Upfront 2023/2024

“Plus ça change, plus c'est la même chose “– the more things change, the more they stay the same

Andrew McLean

Inventus Media

4/13/2023

With 4 weeks to go until the upfronts, we are starting to see the players signal their positions and our pricing models grind through scenarios of supply and demand. However, this year will be different, and we see some significant changes, but it will remain a zero-sum game – some will win and therefore some will lose. The best description of the upfront is that it is just another futures market, except with more incentive to commit upfront. In recent years, with falling audiences in broadcast and cable, the upfront became a strategy to guarantee a weight of media for a commitment of spending. Staying out of the upfront was to risk paying more for less.

But this year we will see Netflix take CBS’s upfront slot and while this may be symbolic, we see it as having more significance. Recently it appeared the upfront presentations were more of an investor relations event than a pitch to the media market as the focus on new program launches faded. But the addition of ad impressions from CTV/FAST channels serves to give buyers new options and relief from ever-increasing costs and they are being welcomed with open arms by advertisers and agencies. After years of ever-declining supply and increasing demand the new definition of television – with better measurement – gives us a different combination of buying options.

What stays the same is that the negotiations will remain driven by efficiency, reach, and presence in must-see content. The strategy, as it has been since my first television spot buys in "Coronation Street", is to balance those three elements that dictate the structure of the buy. Netflix is already reminding us all that all impressions are not created equal with advertisers competing for presence in their newest content with demand only constrained by Netflix managing the pace of ad-supported homes growth. Then there is the sleeping giant of Amazon which has this year increased ad inventory to Prime Video, which already takes 3% of total viewing (source The Gauge Nielsen) and is already in 50% of homes. With #Fubo, Pluto, and Tubi we see more audience opportunities, and the days of playing “hunt the missing audience” are over.

The definition of television has now changed and must reflect that buyers are using their budget allocation tools to ascribe share across all the traditional definitions along with CTV, FAST, Digital Video, and now even short-form video. What remains is that by whatever description, the combination of large screen impact and quality content providing the platform for engaging, entertaining and empathetic messaging remains a preferred choice for advertisers.

For this year, some new players, some of the same players who don’t look the same, new sales pitches, new data to evaluate but the same end game – optimize the impact of an advertiser’s media investment on their business. Find the optimal mix of content, audience, and timing, and then negotiate the best terms of price, delivery, and position. The winners, as always, have the data, the leverage, and the confidence in the future from the experience of the past. 

21 Sep 2021 | Nick Manning

‘FOFO’: it's time to let the sunshine in

Nick Manning shines a light on those attempting to illuminate the egregious practices that cost advertisers billions of dollars in unjustified adtech fees

Our current descent into the long, dark nights reminds us of just how much we value sunshine. It lifts the spirits and, as the saying goes, it’s the best disinfectant.

One area where we need more sunshine is in the increasingly complex world of digital adtech, where so much of advertisers’ media investments disappear.

One of the great mysteries of our times is how and why so many adtech companies have been able to make incredibly high margins, without having to provide evidence of their role in making advertising work harder and be more successful.

A visiting Martian would be bemused by an industry where the middlemen take half the money (or more) without having to prove their worth.

It is very hard to know whether they add value or not. They get paid handsomely anyway, and often enough they can float their companies at sky-high valuations as if their lack of accountability were going to last forever.

Every so often we get a stark reminder of just how mad our industry is. It’s usually around the quarterly financial reporting times when the big adtech players unveil their super-profits. 

The Trade Desk (TTD) is a good example. Its Q2 2021 financials showed that its revenue had doubled year-on-year. Nice work if you can get it, but the really startling number is its EBITDA margin, a cool 42%. I’m sure TTD’s customers aren’t paying 42% commissions, so there must be some other explanation for it.

All comparisons are odious but WPP is worth £12 billion on roughly the same number in revenue. The Trade Desk is worth roughly double (£25 billion) on about 15% of WPP’s revenues.

So are we to believe that TTD is more than twice as valuable to the global advertising industry as the whole of WPP? And who can say that TTD has earned its right to such super-profits through its incredible contribution to the personalisation of digital advertising?

Just to prove the old saying that ‘where there’s muck, there’s brass’, Taboola’s maiden results showed a 35% margin (EBITDA ex traffic acquisition costs) with a current valuation of $2.3 billion, rewarding it for its contribution to global awareness of dental implants and funeral plans (nowhere near you).

Yes, there are adtech companies who have dramatically under-performed since flotation, but Tom Triscari’s ‘Quo Vadis’ newsletter shows that adtech players in totality have dramatically outperformed the market since 2018. (Disclosure: Tom and I are advising the ANA on its current Programmatic Transparency study).

No doubt the investors in these adtech success stories will be happy with their gains, but any truthful analysis of the long-term sustainability of the adtech bubble suggests that they should take their money out now.

Few analysts provide unbiased insight into this crazy bubble, but one independent player, Arete Research, truly knows this space and its latest coverage of this sector (‘Between a Rock and a Hard Place’) should be read by investors, yes, but by advertisers too. 

It delivers one of the best analyses yet of the future direction of the advertising industry and how the fortunes of the big media platforms and the adtech players will be affected by the many and various trends in the market, including of course the various privacy initiatives and the phasing out of third-party cookies.

It’s hard to summarise such a majestic overview in a few paragraphs, but its review of the industry includes the, correct, forecast that the digital advertising market will continue to split into two highly-differentiated sectors, with the 'Walled Gardens' having an even more distinct advantage over the 'Open Web'. 

Arete Research says: We think this has been a long time coming after billions of dollars were wasted buying open-web inventory largely to the benefit of independent adtech players as well as unscrupulous publishers”.

And its report goes on to show that the independent adtech industry (and specifically, the recently-floated companies with sky-high valuations) is in for a big correction. 

Investors can take their huge winnings and go elsewhere, but what about the advertisers who have single-handedly paid for the massive profits that have made real-estate brokers into multi-millionaires in Silicon Valley and New York?

Arete is clear on this too. Many advertisers have either been unaware of the extent of the raid on their media investments or turned a blind eye. Arete talks about ‘FOFO’, the fear of finding out (also used in a good paper from R3 in August) because of the potential extent of the wastage on their watch. 

Theoretically, the newly-floated adtech players should be subject to greater scrutiny from investors on how they make their money, but this doesn’t happen in practice.

Investors are happy to take the money and not ask too many questions when the numbers are this good, and they can always cash out. Some analysts have vested interests in not telling it like it is.,

Advertisers therefore don’t get the benefit of the kind of transparency investors should be asking for. 

It gets worse. A recent ‘Morning Brew’ article lays bare the sharp practices and unacceptable milking of advertisers’ budgets in the ‘content discovery’ world where the bad actors go out of their way to disguise where advertising really ends up.

This is as close to deception as our industry gets.

So, if very informed people such as Arete, Tom Triscari and ‘Morning Brew’ are trying to provide the sunshine to illuminate the egregious practices that cost advertisers billions of dollars in unjustified adtech fees, why can’t (or don’t) advertisers also follow the money?

The answer is partly ‘FOFO’, but the real reason is that advertisers rely on other parties to advise them on these matters, but that advice is rarely pure. The advertiser is the only true buyer in the market and they rely upon sellers to advise them.

The market and these issues are complex, delicate and require a degree of technical expertise, but solutions do exist with the input from the right impartial advisors who can clarify, simplify and provide alternative solutions.

There has, until recently, been a dearth of independent advisors who know where the bodies are buried and have the technical know-how to exhume them.

Advisors need to be part of the solution, not part of the problem. Any advisor who in some way benefits from the ‘money-go-round’ cannot provide the objectivity advertisers need. 

This situation has gone on for long enough and the various initiatives from ISBA in 2020 and the current ANA study are good steps in the right direction, but ultimately progress has to come from the advertisers themselves through their support for their trade body initiatives and, crucially, through their own endeavours.

They need to declare their own amnesties for their own people and external partners and dig in the right places.

They should read the reports by hugely expert analysts who are truly independent, such as Arete, and ask more questions about the workings of the market, not just their own small part of it.

The truth is out there and it’s ugly, but solutions also exist in better supply paths and technology that simply produce better results, more accountability and real transparency.

You may have to go off the well-worn path to find these answers but the journey is worth it.

It’s time to let the sunshine in, even if it’s dark and cold outside.

Apple’s upcoming software update set to disrupt mobile advertising industry.

 By Darby Jones - Media Strategist

Apple is planning a vast change to its privacy settings with its next iOS update, set to come out in early spring. This change will give users more control and transparency with regards to their information and will radically change the mobile advertising industry.

Each Apple device comes equipped with its own IDFA, or identifiers for advertisers, which consist of a unique set of letters and numbers that allow advertisers to track user interaction and use the information to form user profiles that are attached to that device. Think of an IDFA like a cookie but for devices rather than browsers. App developers often use Apple’s IDFA to target mobile ads and measure their effectiveness.

Apple’s update will essentially take a privacy setting that was previously buried deep in users’ settings and have it appear as a prominent pop-up when users open an app. Once the update comes out, a significant portion of users are expected to say no to allowing the app to access the user’s IDFA, severely reducing the effectiveness of targeted advertising.

Businesses that depend on mobile advertising are worried that the update will diminish the effectiveness of targeted ads due to having less information from fewer users across the globe. Companies in the space are attempting to figure out how to move forward in a way that complies with the new rules related to IDFA, and many are frustrated with Apple’s lack of clarity and communication on the matter.

The mobile advertising market is worth over $300 billion and Apple owns about 27% of that, according to Digiday. Some tech giants are worried this update is a ploy by Apple to further dominate the industry, while other companies are in agreement with the need to focus on privacy and protect user data.

Facebook has been especially outspoken regarding Apple’s privacy update, with CEO Mark Zuckerberg claiming that this new policy is “anti-business.” On Facebook’s Q4 2020 earnings call in late January, Zuckerberg named Apple one of Facebook’s biggest competitors and claimed the change “threatens the personalized ads that millions of small businesses rely on to find and reach customers.”

Days later, Apple CEO Tim Cook spoke at the 2021 Computers, Privacy and Data Protection conference and made no direct mention of Facebook or Zuckerberg, but clearly aimed his comments at Facebook’s attack on Apple. “We should not look away from the bigger picture,” says Cook. “In a moment of rampant disinformation and conspiracy theories juiced by algorithms, we can no longer turn a blind eye to a theory of technology that says all engagement is good engagement, the longer the better, and all with the goal of collecting as much data as possible.” The Washington Post predicts that the update will cause a “war of pop-up messages” between Apple and Facebook.

While Facebook has been particularly vocal regarding their disapproval of the Apple iOS update, Snap has proven to be much more cooperative. Snap chief business officer Jeremi Gorman said the company has been working with Apple to prepare for the changes, while also educating its advertisers and making long-term investments to use more first-party data for advertising. “Overall, we feel really well prepared for these changes, but changes to this ecosystem are usually disruptive and the outcome is uncertain,” says Gorman.

Unity Software, an American video game software development company, is also unsure about the future of their mobile advertising ecosystem. Per its earnings report, Unity expects changes to IDFA will affect the way mobile game developers acquire new customers and “how they optimize lifetime customer value.” Unity estimates a revenue loss of approximately $30 million, or 3% of revenue, in 2021 due to the Apple update. Upon releasing this report, Unity Software shares fell as much as 16% on Feb. 4.

While the exact outcome of the Apple iOS update is uncertain, the mobile advertising industry will surely be shaken. Many companies, like Snap, will adapt and comply with the changes for the sake of privacy, while others continue to fight against the change.

news

New York City…The reports of its death are greatly exaggerated”

by Andrew McLean

I’ve just spent an hour stuck in traffic on the F.D.R. and never been happier. It’s a Thursday night in Manhattan, the night when more business was done than the rest of the week. When restaurants and bars were packed with interns, associates, executives, and CEO’s of all industries. For those of us working in media, it was a wonderful part of the week for advertising gossip; hearing about new opportunities and exciting alcohol fueled big ideas.  

Then came March 13th and the Covid 19 pandemic. As much of New York City’s workforce retreated to the suburbs, there was that same horrible feeling we had in the weeks following 9/11. The difference being this was far less appalling in some ways, but rather than N.Y.C. fighting back it seemed the city we love was sick and retreated. People somberly scattered the streets of Manhattan, museums, restaurants, and theatres were deserted, and shops devoid of customers exposed their darkened windows. N.Y.C.'s once strong pulse grew weaker and weaker; it laid low as the lifeforce of the city--its workers--were forced to shelter in place. As weeks turned into months, the city that never sleeps was comatose. 

But as Jerry Seinfeld so eloquently wrote last week: “Real, live, inspiring human energy exists when we coagulate together in crazy places like New York City. Feeling sorry for yourself because you can’t go to the theater for a while is not the essential element of character that made New York the brilliant diamond of activity it will one day be again.”

He, and others smarter than I, knew this was again only a temporary state. N.Y.C. has too much power, energy, and wildness to give up and lay down forever. Seinfeld is right, this place will never just stop and residents should not be so quick to lose hope and abandon their city. We are New Yorkers and in spite of the tragedy that has plagued us these past six months, we are resilient. So tonight, at a rooftop restaurant close to Wall Street the bar was busy, if not packed, the tables separated but still double booked, and--despite the masks--was reminiscent of August 2019. Already, we are figuring out, slowly but surely, how to persevere. Yes, it missed the wide-eyed visitors whose absence hurts financially and emotionally, but it certainly did not feel like a funeral. 

However, a more sensible and more scientific measure of the economic return is the traffic. At 9pm the traffic crawled towards a darkened Yankee Stadium and New York drivers impatiently switched lanes, swore like sailors, and blared their horns and oh…what a sweet sound!

For twenty years New York has been my home and its energy, toughness, and bloody mindedness has become part of me. New York City…maybe you just needed a few months off. I sense, like the traffic, you are back and even stronger.    

Andrew McLean 

Inventus Media 

August 2020

Steaming into Streaming 

By Celia Spana

When I was a child in the early 2000s, my family would gather around the TV after dinner at 7:55, find our favorite spots on the couch, and prepare for the 8 p.m. showing of Survivor, American Idol, or Celebrity Apprentice. Before the takeoff of the Internet and streaming services, staying up-to-date with your favorite shows when they aired felt like a necessity. If you missed that week’s episode, then you missed the chance to talk about it with your friends until you caught the reruns. As streaming services have become more popular and provided diverse accessible content, subscribing to cable bundles for linear television just doesn’t make sense anymore.

America has been plunging into the future of on-demand culture. Amazon Prime makes online shopping easier by guaranteeing two-day delivery on all purchases. Uber allows any passenger to find a driver within a ten minute radius. Audiences are abandoning the cable TV bundle for more gratifying streaming services like Peacock, Netflix, Hulu, and Amazon Prime Video and their options are expanding with YouTube TV and Disney+.     ​   

Although more people have been cutting the cord the past five years, TV networks broadcasting through cable were expecting a major spike in viewers due to the presidential election and the Tokyo Olympics. However, with the pandemic cancelling the majority of content, cable channels are facing major potential decline in advertisement revenue.

Advertiser Perceptions reported that U.S. ad spending hit a low point in May and is expected to rebound from June to October. While the second half of the year will be better than Quarter 2, it might be a short-lived victory due to the economic decline that could run for the rest of the year. As the media marketplace is recovering, it is still facing significant pressure and television will be more susceptible to the poor health of the economy than smaller media. 

Before the pandemic, 40% of advertisement spending in the United States went towards TV commercials, while 45% moved to digital platforms. COVID-19 will likely accelerate this transition, especially with the postponing of multiple sporting events. Most companies are facing budget slashes for advertising, forcing major broadcast networks and cable channels to discount their commercial time. For example, this Memorial Day, Walmart opted for a short social media video instead of the usual massive display of promotions and sales on TV. It was an inexpensive production with a small film crew but included colorful eye catching animation to turn it into an effective advertisement. This could be the advertising method of the future: fast, easy, cheap, animated, and able to reach tens of millions of people through the Internet.

In the background of this transition in advertising, cable companies have been seeing a fall in subscriber numbers. In 2020, it was reported that only 42% of Millennials and Gen. Z subscribe to a cable TV provider. Last year, 7.2 million people chose to drop cable TV altogether and over the top streaming services (OTT) revenue grew 35% to $22 billion. While TV networks are suffering due to the pandemic, OTT is still expected to increase another 29% this year. 

There is a consistency in the consumer base for cable TV. Gen. X and Baby Boomers make up 49-51% of cable bundle buyers. It is speculated that middle-aged to eldery people will keep their subscriptions because they are used to the traditional television format. However, these percentages may decline with the lack of quality programs. 

       ​Yet, the competition for content becomes even trickier. With more people at home watching television, the demand for new material is stronger than ever. As HBO, Showtime, and other prime-time networks are able to pay disproportionally large amounts to creators, it is harder for broadcast TV to keep up. Outside TV, newer mobile platforms like Quibi and TikTok are featuring faster appealing entertainment with big names like Jennifer Lopez, Reese Witherspoon, Sophie Turner, Chance the Rapper, and Lizzo but are so far struggling to monetize all this content despite very high costs of production. The attractiveness of these apps to consumers are underestimated--although it is unlikely they will take down the OTT giants in the near future, they are marketing content of the future to audiences craving more by the day.  

In my household, the way we watch TV has completely changed. My parents will flip through channels, frustrated by the stale content, until someone suggests turning on Netflix. Whether we settle on a show we’ve watched already like Parks & Rec, the recent season of Ozark, or a new movie, it is more satisfying than the overwhelming void of empty content on regular TV. But we have to ask ourselves if there is no ad supported television how will all the content be funded and made. Sports without ads. Not happening anytime soon.

Left or Right - Political Ads come into view

​By Celia Spana

The COVID-19 pandemic has made political advertising in 2020 extremely unpredictable. With the perpetual confusion surrounding the virus, campaigns have faced hurdles due to social distancing and an increase in political ad competition. To cope with the uncertainty, political advertisers are rethinking their strategies to reach audiences across the United States.

This year, Integral Ad Science reported that 3 out of 4 Americans are engaged with the current political news cycle. Television broadcast stations—an industry facing a large ad revenue loss this year—are seeing an increase in ratings for news programs. Political campaigns are expected to spend around $3.3 billion to run advertisements on local and national TV. The nation's distress over the pandemic has given politicians a consistent topic of discussion within their ads whether they are proposing a new course of action, thanking essential workers, or criticizing their opponents. Relating the content to COVID-19 pandemic maintains their audience’s attention and shows they as a candidate are interacting with the major issues present in 2020.Additionally, now that in-person rallies and conventions are cancelled, Advertising Analytics has predicted that a significant portion of political ad dollars will go towards digital media as well as TV.       

In 2016, the political news sites CNN, NYTimes, Washington Post, and Breitbart noticed more mobile and online attention from consumers as the November election neared. In 2020, a similar pattern is expected, but with even more mobile and online views and clicks now that people are sequestered in their homes with more time on their hands.

This presents large issues for advertisers concerned about fraud and fake news. Election season correlates with a surge in digital ad fraud. Social media does not have a good reputation when it comes to presenting reliable information to the masses and it may be harder for advertisers to present their content to targeted audiences without interference. This raises the question of how agencies can protect their campaigns from fraudulent activity. 

With the pandemic, potential for fraudulent activity, and social unrest it will be hard to predict the impact on political campaigns and their corresponding advertising campaigns.  Advertisers are not the only ones concerned about the wildfire of fake news—according to IAS, 80% of Americans are worried about misinformation that can be spread through digital media. In the 2016 election, more fake news articles on social media received clicks from consumers than mainstream news sources. Most Americans do not want this to occur again and fear false information will corrupt the upcoming election.

Over the past few weeks, I have connected with hundreds of leaders at publishers, agencies, brands and tech companies. My evening hours have been spent reading countless research papers studying how past recessions have impacted our industry. I have become curious to uncover what we can learn and apply from past recessions that the advertising industry has faced, and overcome. 

It is important to me that I first acknowledge that the global health pandemic is priority number one for the world. My heart goes out to all of the front-line health care professionals who are fighting this war to keep us safe. And to all of the people working in countless essential businesses that we rely on and that I often take for granted.

Turning our attention now to the economic crisis that has been triggered is starting to cause a sharp downturn in the advertising industry. 

How bad is it?

Kantar surveyed 25,000 people in 30 countries recently. 7 in 10 people say that their household income has been affected or will be affected by the current crisis. People are scared.  

Last week, the IAB released the results of a recent survey of 390 media buyers, planners and brands. The headlines are grim.

24% of brands have paused all ad spend for Q2. Digital ad spend is down 38% and spend on traditional channels is down 43% in March and April. 

A recent survey of 2,200 marketers by Marketing Week also revealed that the majority of brands have delayed ad spending decisions.

Ad spend is down 33% on social media and 30% on paid search in March and April. It is no surprise that Twitter last week pulled its revenue guidance for the balance of 2020 and Facebook shared that it is seeing weakness in its ad business. No one appears to be immune to the impacts of Coronavirus. 

It can be tempting to look at GDP growth or decline as an indicator for the advertising industry. However data from the 2008 recession showed that the revenue declines for major agency holding groups were twice the GDP declines, and for twice as long. Agency revenue started to grow again only 9 months after GDP started to grow again. Martin Sorrell, then CEO of WPP, shared “we led into the downturn and we’ll lag the upturn”. 

A McKinsey report showed that it took until 2011 for ad spend to return to a level on par with 2007 due to the last recession. 2008, 2009 and 2010 were all down years compared to 2007. It took four years for ad spend to return to a pre-recession baseline. And 74% of ad buyers expect Coronavirus to have a heavier impact on the industry than the 2008 financial crisis.  

The cost of going ‘dark’

In 2008, Millward Brown shared evidence that 60% of the brands that went ‘dark’ during an economic downturn (no TV ad spend for 6 months) saw ‘brand use’ decrease 24% and ‘brand image’ decrease 28%. Brands that cut their ad budget at a higher rate relative to their competitors were at a greater risk of share loss. 

A 2001 analysis from Malik PIMS showed that an increase in spend on marketing and R&D was associated with business success during downturns. Kantar estimates that brands who go dark to save costs will see a 39% reduction in brand awareness and delay recovery after Coronavirus.

An IPA (The Institute of Practitioners in Advertising) study in 2008 reported that “Following a budget cut, a brand will continue to benefit from the marketing investment made over the previous few years. This will mitigate any short-term business effects, and will result in a dangerously misleading increase in short-term profitability. The longer-term business harm will be more considerable, but will not be noticed at first." The report also highlighted that “A brand judged to be on the way down, because it has fallen silent, will very rapidly see this manifested in word-of-mouth, which will accelerate the perception of failure.”

McGraw-Hill Research looked at 600 companies from 1980 to 1985 and showed that those that maintained or increased their advertising spend during the 1981 recession had sales that were 256% higher than those that didn’t by 1985.

Only 8% of the 25,000 consumers surveyed by Kantar said that brands should stop advertising. 

Businesses that continue to maintain share-of-voice and share-of-market during a downturn have shown a longer-term improvement in profitability that outweighed the short-term savings. 

A unique window for new heroes

Businesses who have dominant market share and have a higher marginal cost of acquisition for new customers may pull back spending during recessions. On the other hand, businesses with lower market share or lower marginal costs to acquire customers will use recessions as an opportunity to invest more in advertising. 

Brad Algate published a few examples in a Forbes story last fall about how recessions have been pivotal moments for brands to win market share.

Cereal: in the 1920s, Post was the category leader and significantly cut ad spend during the Great Depression. Kellogg’s instead doubled ad spend (marketing), introduced Rice Krispies (R&D) and profits grew by 30%. Kellogg’s went on to own the category for the next few decades.

Automotive: during the 1973 recession, Toyota increased its ad spend at a time when everyone had dropped theirs. Toyota went on to become the top imported car maker in the US by 1976. 

Restaurants: during the 1991 recession, McDonald’s dropped its advertising budget which Pizza Hut and Taco Bell took advantage of. Pizza Hut sales grew by 61%. Taco Bell sales grew by 40%. McDonald’s sales declined by 28%.

Technology: during the 2009 recession, Amazon grew sales by 28%. They continued to innovate with new products, like the Kindle, which contributed to more ebook sales than printed books on Christmas Day 2009.

One of the best quotes about advertising in a recession is from Wal-Mart founder Sam Walton. When asked, “What do you think about a recession?” he responded, “I thought about it and decided not to participate.”

How to advertise in a pandemic

During a recession, advertisers will use incentives to match the economic climate. Common strategies include promotions, short-term price breaks and to focus messaging on the value that a brand provides. A pandemic is different.

From Kantar’s survey, 77% of consumers say they want brands to talk about how they are helpful in everyday life, 75% want brands to talk about their efforts to face this situation and 70% want brands to offer a reassuring tone.

From the IAB survey, 63% of advertisers have already changed messaging. 42% have increased mission and cause based marketing. 

Advertisers are taking a long-term brand building strategy and are focusing less on lower funnel sales tactics. 45% have decreased performance based marketing. For example, Nike is using their ads to focus on the importance of social distancing. 

This is an opportunity for more creative partnerships with trusted publishers. These partnerships will focus on the development of content that is useful to consumers and for that content to be funded by brands in a tone-sensitive manner that trusted publishers are skilled at. 

A new approach to creative

A May 2008 Milward Brown paper titled “Marketing During Recession: Survival Tactics” recommended that the best way to leverage media spend during a recession is to put it behind high-quality creative and effectively making creative work harder. Across a variety of categories, brands and channels, creative was found to have five times as much impact on profit as did budget allocation. 

The global health pandemic that has triggered this economic crisis has introduced unique challenges to the creative industry that previous recessions have not prepared us for. Creative professionals are severely limited in the options they have to travel, gather and to develop content. 

Additionally, campaigns have gotten shorter given the uncertainty of the health pandemic and the need for brands to have tone-sensitive creative while continuing to be present versus going ‘dark’. The channels that allow brands to be agile, dynamic and responsive with creative will see more spend versus channels where creative is static and fixed.

Brands are iterating and innovating with digital creative on social media platforms in near real-time. Expect to see more brands choose to repurpose social creative for other channels.

Marketing mix is reset

After the last recession in 2008, the US ad market declined by 13%. Newspaper ad spend fell 27%, radio spend 22%, magazine spend 18%, outdoor spend 11%, TV spend 5% and digital 2%. Many traditional media channels did not recover as the shift to digital advertising accelerated post financial crisis. That begs the question about how this recession may permanently shift the marketing mix between various digital channels. Everything is now on the table. 

Media consumption has increased overnight and will likely stay high for the months to come. Web browsing has increased by 70%, traditional TV by 63% and social media engagement by 61% compared to previous levels.

13% of advertisers have already increased direct buys with premium publishers. 34% have increased mobile device targeting, knowing this is where consumer attention is today. 35% of advertisers have increased spend on CTV/OTT channels. 

Before Coronavirus, the global digital ad pie of nearly $330 billion was split almost equally between search, social and the web. After Coronavirus, regardless of if the pie is smaller or bigger, the split will be different than a third, a third, a third. What happens in the quarters to follow will influence that trajectory for each segment.

Social feeds are now ‘fear feeds’

A recent Harris Poll survey brought to light how consumers feel social media is impacting them. 79% blamed social media for amplifying fears. 78% had seen images of people fighting over products in grocery stores. 75% shared that the continual negativity on social media was making people scared. 

Facebook shared that WhatsApp usage has jumped by 40% and that total messaging across all of its products has grown by 50% in the past month. A report from influencer marketing platform Klear saw that users were posting 15% more Instagram Stories week-over-week, with an average of 6.1 per day.

The Facebook feed has become the ‘fear feed’. Despite good efforts from platforms to provide valuable and trustworthy information for reputable public health institutions, social feeds for 2.8 billion people are even more littered with sensationalism, misinformation and negativity. 

This worries me. My parents continue to quote stories to me daily that are clearly false. The only response I have is to continue to lecture them to not trust everything they read on social media. However, I am learning that parents don’t always listen to their kids. 

This issue of misinformation is more nuanced in countries where trust in public institutions is low, as consumers have come to trust their social networks more than their governments. For example, Facebook this week took down a post from Brazilian President Jair Bolsonaro where he claimed that “hydroxychloroquine is working in all places.” 

In Kantar’s survey of 25,000 consumers, national media came out on top as the most trusted information source, followed by government agency websites. Only 11% of people said they trusted social media.

Facebook announced $100 million of grants and ad credits that would be available to 30,000 eligible small businesses who use their platform. Google announced they would be providing $340 million of ad credits to small businesses. These generous moves from the platforms are going to put additional market pressure on local publishers. The duopoly will unintentionally crush trusted local publishers who will have a difficult time competing with ‘free’. 

Turbulence ahead and so are clear skies

After hundreds of conversations, hours of research and much meditation and contemplation, I see the turbulence ahead for the advertising industry and at the same time, see the pockets of clear skies as well. There are countless opportunities for brands and publishers who choose to take a long term view on their business and their customers.

There will be difficult business choices in the short-term that leaders will have no choice but to make. It is important to marry these with faith for a long-term trajectory that can be better than the baseline. 

As Winston Churchill said in one of the most trying times for our world, “never waste a good crisis”.

Thank you for your attention. Stay safe. 

INVENTUS MEDIA PROUD PARTNER OF GIVSLY - PURPOSE DRIVEN NETWORKING…15 April 2020

New Platform Givsly Purposely Connects Agencies And Marketers

• by Steve McClellan  @mp_mcclellan, Yesterday

A new purpose-driven platform for the marketing industry — Givsly — has officially launched nationwide.

The founder and CEO is ad-tech veteran Chad Hickey, who launched a previous iteration of the business last year known as Lucky Forks.

Givsly provides a way for agencies and others to secure virtual meetings with marketers they want to pitch new business proposals to. They get the chance to do so by donating to causes those marketing leaders support. Then can then request a virtual meeting with the prospect.

The company is positioning the platform as a win-win for both sides during the COVID-19 crisis, given that most business is being conducted virtually. It also helps agencies maintain a new business pipeline while providing assistance to non-profits, which are finding resources ever scarcer to acquire during the pandemic. Marketers as well are struggling and looking for new ideas.

More than 75% of platform users represent advertising and media companies. Agencies including OMD, UM and Spark Foundry have signed on to use the service. OMD, for example is supporting GlamourGals Foundation Inc. with investment, sales and marketing support and other industry expertise.

“We all have causes we care deeply about, yet professionals are busier than ever and have little time to think about how to make social impact,” said Hickey, who previously held senior roles at Placed and GroundTruth. “With Givsly, we're making it easier than ever to contribute while connecting relevant professionals to progress everyday business."

Givsly has an agency advisory board that includes Amy Armstrong, U.S. CEO of Initiative; Steve Williams, Global COO of Essence; Jeremy Cornfeldt, CEO of iProspect; Erin Matts, US CEO, Hearts & Science and Chris Boothe, CEO Spark Foundry.

More about the platform can be found here.

“Plus ça change, plus c'est la même chose “– the more things change, the more they stay the same

Andrew McLean

Inventus Media

4/13/2023

With 4 weeks to go until the upfronts, we are starting to see the players signal their positions and our pricing models grind through scenarios of supply and demand. However, this year will be different, and we see some significant changes, but it will remain a zero-sum game – some will win and therefore some will lose. The best description of the upfront is that it is just another futures market, except with more incentive to commit upfront. In recent years, with falling audiences in broadcast and cable, the upfront became a strategy to guarantee a weight of media for a commitment of spending. Staying out of the upfront was to risk paying more for less.

But this year we will see Netflix take CBS’s upfront slot and while this may be symbolic, we see it as having more significance. Recently it appeared the upfront presentations were more of an investor relations event than a pitch to the media market as the focus on new program launches faded. But the addition of ad impressions from CTV/FAST channels serves to give buyers new options and relief from ever-increasing costs and they are being welcomed with open arms by advertisers and agencies. After years of ever-declining supply and increasing demand the new definition of television – with better measurement – gives us a different combination of buying options.

What stays the same is that the negotiations will remain driven by efficiency, reach, and presence in must-see content. The strategy, as it has been since my first television spot buys in "Coronation Street", is to balance those three elements that dictate the structure of the buy. Netflix is already reminding us all that all impressions are not created equal with advertisers competing for presence in their newest content with demand only constrained by Netflix managing the pace of ad-supported homes growth. Then there is the sleeping giant of Amazon which has this year increased ad inventory to Prime Video, which already takes 3% of total viewing (source The Gauge Nielsen) and is already in 50% of homes. With #Fubo, Pluto, and Tubi we see more audience opportunities, and the days of playing “hunt the missing audience” are over.

The definition of television has now changed and must reflect that buyers are using their budget allocation tools to ascribe share across all the traditional definitions along with CTV, FAST, Digital Video, and now even short-form video. What remains is that by whatever description, the combination of large screen impact and quality content providing the platform for engaging, entertaining and empathetic messaging remains a preferred choice for advertisers.

For this year, some new players, some of the same players who don’t look the same, new sales pitches, new data to evaluate but the same end game – optimize the impact of an advertiser’s media investment on their business. Find the optimal mix of content, audience, and timing, and then negotiate the best terms of price, delivery, and position. The winners, as always, have the data, the leverage, and the confidence in the future from the experience of the past.