume. We have to figure out how we're going to capture them because brands have to survive, right? Legacy brands have to succeed. They have to find ways in and they have to think differently. They can't think of a linear schedule.
And Gen Alpha's the next one, and they don't even change channels on a TV -- everything's on a screen in their face. So, we have to understand that so we can keep brands educated and bring them forward. And that has implications with any of the legacy franchises that are now moving to streaming platforms.
The Future of Fragmentation
Fry: Let’s end with predictions: Will the market continue to fragment or will it consolidate? And then what are the implications for your business or even your life as a consumer?
Scherr: Come back to me in a couple years. I think the market's going to consolidate. We've been seeing a lot of that already. For example, EyeQ is Viacom's package on OTT and they have Paramount, Pluto, CBS, Viacom all in one package. And it's really hard to tell which of those individually is really contributing to your business outcome when you're looking at the package as a whole. So, I would say I think that's where things are going for the most part, and that's an implication.
Rohan: It's going to consolidate. But I think, more than ever, having a linear and CTV approach in a very diversified media buy is going to be critical.
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