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5 Takeaways to Help TV Sellers Navigate Changing Macro Conditions

Posted by Ashley J. Swartz on Mar 17, 2020 1:00:00 PM

5 Takeaways to Help TV Sellers Navigate Changing Macro Conditions

Changing audience behaviors and the infusion of data on both sides of the value chain are forcing programmers and distributors to evolve from pure content creators and infrastructure owners into technology companies, like it or not.

These companies are making tech investments that would have been unheard of a decade ago. Take NBCUniversal, which is betting big on its own streaming service instead of letting Netflix own the audience for beloved shows like “Friends” and “The Office” indefinitely. Or Dish and Sling, which launched their own vMVPDs to distribute live and on-demand linear TV over the internet.

The bottom line is that TV sellers are responding to changing conditions within the macro landscape in innovative and sometimes risky ways, which we explore in our “Decoding the Macro TV Landscape” video.

Here are five takeaways for broadcasters, programmers and distributors to help you navigate this ever-changing terrain.

1. We’ve already saturated the market with ads.

Time spent with media averaged 12 hours and nine minutes per day among U.S. adults in 2019, according to eMarketer. This means we’re at maximum capacity, and the business challenge isn’t about “net new” and mastering new devices, platforms and ad formats any longer. To grow revenue, sellers need to make advertising more impactful by creatively productizing, packaging and bundling the massive swathes of time and attention at their disposal.

2. Your focus has to be on optimization.

The focus of your ad sales and operations teams needs to be on optimizing and maximizing yield across your entire portfolio of ad products. So, don’t chase shiny new objects and make a costly mistake like over-indexing on addressable, for example. The CPMs are tantalizingly high, but if you sell all the addressable you can without understanding the implications, you might end up leaving revenue on the table by driving down the price of other valuable inventory.

3. Profitable revenue matters as much as growth.

For large, public companies, it’s not just about revenue growth; it’s about profitable revenue, which means that efficiency and automation are more important than ever. The infusion of data into our business means the wheels will fall off the bus if Excel is your only tool to manage your inventory. Invest in solutions that increase the efficiency of your teams and integrate data into your ad decisioning to make your processes less resource-intensive.

4. Guard against an ad tax.

Don’t allow the ad tax on your TV business (i.e., the increase in cost per transaction as a result of incremental fees paid to intermediaries) to creep to the ludicrous levels we’ve come to accept in digital. None of us will make it if we allow that to happen.

5. Remember that our problems aren’t unique.

The headwinds the media industry is facing are a version of a problem that much larger industries have confronted and overcome. In a nutshell, we need to develop better processes for selling more things to more people in more places while clients (or buyers) attempt to use data and technology to drive down our prices. Look to industries like manufacturing and retail for inspiration on how it’s possible to succeed at this. Our challenges are far from insurmountable.

To learn more about the macro trends that are transforming the business of television advertising, as well as the implications and takeaways for buyers, watch “Decoding the Macro TV Landscape.”

Macro TV Landscape