7 post-pandemic lessons for the TV industry

After last year’s unprecedented changes in the TV industry, which saw a major pandemic-induced revamp of business structures to lean heavily into streaming, networks are looking toward a post-COVID future—but how will the adaptations of 2020 impact this year’s ad haggle? Despite the onset of a global pandemic, last year’s negotiations for ad commitments ended up closely resembling the decades-old practice of selling primetime inventory ahead of the fall season. Meanwhile, some of the ad innovations that were expected to see greater adoption were put on pause as brands stuck with the tried-and-true amid so much economic uncertainty. Will 2021 see those efforts regain momentum? To what extent can advertisers and networks expect a return to the so-called old normal? This week, Ad Age hosted its second annual TV Pivot event, a two-day virtual panel of industry leaders designed to explore the current state of the TV ad landscape and examine how streaming may reinvent the $20 billion upfront marketplace. Below are seven of the most critical trends defining TV's present and future, as identified by some of the upfronts’ most reputable and recognizable voices. Check out their insights below, and read more of Ad Age’s 2021 TV Upfront special report coverage here. Readers who missed out on the two-day event can also rewatch the daily sessions at any time, archived here. 1. IP is stealing the spotlight in 2021 In many of this year’s upfront conversations, IP—shorthand for “intellectual property”—is being discussed more widely than it ever has before, and the emphasis placed on it is likely to increase as audience fragmentation rooted in the linear-streaming divide ramps up. Ahead of this year’s fall TV season and in the coming years, “You’re gonna see a lot of leaning into IP and a lot of shifting and reallocating,” hypothesizes Jo Ann Ross, president and chief advertising revenue officer, ViacomCBS Domestic Advertising Sales. For example, when advertisers associate certain content with ViacomCBS, familiarity and access to storied talent and titles can give Ross a leg-up in drawing their attention, illustrating the company’s extensive portfolio that has recently spread to the streaming world with Pluto and Paramount+. 2. The shift toward streaming isn’t slowing down Last year’s widespread acceleration of ad- and subscriber-supported streaming platforms is one trend from 2020 that won’t be reverting to its pre-pandemic state, but linear remains a major powerhouse in the TV industry and will continue to hoard the lion’s share of audience reach in the near future. “We are seeing [content] consumption at about 70/30 linear to streaming, and in a couple of years, we are predicting it will be about 50/50,” says Laura Molen, co-president of ad sales and partnerships at NBCUniversal, which operates proprietary streaming service Peacock. But Ross of ViacomCBS believes that linear is “still a valuable marketing vehicle” that will continue to factor into clients’ ad strategies as a complement to streaming for years to come. “When clients are taking a bet on linear, they want something stable,” she says. 3. The infamous AT&T deal won’t impact upfront season The talk of the TV industry for the past couple of weeks has been AT&T’s titanic media merger with Discovery, creating a new entertainment entity that will encompass everything from CNN to the Food Network alongside all WarnerMedia operations, which first fell to the telecom giant in 2018 after its acquisition of Time Warner Inc. Lips are mostly sealed around the $43 billion deal, but those in the know say the merger—announced in the middle of this year’s upfront season—won’t have much impact on the annual ad haggle. “As for this year’s upfront, nothing changes,” Jean-Paul “JP” Colaco, head of ad sales at WarnerMedia, says of the AT&T deal. Jon Steinlauf, chief U.S. advertising sales officer at Discovery, is even more blunt about the how it will influence this year’s upfronts: “It can’t. It won’t. Maybe next year.” 4. Diversity is a business imperative One year after the murder of George Floyd at the hands of police, the importance of diversity, equity and inclusion initiatives in the TV industry has transformed in line with a shift in public opinion, taking conversations and actions on representation from a “nice-to-have” option to a cornerstone of pitches. And as networks shoulder more DEI responsibilities, advertisers are “speaking with their dollars” to those who show genuine progress, says Marianne Gambelli, president of ad sales at the Fox Corporation. Recognizing the power of diversity has gone beyond simply casting more people of color in commercials, though; it has also translated into a business boom for minority-owned networks. “For Revolt, there’s definitely been a monumental change,” says Michael Roche, executive VP of sales and partnerships at the Black-owned media company, who notes that Revolt has added 65 major national partners in the past year. The same goes for minority-targeted companies, says Donna Speciale, Univision’s president of advertising sales and marketing, who believes “all boats will rise” as brands’ attention shifts to minority-centric media. 5. Shoppable isn’t losing steam, but are consumers? One of the TV industry’s most buzzed-about ad formats of the past year has been shoppable media, allowing consumers to purchase a product or service directly from an ad, rather than being redirected to a third-party site. “There are so many different ways that you can use shoppable to advance your KPIs,” says NBCUniversal’s Molen, adding that since the onset of COVID-19, using internet-connected devices to interact and shop has become “second nature” for consumers. Like her company, whose PayPal-backed One Platform Commerce platform has been hedging its bets on shoppable ads, Molen is bullish about the technology—but new data suggests Americans might not be as all-in on shoppable as brands are. Just 36% of people are comfortable with buying something directly from an ad, a new Ad Age-Harris Poll survey suggests. 6. Addressable advertising is the medium to watch In the world of targeted advertising, little has been more buzzed about than the potential of addressability, a hyper-focused means of messaging for TV that is imminently due to move out of its experimental stages and into real-world applications. “Addressability is so important to the future of media,” says WarnerMedia’s Colaco, who hopes to have at least 52 million national addressable homes by the end of this year. “We think 2022 is going to be the year of addressability,” he adds, saying addressability and IP are his two keywords for the 2021 upfront season. While the technology isn’t ready yet, all eyes should be on it next year and beyond as advertisers grow to expect its use in a well-rounded media buy. “I really think the next two to three years are going to be revolutionary in the [addressable] space,” says Kim Kelleher, president of commercial revenue and partnerships, AMC Networks. 7. ‘Flexibility’ as a buzzword is best left in 2020 One word was louder than all others during the early months of the pandemic: flexibility. From dominating the conversation around the inaugural TV Pivot event to feeling overused and tired by year’s end, it became a catch-all inserted into every manner of conversation to underscore the uncertainty of 2020. “Flexibility is still being discussed on all sides of the desk,” says Peter Olsen, president of ad sales at A&E Networks, who says recognizing that the world has changed post-COVID will continue to be paramount in maintaining a flexible relationship with advertisers, especially as networks are in talks to make “16-to-18-month commitments.” And while many speakers agreed that the word will remain central to many upfront conversations in the near future, it’s hardly the word of the year.

7 post-pandemic lessons for the TV industry

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