Brands will look to connected TV as the answer to dwindling traditional TV audiences when digital publishers make their pitch to advertisers during the IAB NewFronts next week.
There are a few things working in streaming, digital video and connected TV’s favor: Now that pandemic panic has subsided, brands that were hesitant to lock in ad plans at last year’s NewFronts are returning to the marketplace; and TV viewership is on the decline. Looking to capitalize on the momentum, NewFronts presenters from Amazon and Roku to Samsung and Vizio are bringing new opportunities for brands in the connected TV space.
With TV ad inventory more scarce than usual, there’s a new sense of urgency to gobble up streaming ad space, says Mark Book, senior VP and head of content at Digitas. The dynamic is giving more brands an opportunity to play in the market, he says.
“It will prompt deals to happen ahead of the curve and create a more equal playing field for digital-centric buyers as opposed to the larger TV package buyers,” Book says.
“You still have this broader trend, which didn’t change by the way, which is consumers just kind of moving, either expanding to digital video in addition to their TV consumption, or just leaving TV altogether,” says Pamela Drucker Mann, global chief revenue officer and president of U.S. revenue at Condé Nast, which will make its NewFronts pitch on Tuesday.
Connected TV and over-the-top video will certainly be the focus of many of the presentations out of Roku, Amazon, YouTube and Verizon, not to mention a few of the traditional media companies like NBCUniversal and A+E Networks, which will also use the time to show off their digital wares.
TV land grab
“The market is in a massive transition, and that massive transition is driven by a few things, including but not limited to the fact that there’s a real shift of audience from commercially supported TV to ad-free [over-the-top TV],” says Peter Naylor, Snapchat’s VP of ad sales in the Americas. “All those video dollars are trying to find a new home.”
Publishers are leaning into the increasing demand for streaming content with new ad offerings specifically for connected TV.
This week, Amazon gave a preview of how it plans to rev up advertising on Fire TV, which it says reaches more than 50 million viewers.
Amazon is looking to get more money from streaming partners who provide the channels and apps across its video platforms by offering new “sponsored content” ads. Streaming sites can pay to promote apps and shows in a prominent position on Fire TV. There are also new display ads for non-entertainment brands that appear as banner ads and screensavers on Fire TV.
Book says there is a growing interest among brands to get into Amazon’s e-commerce and content ecosystem.
Brands are also interested in the apps coming from the traditional media companies, which will have more ad space. There is Warner-Media’s HBO Max, NBCUniversal’s Peacock, Disney-owned Hulu, ViacomCBS’ Paramount+, Discovery+, on top of the Roku and Amazon platforms. Not all of them are NewFronts presenters, but they all loom over the annual ad haggle.
“Brands are looking to make large investments in Amazon Prime, HBO Max, Hulu,” Book says. “These larger partnership deals where the brand is integrated with custom content built for the programming.”
Samsung Ads is also coming to NewFronts. The device-maker has a CTV operating system that streams video to living rooms. Samsung Ads already announced new ad units earlier this week, like a “discovery masthead,” which will promote streaming content at the top of its TV app store. Samsung also has Samsung TV Plus, which is similar to the Roku Channel and IMDb TV, with ad-supported programming on smart TVs.
Roku is promoting its Roku Channel, and the company has been upgrading its programmatic platform and data to automate the ad sales.
Meanwhile, YouTube has been emphasizing its connected TV reach for years. YouTube has 120 million viewers a month who stream the app to TVs. The Google-owned video site is grabbing an increasingly greater share of marketing budgets, hitting $6 billion in the first quarter, which was an increase of 50% year-over-year.
Snapchat will present its NewFronts on Wednesday, and will have a lineup of Snapchat Originals, the shows that appear in the Discover media tab on the app. Snapchat also has augmented reality marketing technology to tout, and a growing class of creators who are investing their energy and talent into the platform.
One of Snapchat’s biggest updates in the past year was adding the Spotlight section, which is where it promotes short-form videos. Spotlight has been compared to TikTok, and Snapchat said 125 million people viewed videos there in March. Snapchat also said that marketers are committing to more upfront advertising deals, the kind that are the focus of NewFronts.
In the past year, brands tripled their upfront commitments, Snapchat said in its recent earnings, when it also reported $770 million in ad revenue in the first quarter, a 66% increase. “We’ll be doubling down on our outreach to video advertisers in just a few weeks when we present at the annual Newfronts conference to further capture the opportunity we see in video advertising,” the company told investors earlier this month in the earnings call.
The NewFronts kick off as the industry grapples with major issues, too, like privacy, data and the cookieless future. “There is the data piece. My ears are going to be perked up for what this cookieless future looks like,” says Jennifer Kohl, senior VP and exec director of integrated media at VMLY&R. “A lot of streaming is occurring on mobile, and we talk about ‘pop-up-palooza,’ you’re going to get all these pop-up things about whether you are going to allow Apple to take your data or not.”
The data question is a big one because of the release of Apple’s iOS 14.5 this week, which prompts users to opt into app tracking. The apps have to ask users to share data if they want to access their internet activity and apply it to personalized ads and services. Apple and Google are making changes that restrict this type of tracking on web browsers and apps.
Connected TVs are another frontier where data and consumer identity are a factor.
“We have some reckoning to do in the industry,” says Sheila Colclasure, global chief digital responsibility and public policy officer at IPG/Kinesso. “It doesn’t diminish the importance of data to curate a better experience for people; It does signal that all of us, me, the brands I serve, we need to have mastered data management, so where data originates and under what terms and what permission levels, all matter.”
Walmart, which has produced NewFronts in the past, but won’t this year, will be looking to understand the complexities of data.
“We are hungry to learn more about video offerings and that landscape at large, especially given the proximity to the bBroadcast upfront timing,” a Walmart spokesperson said via email. “Additionally, we are constantly looking for best in class measurement solutions and identify solves, which will become increasingly more important, and difficult, in a cookieless world.”
Data also seems to be at the center of a knotty rights battle going on between Google's YouTube and Roku. On Friday, Roku notified customers that it will stop distributing YouTube TV, its live TV offerings, while both sides dig in over negotiations over streaming carriage rights. The tussle has not affected the main YouTube app on Roku devices, and people who already use YouTube TV on Roku will still get it, but potential new signups won't see the app.
The fight is said to be over how YouTube TV and YouTube proper appear in search results on Roku devices, and what kind of data YouTube can access on its subscribers through Roku. In streaming ecosystems, every little bit of data and screen real estate is considered precious.
Values and representation
Also, brands will be taking a closer look at how they spend their money this year, making sure they use data ethically, and that they support responsible media choices. Advertisers are demanding more from media companies, too, to present their brands in safe environments, and to align with content that resembles their values.
“A lot of our brands right now are looking for more inclusive storytelling and more inclusive storytellers,” Book of Digitas says.
The big tech companies have made commitments to focus on diversity, equity and inclusion by reflecting those values in the content they create. “Value-driven shows” will be central to Snapchat’s NewFronts agenda, Naylor says.
“When it comes to representation, 50% of our hosts or leads on our originals are either BIPOC or LGBTQ+,” Naylor says. “So we’re really happy about that because it’s reflective of the audience.”
“Publishers have always been about talking about their priorities and their values,” Book says. “But this is more important than ever.”