Month: May 2021

Speaking at Digiday’s Future of Work: Diversity, Equity and Inclusion forum last week, Samuels said he was heartened by a more recent uptick in support from brands, citing AT&T and Comcast as businesses that have shown solid commercial support, but that the fundamental economics of running a Black-owned media company remains an uphill struggle.

“Black-owned media is on the brink of extinction,” he said. “Many of us have been fighting this idea that Black-owned media only makes up 1% of the marketplace. And to make up 1% means you’re basically extinct. If we saw whales and tigers on the bring of extinction we’d be screaming, right? So we’re screaming, and looking out to the marketplace and advertisers and brands and saying, guys you got to be screaming too.”

Last spring Revolt switched from publishing 100% hip hop-focused content, to 80% social justice content, a move which caused its audience to more than double in size, but its ad revenue to tank, according to Samuels. The business also can’t fall back on other types of steady revenue streams due to lack of distributor take up.

“You’ll be hard pressed to find a bunch of distributors with more than two or three Black owned media channels. So if you can’t get the ad revenue and you can’t get the distribution, then the only place where we’d be able to compete and is by saving cost,” he added. A difficult task when creating high-quality TV content. It’s not about giving handouts for charitable causes, it’s about fixing the infrastructure which has placed black-owned media businesses at such a disadvantage, added Samuels, and injecting investment that puts them on a level playing field to compete.

One of the knock-on effects of this scarcity of investment is that Revolt is often compared — by its creative talent — to other white-owned media companies that can afford to pay them handsomely. That can lead to misunderstanding and in-fighting within the Black community, he said.

“Black-owned media companies sit on the top of a black creative value and supply chain. So there’s a negative trickle-down effect into the community and the people that we work with,” he said. “And then what ends up happening is because Hip-Hop is in such demand, they’ll find themselves in mainstream [media] places that have an abundance of money, or not operating out of scarcity. And that creates a blowback on us: ‘How come when I go to the white media companies we get this type of treatment, but when we come here, we don’t get paid the same.?’ I don’t think that they understand that we are all stuck in this cycle of scarcity.”

Accountability, measuring diversity, collective responsibility:

During the forum’s interactive workshop session, execs shared their ongoing challenges and frustrations under Chatham House Rules, which lets reporters share sentiments expressed without using names, titles and organizations. Here is some of what those execs had to say:

On accountability
“There has to be a strategy and an association with those things, you have to have resources — dollars to invest in programming or training for the entire organization. So it’s not exactly how you start, it’s how you finish.”

“I’m hopeful that a lot of companies are finally taking the approach that there is a need for a long-term strategic approach.”

Measuring diversity
“There is a data gap in terms of measuring diversity and inclusion. What we end up finding is that the exclusion of that information from datasets and not embracing the discrimination, it’s actually exacerbating it.”

“Look at your numbers and make sure that it’s looking like your customer base and the people that you’re trying to reach as a whole.” 

Putting people of color in leadership positions
“We need to start seeing more people of color in leadership positions, period. To do that, executives and hiring leaders need to open the aperture.”

Supporting employees
“Mentorship is such a powerful avenue for a lot of developing executives and managers.”

“Make some connections, expand your personal network so that you can get to know people who do not have the same experiences as you to broaden your own horizons and maybe open up some opportunities for those folks as well.”

“It’s not easy being the first. And I think that for a lot of companies, there are a lot of firsts up there. In that instance, the best expert in terms of how to manage this, in that instance is going to be the employee that you hire.” 

“Allowing people to share and then responding to what they’ve shared builds trust. So you have to have some trust built in order for people to feel safe.”

3 Questions with Erica Volini, Global human capital leader for Deloitte Consulting

A Deloitte report showed 5.3 million women lost their jobs during the pandemic, taking us to a 33-year low, how can we recover from that?
In order to address it, first of all, let’s recognize that this is a crisis. Women are not only a significant portion of the labor force, but you’re losing diversity and perspectives that having people from different backgrounds brings. And I think that’s incredibly important. The most obvious answer is to invest in different types of childcare and eldercare. If we think around the world, women are still responsible for providing the majority of the childcare and the eldercare. And so organizations need to think about how they’re going to really lean into the flexibility that the pandemic has created, how are they going to create more flexible work environments and give them more choice in terms of how they do their work, when they do their work and where they do their work. We need to take advantage of this moment.

So although the pandemic has caused this crisis, the aftermath could actually help drive meaningful change for women?
The pandemic has shed light on how different ways of working can actually lead to improved productivity. So now this isn’t just a conversation about helping an individual employee out, it’s a conversation around how we can explore new ways of working to unlock productivity. And I think that’s the conversation that needs to shift. I’m excited that we’ve seen improvements in productivity, because now we can make this a business conversation, and that working in different ways, on different schedules can actually be beneficial because it aligns to a human’s needs, and therefore allows them to give their full potential. And when a human gives their full potential at work, that is going to translate to more value.

Should the way businesses have traditionally measured productivity change too, to cater for this?
We do need a different way of managing productivity. And we need to start treating it as outcomes: what are you delivering toward our business strategy, versus just the output that you deliver on any given day. If we’re going to really commit to hybrid work, and different ways of working, we have to change our performance management processes, we need to change our compensation processes. We need to change some of our policies to accommodate the fact that we’re going to measure people differently. That’s that’s the other big shift that needs to occur.

Number’s don’t lie

• 67% of 32,000 adults polled globally said say they have been forced to make a compromise between their work and their personal life because of the impact of the pandemic — particularly women and parents. 
  [Source of data: ADP’s People at Work 2021: A Global Workforce View report.]
• 73% of 31,092 employees across 31 markets said they want flexible remote-working options to stay.
  [Source of data: Microsoft’s Work Trend Index survey.]
• 26% of 1,258 parents said they would consider vaccinating their kids, 41% said they will wait, and 33% said they will never vaccinate their kids.
  [Source of data: Invisibly’s Realtime Research tool.]

What else we’ve covered

• As the pandemic has shaped the future of work over the past year, the content role of CMOs has become even more urgent, as the narrative around daily business and how it is conducted has evolved so suddenly and dramatically. “The corporate narrative had to be more agile, and more human. Agile because we had to constantly pivot to recognize current events, and do so sensitively. Human because, like very few times in history, we were globally in the same boat,” said CMO of Sykes Enterprises Ian Barkin.
• Ergonomic professionals have pointed to a rise in neck and upper body discomfort from using laptops and uncomfortable furniture, while too much screen time is fuelling mental as well as physical health problems. The impact can be more sickness and absenteeism, less productivity and an overall negative impact on workers’ wellbeing. But in a remote-first world, who is responsible for health and safety of home work set-ups: employers or employees?

  This newsletter is edited by Jessica Davies, managing editor of Future of Work, Digiday. For story pitches please email jess@davies.com.

“The five pillars we’ve established are important to almost every client who feels like advertising should be purposeful and have some goal that goes in complement to help me get more customers or sell more product,” said McDonald. “Not that any of our clients have said ‘I’m OK with 20% of my budgets being diverted to suitability issue or DE&I initiatives.”

Marketers have told GroupM execs they want both. As McDonald explained: “Clients want 100% of what they had before but they can use the creative messaging or the delivery mechanism to make it do something else too.”

For decades, companies have been told to put shareholders first. Now, even their largest shareholders are challenging that belief. Digiday caught up with McDonald to understand how he plans to help clients respond to those expectations. 

Why make responsible media an area to focus on now?

We were doing all five of those points already but they weren’t all organized or held to the same rigor and measurement. We had the first chief brand safety officer inside an agency back in 2016, for example. 

Even as recently as February, we launched the data ethics compass to help clients understand whether the choices around the data they use aren’t just legal, but morally right too. Marketers can’t just use data because they can. They need to really think about whether stalking someone online for the next two weeks because they looked at a pair of shoes actually makes that person feel good about making a decision about that brand at a certain point. 

Does that mean advertisers are beginning to accept broader social responsibilities?

Every client we speak to is focused on diversity and inclusivity, whether that’s how they can make sure their dollars are going toward more diverse audiences or targeting diverse owners like Black or female-owned media owners. There’s also a realization among clients that disinformation can’t have the same equal access opportunities as quality journalism when it comes to media dollars. Because if you leave that then you don’t challenge risks to things like democracy and sustainability. It’s time for advertising to really step up and do its part. We should’ve done this right the first time.

Sounds similar to previous pledges. What’s different?  

Companies have made promises in the past, but now there’s more pressure from their stakeholders to show how they’ve made progress. That’s changed forever.

In the past, clients said these things emotionally, or directionally. Now, we’re getting targets. So instead of saying ‘GroupM we should be doing this’ or ‘we should be heading in this direction, they’re saying ‘we want to be at this point, by this time’. That level of specificity has completely changed the conversation with every client. They’re saying to us that by the end of 2022 they want to be at a certain point and then further along the year after. 

Any examples?

Imagine a bank that decides that economic inequities drive social inequities so they themselves as a bank has set a big, lofty target to close the gap. This is a public statement from [GroupM client] JP Morgan Chase where [they’ve] decided they want to close the financial inequity gap among Black communities. Needless to say, as we have conversations with them they’re insisting that the team who works on their business reflects the marketplace of customers who they speak to so our teams need to look at that. They’re asking for the media plan to have proof evidence in it so that they can see their media dollars aren’t going to into the same well of media partners. 

We have another client who has set the goal of being all about sustainability. They’re asking for a standard of sustainability that all of us at the agency have to live to. They asked for our carbon footprint in the brief. They wanted to understand what we’re doing to behave the way they’re behaving because they’re saying from a chemistry standpoint if we don’t align with them and aren’t living that experience with them as a company we’re not the best agency partner. They’ve extended that to say everyone who we work with that is like us will get preferential treatment. 

What does this mean for how GroupM works with media owners? 

Our push here has been finding those media partners who will join us on this journey. We did the deal with Ozy TV last month for multiple reasons: the first was the company’s commitment to sustainability; the second vector was the company’s lens on responsible media coverage and storytelling is powerful; the third point was the company is innovative with its audience — and it happens to be Black-owned. We should look for more of these partnerships. Our clients are happy because their ads are in innovative places, that are trusted environments and in doing so are able to do the things they should’ve been doing all along. 

What does that mean for GroupM as a media agency?

It causes GroupM, from an investment standpoint at least, not to be about using our scale to drive prices down. You can’t call a partner a partner if you’re job with that partner is to get more out of them but for less than you paid the year prior by leaning on you because you need the money. That’s not a scalable or sustainable narrative. We want to be able to say to partners ‘let’s do something unique and different because you’re willing to show commitments that are aligned with us as a company.’ That’s much more interesting than saying ‘give us lower rates this year.’

How do clients reconcile the stark trade-offs that come with behaving responsibly?

Clients realize that low CPM prices don’t always save you more money but they do expose you to more risk. So they understand that responsible investing may mean CPMs rise, but so will the effectiveness because they’re buying a unique opportunity or in a less competitive market. I’m hearing conversations where clients, not all of them, but more of them are saying ‘there’s been an over-index toward leaning on the procurement department to get more for less because we’re convinced that there’s margin in the agency that means we’re making too much money.’ That sentiment was bred out of the last decade but it’s finally going away. Clients are now saying ‘you need to be in business for us to be successful so let’s find a balance that works for everyone.’

This time, holding company media agencies are staying quiet — either declining comment or not responding to requests for comment. That could have something to do with the fact that the ANA is far less accusatory this time, citing the desire to help marketers understand the flow from initial idea to actual execution, and the accompanying money flow. “The lack of full transparency for ad delivery and ad quality is diminishing marketers’ ability to fully optimize investments and drive greater business growth,” said Bob Liodice, ANA president and CEO. “We believe this lack of transparency is costing advertisers billions of dollars in waste.”

But a few holding companies that own data companies could also be less excited about closer scrutiny on how programmatic dollars flow through their systems. Though no one is alleging it (yet), they could potentially be favoring in-house operations along the programmatic supply chain, including metrics support and the like.  

Some agencies welcome the attention to the issue. “There are so many players involved in programmatic, from SSPs to DSPs to verification companies, etc., that it can lead to fatigue or apathy on the part of marketers to pay attention” to where the dollars go, said Prerna Talruja, group director of marketplace/biddable media at Crossmedia, an independent media agency. “Advertisers don’t necessarily make the decisions as to which vendor gets chosen, so from an agency perspective, not every decision might be completely neutral. That’s why it’s good if marketers start to ask more questions.”

One holding company media agency source who declined to speak on the record wondered about the odd timing behind ANA’s announcement. “With all the changes going on in the ad-tech world, and the fact that we’re at a real inflection point for our whole ecosystem, who knows how things will shake out?” The source added that their holding company is already working to better understand the flow of programmatic advertising, and where it proverbially swims into murky waters. And GroupM has moved to consolidate its programmatic spend with fewer vendors.

It also bothered this executive that the ANA declined to alert agencies about its effort — choosing instead to go to the press first. “One reason no one’s saying anything on this issue is because we haven’t seen the RFP yet,” the source said.

The ANA noted last week that it had the support of its equivalent association in the U.K., the Incorporated Society of British Advertisers, which in early 2020 put out the results of its own two-year research into programmatic practices, with the help of PricewaterhouseCoopers. It found a complicated mess, involving 1,000 unique supply-chain permutations, of which only 290 were fully mappable from end to end. Worse, there was about 15 percent of ad spend that simply was untrackable — quite similar to the “tech tax” that players in the industry attribute to waste in the ad tech space overall.

Given the continued expansion of programmatic here in the U.S., including connected TV, streaming and digital out of home, Talruja is glad the ANA is doing its own research. “It’s not that people don’t care about the opaqueness of it, it’s just there’s a lot of acceptance because so much money is being pumped into the space,” she said. “What we should all care about is, is all that money delivering the business results?”

Good question. — senior news editor Seb Joseph contributed to this report.

Color by numbers

It comes as a shock to no one that subscription services grew dramatically over the last 18 months. But which categories across digital experienced more growth? And do they have staying power to maintain their expansion? Commerce platform Sticky.io collaborated with commerce tracker PYMNTS.com to put out its recent Subscription Commerce Conversion Index, which surveyed more than 2,000 consumers and evaluated some 200-plus subscription merchants. Here’s what they found:

• Snapshots from February 2020, July 2020 and February 2021 show that the biggest growth areas in digital were digital media, which went from 6.1 percent of respondents to 9.9 percent in July to 19 percent this past February
• Internet of Things/hardware: 2.6 percent to 3 percent to 7.5 percent
• Online gaming: 21.1 percent to 22.7 percent to 28.1 percent
• Surprisingly, streaming surged then slid back, going from 65.7 percent in Feb. 2020 to 69.5 percent in July 2020, then 67.1 percent in Feb. 2021.
• The survey also found that 52.2 percent kept their subscriptions, 21.3 percent used multiple free trials, 14.7 percent were still on a free trial and 11.8 percent canceled their subscription.

Takeoff and landing

• Publicis Groupe not only retained parts of Stellantis’ global media business but expanded it to become the carmaker’s sole global media agency, with a media spend value approximating $2 billion. Stellantis includes brands in the Fiat Chrysler domain such as Maserati, Ram, Alfa Romeo, which was already handled by Publicis, but media for the French PSA Group automaker had been handled by Mediacom, and includes the Citroen, Peugeot and Vauxhall brands.
• IPG’s UM unit last week landed media AOR duties in North America and Europe for auto rental umbrella Enterprise Holdings, which includes the Enterprise, Alamo and National brands. The incumbent was Omnicom’s PHD. Separately, UM sibling media agency Mediahub landed media duties for Crown Media Family Networks, which includes HallmarkChannel.
• WPP got back to merging complementary divisions within its empire. GroupM and WundermanThompson last week announced the formation of a new data consultancy called Choreograph that comprises the data/analytics units of both agencies and will report up to GroupM North American CEO Kirk McDonald. Separately within GroupM, Wavemaker’s chief data sciences officer Karima Zmerli left to join PR giant Edelman as global head of performance and predictive intelligence.

Direct quote

“We’ve become familiar with the Amazon walled gardens and the Facebook walled gardens, but we’re about to become familiar with device-led walled gardens, operated by people like LG, Samsung, and Vizio. The use of identifiers in the TV market is evolving at really quite a space. What I’m hoping people are going to do is to stand back and look at other forms of [a] signal other than identifiers … You see a shape of connected TV and targeting and attribution which has moved beyond the straight identifier cookie-based world of the online advertising market, and I think there’s terrific opportunity in that.”

— Longtime WPP digital executive Rob Norman, now director at Piano, on the deprecation of cookies and the changing nature of identifiers, to BeetTV.

Speed reading

• Digiday’s platforms, privacy and data reporter Kate Kaye reports on the possible regulation of dark patterns, forms of online manipulation, which represent the latest battleground in the digital privacy wars – and who is resisting the call for regulation.
• Digiday’s senior editor Max Willens examines Gannett’s efforts to round out its first-party data strength while it participates in several identifier trials in preparation for a cookieless future.
• Variety analyzes the compensation packages of several media company C-suite executives, who made public flourishes on reducing their comp during COVID, but those changes were apparently more cosmetic than substantive.

Niche publishers covering the mental health space are feeling the effects of this growing interest. Over the past year, Dotdash’s health and wellness title, Verywell, had 10% growth in unique monthly visitors, bringing its average to 38.5 million uniques per month. Its mental health vertical, Verywell Mind, however, grew by 53% year over year, bringing its average to 7.1 million unique visitors per month, according to Rachel Berman, svp and general manager of Verywell Mind.

“Our bread and butter is evergreen content, but this year, with the focus on mental health, we needed to be talking in the moment,” said Emily Rose, associate general manager at Verywell Mind.

So the five-person editorial staff, and a network of 20 freelance writers, created a news program that produces between five to 10 new articles per week. All of the articles are approved by the brand’s review board made up of about 20 medical doctors, psychiatrists and therapists before getting published, to ensure accuracy and authority on the topic.

The conversation around employee burnout and adjusting to a post-Covid world is occupying much of the internet conversation, especially since May is considered a national mental health month. To further assist in those conversations, Verywell is looking to build out its Mind vertical with a new proprietary research initiative to establish itself as a go-to source for information on anxiety and self-care.

The research project, called the Mental Health Tracker, is conducted by Dotdash’s in-house research team. Starting this month, the tracker will poll 4,000 subjects on how they are mentally coping and responding to the reopening of society coming out of the worst of the pandemic. Every month, that group of volunteers will be asked questions like, “Are you seeking help? Do you have any new coping mechanisms? And have your habits changed?”

“We want to tap into the larger subset of the population during the return to normalcy,” said Rachel Berman, svp and general manager of Verywell Mind.

This information will all be used to inform the brand’s editorial coverage, including a multi-platform package, called the “Return to Normalcy,” which is meant to be a one-stop-shop for readers navigating everything from the fears of returning to an office to regaining confidence for in-person socialization.

While the return to normalcy package and the mental health tracker research project are editorial-first products, Rose said that there is an opportunity for sponsors to monetize the initiative.

This mental health month might be one of the most important ones on record, following the year-long pandemic forcing people into prolonged isolation, the events following the murder of George Floyd leaving a mental toll of worry and anguish on the minds of BIPOC communities and the U.S. presidential election as well as the Capital siege marking historical events. And after each of these events, brands showed up in commercials and in digital ads, expressing support of healthcare workers and the Black Lives Matter Movement in order to get a high-level brand association with these major sentiments.

Noting the struggles with anxiety and burnout bombarding consumers now, all brands, not just endemic ones, have the ability to also fit into the conversation of raising awareness of mental health, said Steven Bloom, managing director of print and publisher relationships at Omnicom Media Group. “The whole wellness space has been hot for a while and the pandemic further fueled it,” he said.

“Brands have increased their use of empathetic advertising aimed at connecting them to the concerns of their current and future customers,” said Matt Kleinschmit, CEO of Reach3 Insights. “Brands seek an emotional connection to their audience and are therefore very interested in aligning themselves with the positive mental health movement.”

Grindr had previously shut down the digital publication after a 17-month run, following controversial comments made by Grindr president Scott Chen about same-sex marriage, which led to a few employees stepping down in protest. 

Into will now have a different focus, said Scott Gatz, founder and CEO of the 13-year-old Q.Digital. Previously, Into had a more general news and pop culture focus, but that is a space already covered by Q.Digital’s LGBTQ Nation brand. Into will serve as a lifestyle and culture publication, with personal essays and stories on the community, “championing the people you don’t see enough of in the media,” Gatz said. It will specifically target Gen Z and BIPOC audiences “on the gender spectrum,” according to Gatz.

An LGBTQ+ brand relaunching with a focus on a young audience “could be a differentiator for [a media company] in this space,” said Steven Bloom, managing director, print and publisher relationships at Omnicom Media Group. “They found an area in the market where another brand can fit in nicely.”

There is also business opportunity in this audience. The global annual spending power of the LGBTQ consumer segment is estimated at $3.9 trillion, according to LGBT Capital. And one in six Gen Z adults identifies as LGBTQ, according to a Gallup survey published in February. Additionally, 42% of LGBTQ adults identify as people of color, slightly more than the diversity of the overall U.S. adult population, according to The Williams Institute at UCLA. BIPOC markets have $3.9 trillion buying power, according to a report from the University of Georgia.)

“RFPs this season have been very focused on this community and advertisers want to reach folks who are younger,” Gatz said. “We are seeing much bigger brands come into play.” Q.Digital has worked with brands like Lexus, Toyota, Nissan, Target, Mastercard and Reebok.

While Bloom does believe more advertisers are coming into the LGBTQ+ market, “big brands have been supporting this space for a long time. It’s not just endemic advertisers.” Bloom, who said he could not discuss specific advertisers’ strategies, added that there is “a nice selection of advertisers” working with publishers targeting the LGBTQ+ audience. 

Most of Q.Digital revenue is from advertising, with brands in automotive, entertainment, finance, pharmaceutical, retail and travel categories. Gatz said the company does not disclose revenue numbers, but that the “vast majority” of revenue is driven by direct ad sales, as well as display ads, sponsorships, custom branded content and video series and social programs. Q.Digital has “never taken outside investment,” according to Gatz, who said the company is “bootstrapped,” and that revenue funds new initiatives, including the acquisition and relaunch of Into.

Into’s editor-in-chief is Henry Giardina, a nonbinary trans man. The new website design and Into’s branding was created by Brinley Ford, a nonbinary trans person. Giardina’s team is made up of about 30 freelancers, “to ensure we uplift diverse perspectives and voices,” Gatz said.

The lead story on the Into homepage on the afternoon of Apr. 30 was a profile of Dominique Morgan, a Black trans woman who is a community activist, musician and executive director of Black and Pink, an LGBTQ+-focused prison abolition organization. Another story focuses on the LGBTQ+ Muslim community around the world, and another on the love story of two bisexual girls who found each other via TikTok. Gatz said upcoming stories will look at the Marvel Cinematic Universe’s first out-gay superhero, and the new, inclusive face of Dungeons & Dragons.

In an emailed statement, Adam K. Pawlus, executive director of NLGJA: The Association of LGBTQ Journalists, said LGBTQ media is “vital, not just for the news industry, but for LGBTQ communities and individuals.” While many news outlets “are facing mounting challenges,” LGBTQ journalists are “innovating” to ensure “our stories get told,” Pawlus added.

Q.Digital — which includes Gay Cities (“gay TripAdvisor,” according to Gatz), Queerty (“gay BuzzFeed”), and news site LGBTQ Nation — has 16 full-time staffers.

According to Comscore data, Queerty.com attracts roughly 1 million unique visitors a month and GayCities.com draws in around 100,000 (Comscore does not have data for LGBTQNation.com). Q.Digital’s marketing and social team will support Into and the publication will be Q.Digital’s first brand to have a presence on TikTok.

“I definitely think we’re finally starting to see the NewFronts and upfronts merge,” said Jessica Brown, director of digital investment at GroupM.

The prevalence of upfront participants at this year’s NewFronts seems to reflect the unsurprising expectation that more money will be shifting from traditional TV to streaming in this year’s negotiations. With TV networks rolling out standalone streaming properties, connected TV platforms pushing into original programming and digital video platforms seeing increased viewership on TV screens, the streaming landscape is flattening, pushing companies to use the NewFronts to showcase their streaming sales pitches.

“There’s so much content out there in general. People need to plant their flag and show what those differentials are,” said Stacie Danzis, vp of digital ad sales at A+E Networks, which did not present at NewFronts last year but has a portfolio of free, ad-supported 24/7 streaming channels to pitch this year. “I also think there are so many different layers and levels of premium that people are claiming that are out there that needs to be explained as well. A lot of these bigger places, they have these long-tail sites, they have syndicated extensions, they’re relying on short-form video that might not be qualified or UGC-focused.”

The TV network owners may be feeling the need to plant a flag at NewFronts not only because they have expanded their respective streaming footprints but also because pure-play streaming ad sellers are staking a bigger claim in the upfront. Over the past two years, platform owners including Amazon, Roku and YouTube have moved from taking a backseat to TV networks in the upfronts to last year negotiating with advertisers and agencies while upfront talks with the networks were still underway. 

More to the point, the TV network owners need to prop up their streaming properties as the dynamic between linear TV and streaming’s roles approaches a point of inversion. Historically streaming was positioned as a complement to round out advertisers’ linear TV ad buys. However, “we’re getting to a point or are going to be at a point very soon where that’s flipped on its head. Streaming services will be the new reach vehicle. Television does not lend additional reach or incremental reach because it’s just getting older,” said one agency executive.

“A lot of interest from upfronts is shifting to NewFronts, and I think a lot of that comes from the fact that there are a lot of pieces of the TV landscape that are just shifting more digital in terms of specifically how we buy,” said Frances Giordano, group director at The Media Kitchen.

During the pandemic, flexibility became a major concern among advertisers, leading brands and agencies to push for more favorable cancelation options in last year’s upfront deals and, in albeit rare cases, even leading some advertisers to sit out the upfront, according to agency executives. That flexibility, combined with a tight TV ad market, led advertisers to move even more money to streaming and to outlets outside of TV network owners’ streaming properties. And that migration of money from traditional TV to streaming has had the ripple effect of putting some pressure on digitally-focused advertisers to ensure they are not being locked out of inventory.

“Before, there was a massive amount of TV inventory. Now I think a lot of that inventory has shifted to streaming. So I do think that there may be more of a urgent message to digital-centric and digital-only brands to invest early and get that premium inventory before the TV upfronts, which is inclusive of that digital inventory, goes away,” said Mark Book, head of content for North America at Digitas.

Streaming viewership growth may have accelerated during the pandemic, but the streaming ad market is somewhat constrained, according to agency executives. “The supply is definitely becoming an issue,” Lewis said. Ad-free services like Netflix suck up a large share of people’s attentions, and ad-supported streaming services like Hulu and NBCUniversal’s Peacock run fewer ads per hour of programming than linear TV networks. 

“The ad load is less than television. The question is how can they manage the supply of that [streaming inventory] if they’re asking everyone to shift 30% of budgets into the medium,” said an agency executive.

Given how tight the traditional TV ad market has become, that puts some pressure on advertisers to find alternative sources of streaming inventory beyond what the TV network owners may be able to offer through their respective streamers. 

“You’re going to have properties like HBO Max just launching with relatively small commercial loads. Someone like that will have some tightness,” said a second agency executive. “But the CTV space is wide open. Overall it’s not the same kind of closed environment that linear is where there’s only so many GRPs to go around.”

CTV platform owners like Roku recognize the opportunity that openness provides. Roku’s upfront pitch this year takes a direct shot at its traditional TV rivals. Following last year’s focus on flexibility in the upfront, Roku is lowering the window in which upfront advertisers will be able to cancel their commitments. Last year, the company adhered to the IAB’s standard cancelation option that allows an advertiser to cancel 100% of a commitment 14 days ahead of time. This year, Roku is reducing that window to two days, said Kristina Shepard, national brand team lead at Roku. 

“They are directly addressing a need that advertisers have said they want in the marketplace,” Brown said.

Additionally, Roku will allow upfront advertisers to increase the volume of ad inventory they buy through Roku’s OneView ad-buying platform beyond the amount set in their initial upfront commitments while maintaining the discounted price they receive in exchange for the upfront commitment. That unlimited expansion option contrasts with traditional TV’s upfront deals that put a limit on how much additional inventory an advertiser can buy before the ad price is raised.

“Inherently what we’re seeing a ton of is that brands are taking options in linear as ratings decline quicker than even networks project ahead of time and then they’re incrementally giving us those dollars. We want to make sure we’re not penalizing them throughout the year when they’re moving that money into OneView,” Shepard said.