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‘Mini gold rush’: How ad buyers are handling video podcast inventory

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By Sara Guaglione

As publishers’ podcast executives ramp up their experimentation with accompanying video, podcast ad buyers are starting to have more conversations about what opportunities this format can provide to brands — and which investment teams handle the buys, according to four agency executives who spoke with Digiday.

“I think that you’re seeing a little mini gold rush here that people are responding to. Word got out that people actually like consuming podcasts… on YouTube and now the marketplace is reorganizing around that,” said Dan Granger, CEO of audio ad agency Oxford Road.

Molly Schultz, svp of integrated investment at UM, said she’s recently had more discussions with publishers about video podcast opportunities. These types of conversations started picking up in the fourth quarter of last year, according to Adam Arnegger, managing partner and executive investment director at Wavemaker US.

With the recent fervour around video podcasts, ad buyers discussed the advertising opportunities for brands in video podcasts and how they are organizing their investment teams to manage the crossover from audio to video.

Audio teams handling video ads

Despite the fact that technically ads in video podcasts are in digital video, audio investment teams at ad agencies are continuing to handle the media plans. That’s because video podcast ads are typically tied to audio podcast ad deals, agency execs said.

“If you have a show that has 100,000 impressions and 50,000 are on YouTube and 50,000 are audio, we’ll take the 100,000 impressions that include that video because we’re going to see that [see and say] effect have a larger impact on ad response. So the units are valuable and we don’t need to artificially limit ourselves on the definition of a podcast,” Granger said. “It probably should be a both-and model.”

At Wavemaker, pitches are going to the audio investment team and then brought over to the video team.

“We’re still in the process of figuring out where this lives,” Arnegger said. “We’re handling it from the core, which is audio and then we’ll start to evolve that as … part of our video buying consumption.”

However, this won’t happen until video podcasts become “more mainstream” and more of their podcast partners start to produce them, he said. “It is something that we are looking at and considering for each and every one of our clients now,” Arnegger said.

UM has integrated investment teams that oversee all channels, so there’s no delineation there, Schultz said.

Video podcasts can also help advertisers that are “still hesitant when it comes to believing audio can be enough on its own” to “feel more comfortable that they’re able to get the full sight, sound and motion,” she said.

However, cross-device attribution is not possible through a platform like YouTube, Maria Tullin, vp and managing director of advanced and digital audio at Horizon Media, noted in an email — meaning it’s difficult to track a podcast listener on a mobile device to a desktop viewer on the platform.

“For clients that are measuring success across upper funnel KPIs, I think it’s a great opportunity to come up with creative ideas, brand integrations and larger sponsorship opportunities,” Tullin said. But for lower funnel clients focused on cost per action, customer acquisition cost or return on advertising spend, “it can be a harder sell,” she said.

A Twitch model?

The typical video podcast ad format is similar to the backbone of podcast audio advertising: personal endorsements, agency execs said.

Video “opens up a lot of branding opportunities” like unboxings, product placement and brand logos, Tullin said. It can also be as simple as having a Coke can on the table near a podcast host during a recording of an interview show, Granger said.

Schultz likened it to the way advertisers sponsor content on the livestream platform Twitch. “It’s a different format and content, but sort of similar in the fact that there is a personality who’s hosting the content, which gives you more opportunity to weave the brand in,” she said.

Pre-roll and mid-roll ads on a video platform like YouTube are “table stakes” and add further “frequency” for the more integrated advertising opportunities in video podcasts, she added. “Because there is a host and because it has roots in podcasts, we would be interested in how we can… work ourselves into the content itself,” Schultz said.

Bleacher Report sells sponsorships for its live-streamed podcast recordings of shows like “The Voncast” and “Taylor X” aired on its B/R app, said Tyler Price, vp of content development and production at Bleacher Report. The resulting video assets are then distributed on social media and YouTube, where — depending on the commitment level of the advertiser — they can monetize the video with standard ads. State Farm and Chase have sponsored B/R’s podcast livestreams, Price said.

“If you don’t have a video asset attached to your audio format now, you’re leaving audience on the table and you’re leaving money on the table,” Price said.

By Sara Guaglione

Sourced from DIGIDAY

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Inside TV’s Terrible, Horrible, No Good, Very Bad Upfront

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By Brian Steinberg

Depending on who is doing the talking, TV’s 2020 “upfront” market was absolutely horrendous or merely awful.

Advance advertising commitments for the next year of TV could be down as much as 15% to 20%, according to six media executives and ad buyers familiar with parts of the industry’s annual negotiations for commercial support for its next programming cycle. The projected shortfall takes place after a slew of regular TV sponsors were crippled by the coronavirus pandemic, and the TV networks’ ability to showcase original content was severely hurt by scuttled and delayed productions.

More concerning, perhaps: some of the drops in advertising outlays could become permanent, as advertisers scramble to get commercials in front of a viewing public that is turning increasingly to streaming, on-demand video. “Things we thought would happen in 18 months or two years are happening in real time,” says one media buying executive. “What may have been the right path six months ago will have to go out the window.”  That could leave TV fighting harder to keep ad dollars at a time when the medium needs them more than ever.

The nation’s five English-language broadcast networks could have seen the volume of ad commitments they secured for their next cycle of primetime programming fall by at least 9.3% to 14.6%, according to Variety estimates.  It is the first time since 2015 that upfront estimates have sagged. Based on conversations with media buyers and other executives, Variety estimates NBC, ABC, CBS, Fox and the CW have secured between $8.2 billion and $9.8 billion for their 2020-2021 primetime schedules, compared with between $9.6 billion and $10.8 billion for primetime in the 2019-2020 season. Last year, upfront volume surged between 5.5% and 7.4% over 2018.

UPFRONT VOLUME

IN PRIMETIME, AMONG FIVE ENGLISH-SPEAKING BROADCAST NETWORKS

2010  $8.1B to $8.7B

2011  $8.8B to $9.3B

2012  $8.8B to $9.3B

2013  $8.6B to $9.2B

2014  $8.17B to $8.94B

2015  $8.02B to $8.69B

2016  $8.41B to $9.25B

2017  $8.78B to $9.62B

2018  $9.1B to $10.06B

2019  $9.6B to $10.8B

2020  $8.2B to $9.8B 

 

Source: Variety estimates

The numbers should be taken as directional indicators, not hard, cold cash. Upfront figures are typically built on fuzzy math and rarely have any correlation to the ad money big media owners like CBS, Walt Disney, NBCUniversal, Fox Corporation and WarnerMedia collect by the end of the year. Advertisers can pull orders at certain moments in the season or “re-express” advertising if specific programming is yanked off the schedule, changing the nature of their commitment to purchase inventory. But they still serve as a sort of guide as to where money is being sent. In recent years, the figures have lent ballast to the theory that the networks can still keep new money flowing despite ratings erosion and viewers moving to streaming options. This year, the numbers indicate tricky trajectory ahead.

As bad as the numbers are, media executives say they expected worse. Movie studios, some retailers, and restaurant chains and travel marketers had little visibility on their future business, and cut spending. Automotive advertising, long a staple of TV advertising, was mixed.  The networks had to rely on insurance companies. pharmaceutical marketers and big consumer packaged goods giants – advertisers whose long association with TV has given them the ability over the years to command more favorable pricing rates year over year.

“The advertisers had aggressive expectations for rollbacks, because they all thought a lot of categories were on the side-lines, that the networks were going to get really nervous because they would not have enough of a base,” says one media executive. But the TV outlets resisted some of that pressure, pushing back against harsh demands until they could talk about the return of sports like the NBA, NHL, golf, and, most importantly, the National Football League.

The upfront showed “a mix of stronger demand than many people have estimated just a few months ago,” said Comcast CEO Brian Roberts at a recent investor conference, noting that the company sees “really good signs for both the third and fourth quarter. “

To be sure, the end results were not as robust as they have been in the recent past. Big TV networks in the last three upfront sessions have been able to snare double-digit percentage increases in the cost of reaching 1,000 viewers, a measure known as a CPM that is central to these annual discussions between U.S. media companies and Madison Avenue. Last year, NBCUniversal sought CPM increases of between 13% and 14% for primetime inventory, while CBS pressed for CPM hikes of between 14% and 16%. ABC sought 14%, Fox called for 12% to 13% and the CW pushed for 14% to 15%.

One year later, the rate increases are much more paltry, with ad buyers suggesting CPM rates rose just 3% to 4% for top inventory, with some media companies consenting to single-digit percentage rollbacks for less-desirable and less popular inventory. The media companies are also said to have offered rollbacks for digital inventory – even though some of it was in high demand from advertisers that were ready to spend.

Walt Disney, ViacomCBS, NBCUniversal and Fox declined to make executives available for comment.

If broadcast faced headwinds, cable squared off against a hurricane. Some media executives believe the volume of ad commitments at cable networks could be down by 20% or more.

To keep the dollars flowing, the networks had to be flexible. They offered compelling rates on digital inventory to stoke commitments to primetime. They gave sponsors more wiggle room to claw back dollars in case of a business downturn. And they made sure advertisers would be taken care of if certain big events, such as sports matches, never made it to air.

Even so, the upfront was beset by numerous obstacles that have not impeded it in the past. Consider that in May and June, when market haggling usually takes place, few executives knew when sports might return to the field, or when primetime favourites would start to film anew. NBCUniversal’s Olympics broadcast, slated for this past summer and often a massive spur to new ad talks, was postponed. A number of prominent advertisers – including Procter & Gamble and Unilever – called for the industry to shift the upfront to the fall or later in the year. And Nielsen rolled out a new measure of out-of-home viewing for entertainment programming that the networks had to convince some advertisers to accept.

The Madison Avenue manoeuvre to push back upfront talks may have backfired, according to one media buying executive.  Advertisers seeking so-called “calendar-year” deals – agreements that start in 2021 rather than the beginning of new fall TV – found higher costs, says the buyer. “I do think if anybody tried to wait to do calendar deals, they really got hurt.”

Procter undercut its own efforts, not waiting for its calls to shift the upfront to take effect. Instead, the maker of Pampers and Crest did a direct deal with ABC, CBS and NBC, according to two people with knowledge of the matter, rather than working through its agencies. The pact was for broadcast inventory only, these people say, and did not focus on cable. In September, Marc Pritchard, P&G’s chief brand officer, raised eyebrows when he said at an industry conference that “we’ve taken control of when we negotiate and buy TV media. To level the playing field, we negotiate directly with as many as possible.” Most large advertisers rely on one of the ad industry’s big media-buying firms to get such things done.  The consumer-products giant declined to offer any details of its deal with the networks, noting in a statement that “we do not comment with regard to any supplier negotiations given they are proprietary to our business.”

There were still some bright spots. Ad buyers suggest NBCUniversal and Disney fared better than their competitors, buoyed to some degree by interest in on-demand hubs Peacock and Hulu. Ad money moved to streaming video across the board, with buyers looking at ViacomCBS’ Pluto and Fox’s Tubi, and even setting aside dollars for the ad-supported version of WarnerMedia’s HBO Max, which one ad executive expects to see debut in early 2021.

Some advertisers gravitated toward Discovery, which has maintained original unscripted programming at outlets like Food Network while the rollout of new comedies and dramas have slowed. Discovery said the number of clients joining its “Discovery Premiere” offer, which puts clients in a package of 30 of its best-known series, increased during the upfront to 75 from 25.

Many networks are looking to better times. Several held back upfront inventory so it can be sold in TV’s so-called “scatter” market, when inventory is purchased closer to the date it airs and is often sold at a premium. Speaking to investors recently, Fox Corporation CEO Lachlan Murdoch said the company had probably held back 5% more commercial inventory than usual in hopes of getting better prices for it later in the cycle.

The networks will need that money.

Based on Variety’s estimate of a 10% to 15% cut in volume, NBCUniversal may have seen primetime commitments fall to between $2.68 billion and $2.84 billion, compared with $3.15 billion in 2019. ABC may have seen primetime commitments fall to between $1.66 billion and $2.18 billion, compared with between $1.95 billion and $2.42 billion a year ago. And CBS may have seen primetime commitments fall to between $2.03 billion and $2.51 billion, according to Variety estimates, compared with between $2.39 billion and $2.79 billion in 2019.

The smaller networks were affected as well. Fox may have seen primetime commitments fall to between $1.36 billion and $1.64 billion, according to Variety estimates, compared with between $1.6 billion and $1.82 billion in 2019. And the CW may have seen primetime commitments fall to between $440.8 million and $$597.1 million, according to Variety estimates, compared with between $592.7 million and $663.4 million a year earlier.

The moves wipe out some the volume gains the networks have made since a three-year stretch in the middle of the decade, when the TV companies had to muscle through tougher upfront sessions in the aftermath of a large recession. They have been helped in recent years by advertiser concerns about offensive content on YouTube and other social-media outlets as well as an inability to get independent consumer data from many digital players.

Last year, Madison Avenue rushed to TV as if Tony the Tiger and the Marlboro Man were still in their prime. As more Americans move to stream their TV favorites, media companies seem to have good reason to worry about how closely advertisers will follow them.

By Brian Steinberg

Sourced from Variety

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‘We honestly stay away from it’: Facebook’s surging video pages spark brand safety concern for ad buyers

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By MAX WILLENS.

Ad buyers are getting nervous about how crowded Facebook’s in-stream video program has grown lately.

Over the past month, the number of pages eligible to monetize their videos through Facebook’s in-stream ads program has leapt by more than 30%, with more than 24,000 pages joining the program in the past 30 days, according to a spreadsheet Facebook regularly updates for advertisers.

The pages include everything from prank video and meme accounts to mukbang pages, which offer videos of people eating gluttonous quantities of food, and they are part of a longer-term push by Facebook to home in on YouTube’s ad business.

All pages in the program are subject to an approval process and must adhere to the platform’s brand safety guidelines. But buyers say that the brand safety guard measures Facebook has added to its in-stream program lag behind YouTube’s, and many see the changes Facebook has made as more focused on maximizing inventory than providing a safe place for their clients’ spots.

“They’re prioritizing maximizing inventory at the expense of making it brand safe,” said Erica Patrick, vp of paid social at MediaHub. “You shouldn’t have to make a giant investment to get into brand-safe content.”

Two buyers pointed to the proliferation of viral videos in the in-stream program as examples of content that their clients would not want to appear beside.

Reached for comment, a Facebook spokesperson wrote that the growth of the in-stream program has been organic and said all pages are subject to approval and brand safety guidelines.

In the early days of Facebook’s video ad business, the only in-stream inventory available was on Facebook Watch, which Facebook tried to position as a source of high-end, original programming created by entertainment studios and media companies. Inventory from that programming is still available as part of Facebook Reserve, a separate stock of spots that carries a minimum investment of $100,000, one buyer said.

But that’s too expensive for most buyers, so Facebook has been expanding its supply of cheaper in-stream ads, which can be bought via auction. In the summer of 2018, Facebook expanded Watch by giving creators the opportunity to apply for Watch pages, before reversing course ten months later by phasing out Watch pages altogether.

Since then, the number of pages eligible for those in-stream ads has exploded. Over that same stretch, Facebook has made moves to shore up brand safety across its platform, including announcing the launch of video-level whitelists on Watch in May, along with the addition of a third brand safety partner, Zefr.

But content-level whitelisting is cumbersome and time-consuming, two buyers contacted for this said, adding that Facebook’s blacklisting capability, which are capped at 5,000 pages, is insufficient. “It’s always been an untenable proposition,” said one ad buyer who asked not to be identified.

Those issues were on buyers’ minds before the sharp surge in pages this past month. “The more pages you throw into the mix, [it] can be concerning,” said Callan Lynch, senior manager of paid social at media agency Assembly.

That surge is challenging, buyers say, because context matters more for in-stream ads than it does for other video ads shown in Stories, or in Facebook’s feed, said Lindsey Boan, director of media at the full-service agency Madwell.

“In-feed, in stories, you know the ads are not connected to the person or publisher,” Boan said. “But in-stream, that’s not inherent.

“If you’re a client who’s concerned with those things, you just don’t run on the platform,” Boan added. “It’s not typically included in our base buys, and we honestly stay away from it unless we need it.”

Ultimately, Facebook still delivers efficiencies in price and targeting that buyers are hard-pressed to find elsewhere.

“A view of the ad by the intended audience for the best price is our ultimate goal,” the first buyer said. “But there’s been an evolving conversation” about how suitable the program is, the buyer added.

By MAX WILLENS

Sourced from DIGIDAY

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The great winnowing: Ad buyers are dropping DSPs to reduce fees and duplication

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By Ross Benes

A thinning of the demand-side platform herd may be upon us.

Ad buyers are cutting down the number of DSPs they use so they can decrease the risk of bidding against themselves and reduce their fees and administration costs. Since many DSPs have added similar features, there is little differentiation between platforms, which could spell trouble for niche players without scale.

“I think there was a love affair with all these DSPs for a while,” said Warren Zenna, U.S. managing director of Havas-owned mobile agency Mobext, which generally uses five to seven DSPs across its portfolio of clients, down from about about a dozen a year ago. “But agencies got smart and are picking the ones that work best for them.”

About a year ago, digital agency Bam Strategy used to use three or four DSPs, but it has cut that number down to one or two, said Adam Muscott, Bam Strategy director of marketing. A big reason for the cutback was that most DSPs have similar inventory, which places buyers at risk of duplicative bidding and targeting. Most exchanges use second-price auctioning, where the second-highest bid determines the clearing price, which makes duplicative bidding problematic because buyers bidding against themselves can inadvertently drive up the price they pay for impressions.

For example, imagine that a buyer is bidding $10 across multiple DSPs to target females ages 20-25. Since the inventory is the same in these platforms, the buyer might inadvertently bid three times on the same impression. If the buyer wins the auction at $10, then the buyer will pay $10.01 because the second-highest bid is just another $10 bid from the same buyer. However, if there wasn’t this duplication, the buyer could win the impression at a lowest cost.

Brand clients are dropping DSPs that don’t provide access to unique inventory, said David Lee, programmatic lead at ad agency The Richards Group. A year ago, his clients used five to seven DSPs, but now they are only using three or four.

Buyers are also dropping DSPs to be more efficient. Each additional DSP is another platform that buyers have to be trained on, and it is another dashboard to have to monitor during campaigns. Also, the contracts are complex, so reducing DSPs equates to lower administration costs, Zenna said.

“It is a natural outcome where there is a business with a lot of money flowing through; you will see a lot of players enter it, but eventually it evens out,” Zenna said. “A lot of companies, understandably, entered the market to take their shot. But I think [a culling of DSPs] is inevitable. Some of them have really good technology, and people will want to own that. But not everyone will get an exit.”

For several years, ad buyers treated DSPs like commodities. Buyers approached DSPs like they were ad networks and they’d add 10 platforms to their campaigns, hoping that one would eventually give them price advantages, said Ed Montes, CRO at DSP firm DataXu. But those days are coming to an end, as buyers wise up to how programmatic buying works.

“We have hit an inflection point where buyers now understand the platforms, so that may be why you see less [DSPs] on multiple plans,” he said.

Rich Sobel, svp of programs and services at Publicis Media, said the reduction of DSPs came organically. Because the major DSPs have added features that allow them to buy across channels, buyers no longer need separate DSPs for desktop display, video, mobile and native. So instead, they adopt just a few large DSPs, he said.

“There is a segment of [specialty DSPs] who will suffer,” said Ross McNab, managing director of North America at DSP firm MediaMath. “The clients are voting with their spend on that basis.”

By Ross Benes

Sourced from DIGIDAY UK

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