Month: June 2020

“There has been nothing ‘typical’ about this year’s political ad market,” said Martha Matthews, svp and group director of local activation for Dentsu Aegis Network, adding that even before coronavirus the primary was unusual as it was the most expensive Democratic primary in history with $1 billion in campaign media spend, of which $570 million came from Bloomberg alone. “There’s no question that the pandemic has disrupted this year’s elections.” 

Still, even with the multiple on-going crises, advertising forecasts this week predicted that political advertising will hit an all-time high this year. On Monday, Magna Global predicted that the 2020 election cycle will produce $4.8 billion in net incremental ad sales, up 24% from 2016 and a record high. On Tuesday, GroupM echoed that sentiment with its ad forecast, predicting the highest spend ever this year estimating a total of $15 billion in political ad spending, up from $8 billion spent in 2018. 

“Spending could be even higher,” said Matthews, despite being often asked by advertisers if a decrease in political spending is expected due to coronavirus. “Physical distancing isn’t allowing for typical in-person campaigning — everything from big campaign events with large numbers of people to door-to-door canvassing. The money typically used to support this ‘boots on the ground’ campaigning is being shifted to media spending.”

Magna expects that while all media channels will benefit from the predicted increased political spending, digital media will grow the most and hit $1 billion in political ad revenue for the first time this year. GroupM, meanwhile, sees more than half of the $15 billion it expects to be spent on political ads to go to local TV and be concentrated in swing states. 

That said, Biden pulling back on TV ads in the spring isn’t all that surprising. “Political ad spending is typically at its lowest point in the springtime,” said Matthews. “Historically, 79% of political spending comes in the back half of the year with 67% being placed between the general election window opening in September through the election in November. Most significantly, 30% of all political spending takes place in the last three weeks leading up to the election.” 

“There’s usually primary ads and then you do usually see a dip,” said Michelle Millar, vp and group director of media and activation at ad agency Hanson Dodge. “But this year is different because the ad market itself is seeing a decrease, yet political advertising is seeing such an overwhelming increase.” 

As Trump has increased spending on television again he is “playing to his base,” according to John Cassilo, data analyst for Fabric Media. Per iSpot data, Trump has garnered 789 million ad impressions since March 1 with 63% of impressions on national linear TV versus 33.5% on local TV. Biden has generated 395.3 million impressions with 26.2% on national live linear and 69.7% of impressions on local TV during the same time period.

While Trump has returned to television on channels like Fox News, HGTV, CNN, CBS and the Food Network, since early May, Biden has remained quiet on television. Doing so is likely a strategy beyond just the coronavirus now. “Biden going dark [on TV] has likely been a response to the current social environment,” said Millar. “He’s doing a ton of fundraising so there are still a ton of social ads out there for that. It’s almost as if they’re saving that war chest for after the DNC.”

Spending more now could also be a waste, according to industry observers. “There are so many dynamics right now,” said Michael Horn, chief data officer at Huge, of the volatile political ad market. “With the nomination locked up for both, the question is what are they trying to drive? The earned media around coronavirus and the protests will overwhelm anything they put in the market.” 

Industry observers expect spending to significantly increase in the fall, which is typical. That said, while the market would generally be more competitive in the fall, as advertisers compete for available inventory, the uncertainty of the Upfronts season as well as the uncertainty in when big brand advertisers will start spending as they had been prior to coronavirus could make for a more fluid advertising marketplace this fall.

That could give political advertising “more flexibility to adopt and wait and see approach because there’s more inventory available that’s not taken up by brand advertisers,” said Horn, “[Brand advertising] could stay cool until after the election. If the rates are lower and there isn’t pressure to lock in in the same way we could see a higher volume of political advertising.”

Soon-to-be AT&T CEO John Stankey can joke that the decision of whether to subscribe to HBO Now or HBO Max is an “IQ test.” But it doesn’t take a Mensa membership to see that WarnerMedia does not need three separate HBO-branded streamers. In fact, WarnerMedia is phasing out HBO Go and will move those subscribers to HBO Max and it will rename HBO Now to HBO. Still, that’s one app too many, considering HBO Max offers more programming for the same price as the other namesakes.

“We often see certain changes like this when one service is being replaced by another and you have to delicately migrate customers from one to the next. So my sense is they’ve always had a plan and a roadmap to sunset HBO Go and introduce HBO Max,” said Jake Hancock, partner at brand consultancy Lippincott.

Problem is, WarnerMedia did not set out on this road with a fresh set of tires. Unlike Disney and NBCUniversal, which have rolled out all-new streaming properties in Disney+ and Peacock, WarnerMedia opted to build its flagship streaming service on top of its existing TV-and-streaming footprint. The move to make HBO Max available to HBO’s TV subscribers and HBO Now subscribers was meant to give HBO Max a head start, but it created a branding headache. Here’s a timeline to help clarify:

• In February 2010, HBO introduces HBO Go to wade into the nascent streaming market while tethered to traditional TV.
• In April 2015, HBO debuts HBO Now, a separate streamer to cater to cord cutters without compromising its pay-TV carriage deals.
• HBO strikes deals with other companies like Apple and Amazon to sell HBO Now subscriptions to quickly accrue more subscribers.
• Following AT&T’s acquisition of Time Warner, the newly formed WarnerMedia announces HBO Max, its foray into the streaming wars that will rely on HBO’s brand recognition to help it compete.
• To compete in the streaming wars, WarnerMedia sets out to get pay-TV providers to make HBO Max available at no extra charge to their existing HBO subscribers, i.e. the people with access to HBO Go.

Looking back, many of these moves still make sense. Seemingly every other major TV network has their version of HBO Go. Any TV network looking to make a direct-to-consumer play has had to create a separate streaming service — AMC Networks’ Shudder, ESPN’s ESPN+ and NBCU’s Peacock. WarnerMedia has even succeeded in getting pay-TV providers, including Comcast, to distribute HBO Max, which appeared to be one of the service’s biggest early roadblocks.

But, before HBO Max can emerge as WarnerMedia’s singular streamer, the media company needs to deal with HBO Now’s tangled distribution strategy. Selling HBO Now subscriptions through third parties like Amazon and Roku may have helped to acquire subscribers, but it appears to hampering the company’s attempt to convert those subscribers into HBO Max users.

Ahead of HBO Max’s launch, WarnerMedia had said only people who subscribe to HBO Now directly through WarnerMedia have access to HBO Max. But it has been expanding the option to indirect subscribers. People who purchased HBO Now subscriptions through Apple have access to HBO Max. 

However, those who have purchased through Amazon and Roku do not yet have access to HBO Max. WarnerMedia has yet to sign a deal with either company to distribute HBO Max on their respective connected TV platforms. That appears to be foiling any effort by WarnerMedia to finally consolidate its full array of HBO streaming properties into HBO Max once and for all.

Until WarnerMedia is able to sort out distribution with Amazon and Roku, the branding headache will persist. You can already imagine the confusion even after the culling of HBO Go. So if people get HBO through their pay-TV provider, they should use the HBO Max, not the HBO app? Because the HBO app is for people who don’t get HBO the TV network? Yes, exactly.

Confessional

“The more diverse parts of companies are the bottom of the rung. We’re the one who create the content and create the product. But the biggest problem is the lack of diversity at the top. They are the ones profiting most directly off of black culture, and a lot of them haven’t done the work to try to educate themselves on racism. That’s the problem.”

— Black media employee on industry’s diversity issue

Stay tuned: Production restarts then stops?

TV and movie production in Los Angeles was allowed to resume starting last Friday. However, soon the situation could reverse as the rate of coronavirus cases in L.A. County has remained high and has put the county on California’s watch list.

The potential that a second wave would push governments to reinstitute shelter-at-home orders has already put producers on edge about returning to work. At least some producers have been planning to ease back into projects with five- to 10-person crews at first and then expand from there.

“It would be premature to think everything would go back to normal overnight. This will be a months-long process,” said one producer.

Even if California does force Hollywood to go back on hiatus, producers could take their shows on the road to states like Florida that has been more lax with their restrictions, but has also lately seen an uptick in cases. But doing so could put their crews at risk and contribute to a resurgence of the virus.

“I would never stand up a shoot in Florida. I grew up in Florida. Even if it was completely open for business, it would be irresponsible to do that right now,” said the producer.

Numbers don’t lie

$100 million: How much money YouTube will spend to support Black creators.

35 million: Number of people who have watched Will Smith’s Snapchat show “Will From Home,” according to the platform.

14%: Share of national TV ad dollars spent in 2020 that will go to digital extensions like Hulu and Roku, according to GroupM.

10%: Increase in the money that advertisers will spend on digital video this year, according to Magna.

Quibi watch: Trouble at the top

Another week, another damning story about Quibi. 

Quibi founder Jeffrey Katzenberg and CEO Meg Whitman have had a rocky relationship that led Whitman to present Katzenberg with a list of problems in May 2018, according to The Wall Street Journal. Their relationship has repaired enough, though, that Whitman was able to convince Katzenberg not to name the app “Omakase.” But it may be headed for the rocks again with Quibi on pace to fall well short of its first-year subscriber projections.

For those trying to keep track, here is the litany of other issues that have dogged Quibi’s debut:

• Less than two months after launch, Quibi decided not to renew some shows, discussed changing others and canceled series that had yet to be produced, according to Bloomberg.
• Quibi’s brand-centric advertising strategy did not stir up enough interest in its programming, and its head of brand and content marketing Megan Imbres left the company a few weeks after its launch.
• Quibi’s roster of “Daily Essentials” shows have proven to be “not that essential,” in Katzenberg’s words.
• Unimpressed with Quibi’s viewership so far, advertisers have asked to defer their payments to the company, according to The Wall Street Journal.

And yet coronavirus is claimed, by Katzenberg, to be the real reason for the service’s struggles.

What we’ve covered

Splitting TV’s upfront market in two is not so clean-cut:

• The Association of National Advertisers has called for the TV upfront to move to a calendar-year model.
• However, some advertisers are sticking to the traditional broadcast buying period, which may make a mess of the upfront market.

Read more about the TV upfront here.

Snap gives its original shows a boost:

• Snap has unveiled a slate of new and returning shows, including its first series that incorporate its augmented reality technology.
• Snap has also begun backfilling shows with Snap Ads, which has helped to increase show makers’ ad revenue.

Read more about Snap here.

TV networks try to use weak ad market to settle delivery debts:

• With lower advertiser demand and more inventory available, TV networks have an opportunity to make up for ads that failed to reach enough viewers.
• However, getting advertisers to agree to make-goods right now can be a negotiation.

Read more about TV networks here.

How Vox Media developed new programming remotely:

• In the latest episode of Digiday’s The New Normal, Vox Media’s Chad Mumm explained how the company has adapted to remote production.
• He also explained how “Explained” came to be on Netflix.

Read (and see and hear) more about Vox Media here.

What we’re watching: Dave Chappelle’s “8:46” on YouTube

What we’re reading

Black producers call for more diversity in entertainment industry:
The leadership ranks in entertainment, like seemingly every other industry, has failed to adequately represent the diversity of its workforce, not to mention its audience. The Wall Street Journal spoke with Black producers about what needs to change in the entertainment industry, starting with putting more Black people in decision-making positions.

Disney’s internal streaming war:
Disney is having a hard time bringing Hulu’s engineers into its larger tech team, according to The Information. The issue could complicate Disney’s ability to put all of its streaming services — Disney+, ESPN+ and Hulu — onto the same streaming platform, which would make it easier for Disney to manage those properties.

Yann Le Bozec, Croc’s EMEA marketing director, said in the most recent edition of Digiday+ Talks, a series exclusively for Digiday+ members, that social media became the primary destination for Crocs when advertising the brand during the pandemic.

It also became a great medium for Crocs to start actively listening to fans of the brand, as well as getting in front of new communities to widen engagement with new potential customers.

The messaging and images posted on those platforms have needed to change, given the current climate. However having three months to get the marketing team’s feet back on the ground, Le Bozec said that they are prepared for the new normal and have developed a timeline for messaging that will get the brand back into view, and on the feet, of customers.

See the event video and the slides below.

Staying agile and getting back into action

Acting fast by pausing marketing strategy at the start of the pandemic was not the only point at which Le Bozec said his team had to be agile. He said his team had to figure out how to make any existing marketing materials and promotions work for the current environment. That meant holding off on posting any images of people outside their homes and in public settings.

This also meant leaning heavily into “work from home” messaging and creating new social-first campaigns, he said, which included a series of branded gifs on Instagram Stories.

Forward looking at the recovery period, Le Bozec walked through how his team is preparing for every stage of reopening and what brand messaging and images would fit best in those scenarios:

• Under quarantine: “Need comfort? We deliver.”
• Quarantine lifted: “Good feels and good deals.”
• Businesses and schools resume: “A fresh pair for fresh air.”
• Large gatherings resume: “Come together as you are.”
• Full recovery: “Happy feet are here again. And here for a deal.”

Croc’s approach to TikTok and other social media platforms

Le Bozec said that with the rise of consumers using social media while in lockdown, these platforms are now top of mind and his team has begum building social-first, timely campaigns as a result.

While Instagram, 818,000 followers, remains the place where Le Bozec said his team engages with fans and consumers the most (either through liking and commenting on posts or speaking with them through direct messages) TikTok, 191,100 followers, has become an appealing place to drive content-based campaigns that his team can have a heavy hand in controlling and leading.

• “There are some opportunities in paid and advertising, but content creation is something that we can directly influence and we can really put in place quickly,” he said. These content campaigns include challenges and contests with app users that have yielded a lot of organic engagement with the brand and its hashtag. 
• One contest was the $1,000 Crocs Challenge, which involved fans posting custom versions of Crocs that could be considered high-end. The winner was given $1,000 worth of Crocs and that challenge hashtag received 19 million views while 40,000 videos were created using the hashtag. 
• The other benefit that Le Bozec said TikTok has by nature is its connection to the Gen-Z consumer as well as being in global markets where the Crocs brand may not be operating. 

Croc’s influencer strategy 

Le Bozec said that his team works with micro influencers and celebrities that already have proven to be fans of the brand. “Our celebrities and influencers are buying crocs before we’re gifting them,” he said. “That really shows the authenticity of the brand.” But the real success stories that come from working with influencers and celebrities are when Crocs works with unexpected people. 

• Post Malone is one celebrity that has collaborated with the brand. He had three different limited edition pairs of crocs that use the singer’s album art and each iteration of the partnership has sold out. 
• Right before the lockdown, the company also announced a collaboration with Kentucky Fried Chicken that was launched during New York Fashion week. The shoes they created looked like KFC’s chicken buckets and had charms (jibbitz) that plug into the holes of the shoes that looked like fried chicken. The unique partnership, he said, led to an increase in media coverage. 
• These types of partnerships not only “increased our visibility” but they “targeted a new type of audience,” Le Bozec said, which, he added, is a big goal for the company. He said that because authenticity is key for the brand and they want to reach new potential customers, his team has been focusing on growing partnerships with more micro influencers, rather than solely working with big corporations or celebrities. “We realized that we have a lot of micro influencers that operate in different communities and there is a clear connection between those influences and the community they’re in,” he said.