TV[R]EV Week In Review: At The Upfronts, The Empire Strikes Back; Charter Looking To Launch Linear Addressable Offering

1. At The Upfronts, The Empire Strikes Back

Digital advertising, once viewed as the inevitable winner in the battle against TV, is down, and if there was one theme during the upfronts this year, it was that the TV industry was more than ready to press its temporary advantage.

Much of what was being said is just a long overdue course correction. Digital has been given a free pass by the trade press for so long it’s about time that someone pushed back. So that when our friend Joe Marchese, Fox’s new head of ad sales, stood up at their upfronts and humorously pointed out that ads with sounds trump ads without sound—a pointed jab at Facebook’s three-seconds-with-the-sound-off-is-a-view theory-- we actually started clapping.

Other networks made sure to point out the vast difference between digital “views” and Nielsen “average number of viewers per minute”, building on Fox’s point from the 2016 upfronts that the World Series had 12 billion “views” last year.

Why It Matters

There are a couple of things going on here: there’s the increasingly arbitrary distinction between “TV” and “digital video”; the need for a unified measurement system that allows advertisers to compare apples to apples (rather than apples to elephants); and the advantage a legacy system like pay-TV has in terms of brand safety and immunity from fraud.

As for where the line between TV and video lies, that’s a tough one, as we’ve noted previously. More and more TV-like content (e.g., ten-by-tens) is being produced for digital video channels and the line between a 15 minute “short form” video and a 22 minutes sitcom is getting increasingly blurry.

Unified measurement is a way off, but much needed, especially as advertisers are waking up to the fact that (a) a lot of social media stats are self-reported and (b) it is in the interest of the advertiser’s own digital team to support these exaggerated statistics as a way to make their own efforts look good and to get more money for their departments. (Okay, so maybe nobody says that last part out loud, but everyone knows that it's true.)

Brand safety is a bigger problem. Facebook and YouTube are working to clean up their acts but their content needs to be policed in a way that TV content never does. That is not going away anytime soon either, at least on their open, user-generated platforms, which is why both are launching their own pay-TV services. (YouTube TV is already live, with original content on the way; Facebook TV is coming soon.)

Stopping Innovation

And while all this is good news for the TV industry, the downside is that this temporary victory is likely to slow down the pace of innovation, as the economic pressure necessary to create change is lessened. If it ain’t broke don’t fix it, and all that. That would be a mistake, in our opinion, as TV needs to innovate, needs to come up with an advertising and monetization model that matches the time-and-device shifting viewing of 2017 and not the linear-only viewing of 1977.

What You Need To Do About It

If you’re a TV network, don’t stop innovating. Figure out how to get your advertising offering to a place where it will work for the next 20 years. You don’t want five more years to pass while you’re still figuring out how to sell most of your inventory during the upfronts and clinging to that rapidly shrinking linear audience. Remember that Joe Marchese described Open AP as “baby steps”—you need to get to actual steps, and soon.

If you’re an MVPD, work with the networks to create the sort of ad platform the industry needs. Keep moving forward with your linear addressable plans. When enough MVPDs are on board, you’ll have a nice sized national market.

If you’re an advertiser, push your agencies, push the networks. Don’t just settle for :30 buys on prime time. Look into branded content. And follow P&Gs lead in terms of pushing the digital and social giants to be more accountable. But most of all, demand measurement standardization across all video. Look too, at services like iSpot that use ACR to supplement the Nielsen ratings.

2. Charter Looking To Launch Linear Addressable Offering

Charter Spectrum, the MVPD’s ad division, announced that it would be offering addressable advertising on the two-to-three minutes per hour it controls during network broadcasts. The program, announced during Spectrum’s New Front, will begin in New York and Los Angeles at the end of 2017 and expand throughout the rest of Charter’s footprint during 2018. (Or so they say. We've learned to take New Front "coming soon" announcements with a grain of salt.)

Why It Matters

Addressable—real linear addressable—is still a small piece of the market. It’s offered by Dish and DirecTV/AT&T who can offer advertisers a national audience and by Altice, who can offer the desirable New York metro area.

Charter’s entry makes the market much bigger and if Comcast comes on board (they are currently only doing addressable for VOD), agencies and MVPDs could work to create a national marketplace, which would certainly increase both the value and viability of addressable.

What You Need To Do About It

If you’re an MVPD, make it happen! It’s the future and you need to push the industry forward.

If you’re a network, look into how you might sell some of your inventory on an addressable basis. (Hint: It’s not all a race to the bottom.)

If you’re an advertiser, start playing around with addressable. Make some buys. The only way to master something is to try it and addressable is something you’ll definitely want to master, as it will play prominently in your future plans.

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