Category: advertising

Where is this all heading?

I’ve been watching with deep interest the progress of various video platforms as they emerge and develop, from YouTube and Netflix to Twitter and DirecTV Now. Here’s a brief rundown of a few of them from eMarketer that should give you an appreciation for the current state of flux, as well as the huge potential for coming disruption in the marketplace.

It seems that first we had simple websites that provided a platform, notably YouTube and Vimeo. Then we saw the TV Everywhere approach from HBO Now, as well as non-cable providers like Netflix, Hulu and Amazon. There’s a move to applications that can provide video content, from sports leagues to Twitter and Facebook. But it is such a tangled web that there is no clear indication as to where it will all shake out.

I suspect that a combination of advertising strength with high-demand content will drive this initially. Those platforms with which advertisers are comfortable (YouTube, Facebook, etc.), and content that is both timely and popular (primarily sports), will be the leaders in the transition that is currently underway. This is a chapter that is very much being written, and companies will rise and fall depending on their ability to forecast and anticipate the trends. But this much continues to be clear: Those who control the rights to this content (sports, awards) will control much of the destiny, and those who must pay for licensing  those rights will face increased price pressure in the coming days (witness ESPN’s effect on Disney stock).

Discuss…

The shake-and-bake state of the media landscape…

Increasingly, the means of digital content distribution are being revised, altered and shuffled. As this article reports, cable providers are facing reductions in subscribers, and the outlook is not good. So what does this indicate?

It seems that, with every passing day, there is another video platform, phone app, or HDMI plug-in device that promise to wean you off of the exorbitant cable fees that you pay every month. First, it was telecoms, then it was Netflix, Hulu and Amazon, then it was the Roku stick and Chromecast. We are seeing a rapid fragmentation of how we receive video content, and that bodes ill for the traditional distributors.

A few things have transpired recently that hammer this point home. AT&T acquiring DirecTV, ESPN being a drag on Disney stock, Netflix and others producing more original content, and Twitter getting into a content deal with the NBA. This doesn’t even take into consideration the growing popularity of live-streaming, altered-reality gaming, and real virtual reality. As old-timers like myself become less important to the subscriber bases of legacy providers, and advertisers scramble to reach the youth demographic, money and eyeballs will migrate to new means of content delivery.

This is just the end of the beginning, if that. Things are moving very fast in this segment of the media, and a new, transformational technology is likely just around the corner. For now, I’ll go back to my DirecTV and watch some reruns…

One look at the future of digital media… on the sports page!

Being an almost-native Los Angeleno, I have adopted the Los Angeles Clippers as my hometown NBA team (sorry, Lakers). But in this LA Times article from the sports section of the newspaper, I was genuinely surprised to read about their negotiations and plans for airing/streaming their games in upcoming seasons. Their contract with Fox Sports has come to an end, and the new landscape of mobile viewing, digital streaming, and augmented screens have made it potentially much more complicated than in days past.

You really should read the article closely for mention of these considerations, but here is an excerpt which exemplifies the nature of what is involved:

Another possibility would be video streaming the game and the analytical data individually. A third alternative would be integrating the data onto the screen as part of the game feed.

What is conspicuously absent is any mention of virtual reality, which in light of recent acquisitions and investments, lead me to believe will be coming sooner than most expect. And if Time Warner’s awful experience with exclusive deals for both the Dodgers and the Lakers is any indication, I would expect all parties to be very sensitive about unnecessarily restricting viewership.

Finally, the quote I found particularly intriguing is this:

The content for the streaming feed would be produced independent of Fox through a third party.

It’s been my opinion that it was just a matter of time before the professional sports leagues and their owners realized that their share of the advertising revenue would increase substantially if they could provide it without the aid of a middle man. With companies like Facebook and Twitter providing live streaming, the necessity of a Fox or Time Warner falls to the wayside. Granted, at this late stage before the start of the 2016-17 season, it probably doesn’t make sense, but it is most certainly on the horizon.

In fact, the bigger question is whether the leagues themselves, or the owners individually, will become the producers and distributors of games and data. This explains much of the recent stock woes of Disney, which owns ESPN. Stay tuned.

Programmatic Advertising – what exactly is it, and how does it work?

If you spend any time in the marketing world, you have undoubtedly encountered the phrase “programmatic advertising” and – if you’re like me – scratched your head and pretended to know what it is. In an effort to educate my comrades-in-arms, I present to you a fairly thorough – if a bit dense – article on what it is and how it works.

You may have read about the ongoing battle between publishers and ad blockers. Since subscriptions are still a qualified success, and only in specific circumstances, digital advertising will continue to be an important part of any marketers toolkit.

“Although subscription video on demand (SVOD) and transactional video on demand (TVOD) have been successful, ad-supported content isn’t going away anytime soon, no matter the viewing device.”

In essence, it is an automated way for advertisers to identify potential customers based on their publicly available demographics and past buying behavior to target appropriate ads. The potential market is too big and the amount of work to reach them is too complex.

“In the ideal programmatic transaction, a user clicks on a website, and her internet address and browsing history are packaged and whisked off to an auction site. On behalf of advertisers, software scrutinizes her profile (or an anonymized version of it) and determines whether to bid for the right to place an ad next to the media she is about to view. If you’re looking for affluent women between 30 and 35 who own houses and dogs in a specific ZIP code in Dallas, you may hit a premium price. If you take a broader view—say, all viewers between 30 and 35—your pricing may go down, and the supply of viewers could go up substantially.”

This just scratches the surface, and you will need to be a bit patient in reading the article, but you may find that it gives you just enough understanding that you won’t feel left out when it comes to discussions of programmatic ad buying.

Good luck!

The trouble with advertising in the digital age

I was reading this article in the LA Times about how Hulu is integrating product placement into their programming, and then noticed an ad in the sidebar that was most certainly a function of a condition I have. I don’t talk about it, but have spent some time researching it on the web.

This got me thinking about something I’m sure we have all encountered. If you search for anything, you can bet that ads corresponding to your search will pepper every page that you see henceforth. Have toe fungus? You will see dozens of ads for Jublia and the like. Need a bathroom remodel? Every home improvement store and website will inhabit your web life for days to come.

Granted, there is a desperate effort to find ways to make money on the internet. Music succeeded (if you want to call it that) by licensing to legitimate sites like iTunes and Spotify. But ad blocking software is wrecking havoc on the publishing industry, and the DVR is proving problematic for networks (hence, the article mentioned above). It is also lifting the value of live, must-see programs, especially in sports. Just witness the deals that the NFL and NBA have signed recently.

Advertising is a necessary aspect of free programming, but we are very much in a transitional period where the blunt instrument of banner ads will continue to haunt us in our travels from webpage to webpage, until someone can figure out a way to do it better.

Any takers?

The changing landscape of television lead-ins

Here’s an interesting article from the CNN Money website about television advertising and the ways it has changed in the last 15 years (more or less). Indeed, the increasing use of DVRs and the rising popularity of streaming services like Roku and Hulu, have upended the very model that I learned when I was a television agent in the 1990s. No longer can networks rely on a show’s viewership to introduce new series and promote upcoming content.

One way it hasn’t changed as much is the desire for late-night programs that may lead into the next day’s offerings. Back in the day, Jay Leno was essential to The Today Show’s leadership in morning talk, and added pressure to ABC to abandon Nightline in favor of Jimmy Kimmel. And also explains why local late news is vital, as well. But this quote misses a larger point:

“Due to audience fragmentation, there aren’t many series that generate the kind of massive lead-in that virtually ensures sampling for new shows that follow them. CBS’ “The Big Bang Theory” and NBC’s singing competition “The Voice” are among the few that produce a big enough audience to help incubate newly hatched programs.”

The point being, it emphasizes the increasing value of unique, live event programming that encourage sampling. In particular, sporting championships like the Super Bowl and NCAA Basketball and Football Finals, will continue to generate huge rights’ deals, and explain why the programs following such events are seen as the most important to a network.

So, the next time you are watching the World Series, The Oscars, or any other popular live event, pay attention to what immediately follows – it will be a undeniable indication of that network’s priorities. And should also help explain why the deals for such events will continue to grow in dollar value.