Month: May 2022

Lily Butler, director of creative strategy at Slate, pitched to advertisers at IAB’s Podcast Upfront the publisher’s “branded mini features,” which are 60 to 90-second segments she described as “fully custom, highly produced micro-documentaries that run in the middle spots” of Slate’s podcasts.

And Vox Media’s branded content studio Vox Creative also sells branded segments that range from 60 seconds to five minutes, “sort of like a podcast segment within the podcast,” such as an explainer that a brand gets credit for sponsoring in a podcast, said Annu Subramanian, executive producer of audio at Vox Creative. A deal with HBO to promote the final season of “Silicon Valley” in 2019 featured an interview between tech journalist and “Pivot” podcast co-host Kara Swisher (who made cameos in the show) and fictional character Gavin Belson (Matt Ross), for example.

But when speaking to ad buyers, it seems only advertisers with big budgets can afford to spend on custom, integrated, longer-form segments in their mix of podcasting advertising. Otherwise, advertisers are sticking to the 30- to 60-second ad length.

The IAB’s U.S. Podcast Advertising Revenue study published last week found the same: More than half of the ads in podcasts are 16 to 30 seconds long — up from 38% of podcast ad inventory in 2019. This share was followed by ads that are 31 to 60 seconds long, which take up 27% of podcast ad inventory – down from 44% in 2019. Ads over a minute long made up only 3% of podcast ads, according to the study — down from 9% in 2019.

Most of the podcast ads Mediahub is buying for its clients are 30- to 60-second pre-roll and mid-roll ads, said Jacob Schwartz, associate media director of national audio investment at the media planning and buying agency.

“It’s the most efficient way of buying podcasts,” he said. “Based on the results I’m seeing, I don’t really have any need to say: we should be running a two-minute ad read… If we can’t get our messaging out in 60 seconds, and say: here’s our brand, here’s what we’re doing, here’s why you should care about us — then I think that’s more of a creative issue.”

That’s also the case at Horizon Media, according to Maria Tullin, vp, managing director of advanced & digital audio at Horizon Media. Producer-read, short-form ads are “gaining popularity” due to improvements in audience targeting and segmentation — the big players like iHeart and Spotify have even curated networks around audience demographics (such as iHeart’s podcast networks Black Effect and My Cultura), Tullin said.

As the industry moves away from host-read, baked-in ads — it’s also moving away from ads that would naturally go over 60 seconds as a host talked about a brand as part of the podcast show, Tullin said. “I don’t feel like that’s happening quite as much as it was unless you’re buying sponsorship [segments],” she said.

Jen Soch, executive director of channel solutions at GroupM, said host-read ads that are 30 seconds long are still “preferred and the most common.” 

“More people are looking to get a larger audience on podcasts — podcast budgets are growing, there’s more of an interest in that reach number, which lends itself to more of the 30-second communication,” she said.

Longer-form custom integrations in podcasts can also become “cost-prohibitive very quickly,” depending on the publisher, show and talent you’re working with — another reason Mediahub doesn’t spend a lot on this ad format, Schwartz said.

For example: “If I have a $500,000 podcast budget and I can get 10 million impressions out of that and it’s going to cost me $250,000 for a podcast that does 150,000 downloads a month — is it worth it to take half of my budget, lose half my reach and put that with a smaller podcast to do a bigger integration? With some brands, it works; with some brands, it doesn’t,” Schwartz said.

It’s not necessarily that CPMs are higher, but custom integrations require a higher minimum spend from advertisers, he said. For example, if a publisher requires an advertiser to spend at least $100,000 to run host-read ads in a podcast campaign, the publisher may ask for at least $500,000 for a custom integration (depending on the talent and the podcast), Schwartz said. Soch said the same: the issue is not higher CPMs, but “overall investment levels are more significant.”

“Some brands only have a $500,000 budget at any given time to work with. So is it worth it? To sink all of that money into one segment with one podcast? Probably not,” Schwartz said. Instead, it would be more effective to run shorter ads that cost less across more podcasts, he said.

However, it might make more sense for brands that have big budgets and can allocate some of their podcast ad spend to longer-form, custom segments without sacrificing reach in shorter spots that can scale, Schwartz said. Ads over a minute long might also work for a sponsored segment, such as an interview with a host or a story about a brand, Tullin said.

But the downside of longer ads is the risk of losing audience interest — and, again, the cost, Schwartz said. “When you get above 60 seconds, you have to also think about the user experience. Does someone really want to sit through a two-minute ad? Probably not,” he said. 

Much was learned last week about where the state of video (as an umbrella term) is headed, and how marketers, through their media agencies, plan to harness it (or not, as explained below).

Let’s start with the fact that there were even live IRL upfront presentations at all. Including the 10 days of NewFronts at the beginning of May, buyers have expressed enthusiasm over being able to gather in person again following two years of virtual presentations, which couldn’t quite convey the same level of excitement as seeing Miley Cyrus or Lizzo perform or Sylvester Stallone expound on Covid.

“I think it shows that people wanted to be in New York, people wanted to get together, people wanted to have conversations,” said Carrie Drinkwater, Mediahub’s chief investment officer. “I think it demonstrated the importance of connection and not doing these deals over Zooms or through Excel sheets.”

I’ve been paying attention in some form or another to the Upfronts since 1991 when few people outside the TV business or media agencies knew what an upfront was. Here are my takeaways at what has likely been a pivotal week in the history of TV/video: 

Off to the races — but it may be a marathon 

Most media buyers I spoke with expect the market to start moving pretty immediately if it hasn’t already started. They concurred that, given the recent darkening clouds on the economic horizon, media sellers are eager to lay money in. It doesn’t help that clients are also said to be reducing their budgets, as clients take money off the books and return it to the bottom line.

Expect to see deals get cut as early as this week, with linear competing with the major digital players to increase dollar volume. Last year, with linear networks seeking and largely getting massive CPM increases, often north of 20 percent over the prior year, their total upfront dollar intake took a hit, as they counted on momentum continuing into scatter. Now that the scatter market has cooled considerably, networks want to lay in extra volume. 

But that may not happen. One buyer who spoke on condition of anonymity, said “That money doesn’t necessarily go back” to the networks that spurned it last year. ”Once it goes to somewhere else, it’s not like we say, ‘Alright, but next year, we’re gonna try to move that money back.’”

Living in a post-schedule world

More than one buyer noticed the absence of schedules, save Paramount/CBS. This is very much the result of content being offered more on-demand than ever. “This week we’ve seen the reality of the world, which is, ‘Let’s present you content and the access points and not worry about how this show’s gonna be on Monday night at X time,’ like the old days,” said one top investment chief. “While it’s important to understand schedules for allocations per quarter, there’s a new world which is, ‘I want my content when I want it, and I want it to be consumer-friendly.’ And that’s what all these partners have done a pretty good job of presenting from their capabilities.”

Streaming takes the front seat

Nearly every buyer agreed that streaming services are the higher priority to sell this season. “We definitely saw that a lot of streaming was a main topic of every presentation,” said Amy Ginsberg, chief investment officer at Havas Media Group.

After all, it’s where audiences keep gravitating in larger numbers. But there’s another value to streaming that comes at the expense of linear TV that perhaps the sellers didn’t intend. One major media buyer had an epiphany moment listening to NBCU talking about how network shows would repeat on Peacock, for which NBC is looking to sell distinct inventory — which to this buyer seemed like double-dipping. “Why am I going to pay for it on Peacock and also pay for it on your linear network?” asked the buyer.

Currency, what currency? 

The drumbeats leading up to Upfront Week told a story of networks pushing alternative currencies, as each major media company seemed aligned with one or the other (NBCU and iSpotTV, CBS/Paramount with Videoamp, etc.). That didn’t materialize last week, as buyers and sellers seemed to tacitly agree this is not the year to test alternative currencies in any significant way. 

“I do think there’ll be some transactions on non-Nielsen currencies this upfront. It just won’t be at scale,” said Celeste Castle, EVP of research & measurement, dentsu Media U.S. 

That lack of scale is probably for the better, as more than one holding company media agency exec told of the potential for error and confusion since virtually every agency is set to analyze and measure buys off a Nielsen base. “A client is not going to let NBC guarantee their stuff on iSpot and CBS guarantee their stuff on Comscore, and Warner guarantee their stuff on whatever,” said a measurement executive with a major media agency. “That client has to be consistent. So I’m thinking, could you have multiple currencies? Sure. But how are you going to manage your inventory, and then put a value against it? There are so many questions out there.”

Two things all buyers agree on: testing the alternatives needs to happen, and soon — just not in the upfront — because problems with Nielsen persist. Secondly, before any significant amount of transacting gets done on these alternatives, someone’s going to have to figure out who pays for all this. Because it doesn’t come cheaply.

In sum, it’s been a fascinating market to follow, and there will be a few more stories told in coming weeks about how this all shakes out.

Color by numbers

As the industry slides into buying and selling ad inventory for the coming season, iSpot.TV offers up these stats that encompass the prior TV season (from Sept. 6, 2021 to May 8, 2022):

• There were 1.8 trillion total TV impressions, which represents a 6.8 percent increase over the prior season.
• There were 678.2 billion ad impressions over that same time frame, which is a 4.7 percent increase.

Takeoff & landing

• IPG-owned media agency Mediahub landed media AOR duties for rideshare service Lyft, which does the lion’s share of its advertising on digital. VaynerMedia had handled digital duties but didn’t participate in the client’s review.
• Creator commerce company Whalar last week acquired talent & management company, C Talent, which specializes in managing deaf and disabled talent. 
• S4 Capital acquired tech services and engineering firm Theorem One to help boost its target goal to make tech services 25 percent of its business. 

Direct quote

“In every upfront presentation, they all [claim to have] the fastest growing streaming networks. They all rate the best at X, Y and Z, and It’s the same story. And only one can be right. And that’s what I think is the trick in all this — making sure you know which one’s right when you leave the presentations and you go back to your desk, and you’ve done all this work beforehand.”

— One major chief investment officer, speaking to the similarities of media sellers’ streaming pitches.

Speed reading

• Digiday’s senior news editor Seb Joseph takes a long view of the economic factors that seem to indicate things will get worse before they get better, for consumers and for the companies that serve them. 
• Digiday’s managing editor Sara Jerde assembled the best content from Commerce Week in one story, looking primarily at how publishers improved their commerce offerings during the pandemic. 
• Digiday’s senior ad-tech reporter Ronan Shields breaks down all the ways in which Microsoft is gathering strength to become a bigger force in advertising.

At a $50 CPM, Disney+ is surpassing the prices that NBCUniversal’s Peacock  and Warner Bros. Discovery’s HBO Max sought in last year’s upfront market and that gave ad buyers sticker shock. The former sought CPMs in the $30 to $40 range, while the latter sought $40+ CPMs. By comparison, other major ad-supported streamers like Hulu, Discovery+ and Paramount+ were charging low-to-mid $20 CPMs that major ad-supported streamers charge. As a result, Peacock’s and HBO Max’s asks ended up being price prohibitive, with some advertisers limiting the amount of money they spent with the streamers because of their higher rates.

Unsurprisingly, agency executives are balking at Disney+’s price point. “They’re citing pricing that no longer exists, meaning Peacock and HBO Max recognized they came out too high and they’re reducing it. Disney+ is using earmuffs to pretend that second part didn’t happen,” said one agency executive.

However, Disney+ isn’t the only streamer seeking to raise the rates that ad buyers are accustomed to paying. Hulu is also seeking to increase its prices in this year’s upfront, with P2+ pricing going from a $20-$25 CPM average to averaging in the $25-$30 CPM range, according to agency executives. And during a call with reporters on May 16, Fox advertising sales president Marianne Gambelli said that the company will seek higher prices for its free, ad-supported streaming TV service Tubi in this year’s upfront market. It’s unclear what Tubi’s current rates are, but FAST services’ CPMS are typically in the low to mid teens, said the agency executives.

“We have to get the value for Tubi. Tubi has grown to a point — it’s doubled, tripled in size over the past couple of years. So we are going to obviously make that a priority and look for not only more volume but price,” Gambelli said.

Meanwhile, in pitching its Thursday Night Football package that will be streamed on Amazon Prime Video and Twitch, Amazon has been pressing for a premium on what Fox charged advertisers last year, according to agency executives. The e-commerce giant will be handling the games’ ad placements like traditional TV, meaning that it will run the same ad in each ad slot for every viewer as opposed to dynamically inserting targeted ads. “It’s streaming broadcast,” said a second agency executive.

An Amazon spokesperson declined to comment on pricing but did provide a general statement. “Thursday Night Football on Prime Video and Twitch is a purely digital broadcast, and we’re excited to bring fans a new viewing experience. There are 80MM active Prime Video households in the U.S. and, in a survey of our 2021 TNF audience, 38% reported they don’t have a pay-TV service – meaning TNF on Prime Video and Twitch enables brands to connect with cord-cutters and cord-nevers. Brands can also reach these viewers beyond TNF. Our first-party insights enable them to reengage TNF audiences across Amazon, such as in Freevee content.”

One of the agency executives that Digiday spoke to said the latest ask is for a plus-10% increase on Fox’s rates, though what Fox’s rates were are unclear and other agency executives said the premium that Amazon is asking for varies. Ad Age reported in February that Amazon was seeking up to 20% higher prices than Fox’s rates. “I don’t know if it is consistently plus-10, but it is definitely more. Which is crazy because Fox couldn’t make money on it, which is why they gave it up for this fall,” said a second agency executive.

“Someone was eating way too many gummies before they put the pricing together,” said a second agency executive of Amazon’s Thursday Night Football pitch.

Ad-supported streaming service owners also see an opportunity to push for higher prices as advertisers to adopt more advanced targeting with their streaming campaigns, such as by using the media companies’ and/or advertisers’ first-party data to aim their ads on the streamers. 

Said one TV network executive, “You’ll see premiums, especially as it relates to advertisers that really want to hook into [their company’s streaming service] and buy those targeted audiences across the platform and either use [the TV network’s] first-party data or bring their own data to the table. That’s the biggest business we’re in, and that’s where we see great growth from a pricing standpoint.”