The 2019 Upfront: Commoditization, Commodification & Convergence

Setting aside Rosanne’s Twitter covfefe last week, chatter around this year’s upfront would suggest many brands are more bullish on TV’s collective and expanding value than in recent years. And on the heels of this year’s NAB, where programmers and tech vendors seemed conspicuously quiet, it begs the question: For the bulls, did convergence already happen? 

Certainly, the conversations underway between marketers and media owners have shifted from mere interest in “cross-screen” to managing engagement holistically across all audience streams; a marked evolution from just a few years ago when “multi-screen” was all the rage. 

Holistically harmonizing a TV mix, where the value of the “1:N” exposure model of linear TV federates with the one-to-any value proposition of OTT, is more agile and complete than ever before. The tools to drive consumer behavior from brand awareness down the funnel to product purchase are today available to marketers on a single deal sheet. 

From the endemic value of gross reach accessible through linear TV, to managing effective frequencies and geographic targeting in OTT, many advertisers, this year, are finding that TV is strategic again, not as “television,” but as “Total Video.” It’s not just a blunt force medium, it can also be a scalpel.

Convergence has happened, and this year’s upfront will likely produce its first substantive artifacts.

So, for those brands who are imagining “it” possible, what does convergence look like? And why do most people still seem to refer to convergence as something that will happen? It depends on what your view of convergence looks like, to be sure. Standardizing imagination is something of a difficult undertaking. 

But to the extent a marketer has come to understand the strategic value of OTT in the context of a TV media mix, convergence happened.

Alas, many expectations of visible convergence have been set against measures reinforcing a native bias for content: focusing on metrics relevant to traditional sales models, conflating value concepts like scale and scalability, and holding firm to the belief that content is still the only king.

Over the last few years, it’s been hard to not sit through a panel of experts at any pop-up conference where at least one person didn’t caution against the “commoditization” of content in this brave new world. I don’t know the context in which the first person used that word, but it has sense been an oft-repeated term, and somewhere along the way, “commoditization” became a malapropism for diminishing linear ad rates.

However, it’s precisely the commoditization of content that’s given programmers unfettered growth potential across IP distribution. They are no longer beholden to the legacy business models of distribution, and that matters.

By making content available through expanding nodes of platforms and devices, including direct-to-consumer apps, programmers have led consumers to see the means through which they watch content as interchangeable. If a consumer only wants ESPN, there are a lot of options for subscribing to ESPN content. Commoditization is a reality; some call it audience fragmentation. But OTT itself should be seen as a reconstitution of audience leaking from the traditional TV business stream.

Add to the commoditization of content, the commodification of data, which is to apply value to something which otherwise has no value. In an audience-driven campaign, it’s data which functions as a primary driver of ad decisioning; a second king of sorts.

But even the richest data on high-income auto intenders, for instance, is entirely inert and valueless (not necessarily costless) until it intersects with content in the moment of an ad opportunity, distinguishing its unique relative value to a specific campaign.  

The ability to commodify virtually anything within streaming environments provides marketers with the framework necessary to reimagine the tactical complexion of TV ad markets. 

In spite of the industry’s ability to stand up convergent business models, where content and data work symbiotically to create media’s new value structure, there remains some stigma of scale within OTT— low penetration, compared to pay TV; still fewer streaming hours than time spent with linear TV. How many times have you heard someone say something like, “You can’t achieve reach in OTT like you can in...?” 

OTT ad opportunities have a native reach of one. One single impression at a time, in an environment where common traditional TV adjectives like “long tail” and “niche” belie a certain bias toward content. 

This bias stems from TV’s origin as a reach vehicle, where “GRP” and “reach” are casually used interchangeably. GRPs are, of course, the mathematical product of cumulative reach and average frequency. Because ad opportunities within the OTT vehicle are natively addressable and purposefully scalable all the way to the point of message saturation (or beyond), brands are starting to understand that the scalability of consumer engagement within OTT is limitless. 

And with Nielsen including connected TV and OTT as part of their Total Audience Reporting services, advertisers now have eyes on their total video investments like never before. Equitable measures of efficiency and efficacy across each investment channel future-proof the industry against the splintering of audiences into perpetuity. 

Indeed, the yield of this year’s upfront will be interesting. The tools. The data. The workflows. The marketplaces. They’re here. Convergence has happened, and 2019 may very well be the upfront we really leaned in.

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The views expressed above are my own.