Month: February 2023

The key hits:

• Streaming advertisers struggle with some viewers being overexposed to ads while others are underexposed.
• There are ways for advertisers to more strictly manage ad frequency, but they come with costs.
• Netflix and Disney+ may evince a shift in streamers’ willingness to manage frequency for advertisers.

A few years ago, I felt I hit the frequency cap on articles written about streaming advertisers’ struggle to manage how often audiences were exposed to their ads. I was wrong. While the issue has improved according to agency executives, balancing between overexposing and underexposing streaming audiences to ads continues to be a challenge.

“It’s getting better, but it’s still an issue,” said Marcy Greenberger, evp and managing partner of integrated investment at UM Worldwide.

Often the issue is that individual viewers are overexposed to seeing the same ad too many times in a given week. Typically advertisers try to limit their video ads from being shown to the same person to two to three exposures per week, though some brand categories can extend the range to four, said Greenberger. However, there continue to be situations where some viewers are served the ad more than three times that threshold.

“If you look at an average brand, their CTV frequency curve looks as bad, if not worse, than their linear [TV] frequency curve,” said Mohammad Chughtai, global head of advanced TV at MiQ, which specializes in managing programmatic buying for advertisers and agencies. 

To that point, Chughtai shared the below graph that charts the weekly ad frequency for an undisclosed brand’s campaign across traditional TV and streaming by using MiQ’s data on 43 million U.S. households. While the brand’s streaming ads remained within the typical frequency range for 80% of viewers, the top 20% of viewers — i.e. those who spend the most time streaming — saw the ad more than a dozen times in a week.

However, while some streaming audiences and streaming advertisers are dealing with an overexposure issue, the opposite is also an issue and evinced in the chart above: Advertisers struggle to reach some viewers a sufficient number of times.

“We did a campaign with a goal of average frequency of three [ad exposures per week per individual viewer] across all the major publishers combined, and we could barely hit three,” said an agency executive.

That experience befits a study published by ad tech firm Innovid in 2021 that tracked 36 CTV ad campaigns and found 85% of households were only shown a given ad one or two times.

A primary reason for streaming advertising’s frequency management issue continues to be the challenge for advertisers to rein in exposures across disparate streaming services. Individual streamers can cap ad exposures within their services, but if a person uses multiple ad-supported streamers each week and an advertiser is running a campaign across each service, that person is prone to see the ad in excess. 

Advertisers can manage these cross-service exposures through a demand-side platform if they are buying ads programmatically, but typically advertisers need to enlist multiple DSPs for their streaming campaigns. Additionally, managing streaming ad buys programmatically can force advertisers to make a trade-off.

“Some of the premium services, if you buy them either as [through a programmatic private marketplace] or through open exchange, you’re going to limit the amount of supply that you can access,” said Greenberger.

Additionally, some streaming services exact a tax on advertisers requesting stricter frequency caps. “Some will endeavor to charge more for more restrictive frequency caps, which could be prohibitive or incentivize lower spend from partners,” said a second agency executive. “But more and more, they’re willing to waive those fees. And hopefully that will be the case going forward as I think these lower frequency caps are the expectation, not the exception anymore.”

Never say never, though. In a further potential sign of frequency management becoming the expectation, not the exception, in the streaming ad market, Netflix and Disney+ have each taken steps to limit ad overexposures on their nascent ad-supported services.

“Disney+ and Netflix both started off very aggressive in their sales approach, but both realized quickly they weren’t scaling as fast as expected. They were both very proactive in either turning away dollars or going to their advertisers that have already committed and saying, ‘We recommend or we need you to peel back some money so that we can make sure we’re delivering both your plans effectively and a positive user experience,’” said the second agency executive. “That’s not always the case with some of the more established platforms that really are just prioritizing revenue.”

The economic downturn could be an X factor in how the frequency management issue plays out in 2023. 

On the one hand, there’s already a history of streaming ad sellers overpromising to secure deals and bypassing frequency caps to ensure delivery, according to industry executives.

“If you [as an ad buyer] tell a publisher, ‘Here’s $50 million to run my ads,’ they don’t realize that these publishers are going to take your money. They’re never going to be like, ‘No, my frequency management isn’t great,’” said a former streaming executive.

On the other hand, advertisers are looking to eliminate ad spending waste, and managing streaming ad frequency can present low-hanging fruit. 

“Excessive frequency is wasteful, and insufficient frequency can can be ineffective,” said Greenberger. “So I think it’s just as important as ever that both advertisers plan for it accordingly and publishers manage for it accordingly.”

What we’ve heard

“I just got a Samsung TV. It’s wild how much they push [the company’s free, ad-supported streaming TV service Samsung] TV Plus. They’re trying to make it unbelievably clear that you can cancel your cable subscription. They throw the local news at you, which is the number-one category. They throw movies at you, which is the number-two category. And they make it laborious to set up your cable box. So it’s like all of these things that just sort of slowly pushing people into it.”

— Entertainment executive

Hulu’s next home?

Following Disney’s quarterly earnings call last week, Disney CEO Bob Iger opened the door to potentially selling Hulu in an interview with CNBC. 

Whether Disney would actually go through with offloading the preeminent ad-supported streaming service after taking control of Hulu in 2019 and agreeing to buy Comcast’s stake — and putting Hulu’s ad tech stack at the center of Disney’s streaming ad business — is a big question. 

Another big question: Who would buy it? Well, I have three potential suitors in mind…

Numbers to know

113 million: Number of people, on average, who were watching the Super Bowl at any given minute during the game.

2.4 million: Number of Disney+ subscribers that Disney’s flagship streamer lost in the final three months of 2022.

800,000: Number of Hulu subscribers that Disney’s other streaming service gained in the final three months of 2022.

12.4 million: Number of U.S. streaming subscribers that Starz owner Lionsgate had at the end of the quarter of 2022.

17%: Year-over-year increase in the amount of money people in the U.S. spent on streaming subscriptions in 2022.

60%: Year-over-year increase in U.S. households canceling their pay-TV subscriptions among the five top pay-TV providers.

What we’ve covered

Economic downturn ups the ante for major Super Bowl advertisers General Motors, AB InBev, Netflix:

• Super Bowl ads are being supplemented with digital campaigns that can be better measured for business impacts.
• Brands are also enlisting creators to boost themselves through organic posts on social platforms.

Read more about the stakes for Super Bowl advertisers here.

Brands like Rakuten, Squarespace, Best Buy turn to in-house teams to create flexible, quick Super Bowl campaigns:

• Brands’ in-house teams are designed to be quicker and more agile than agencies in managing Super Bowl campaigns.
• Marketers claimed that saving money was not a primary factor in relying on their internal teams.

Read more about Super Bowl advertisers’ in-house creative teams here.

How brands and agencies are prepping this year’s hybrid Super Bowl war rooms:

• Dentsu Creative, Tinuiti, Modifly and Barstool Sports are among the companies that managed their Super Bowl promotional efforts remotely.
• Some companies combined in-person and remote war rooms.

Read more about brands’ Super Bowl war rooms here.

On the eve of the Super Bowl, brands much prefer advertising on CTV over traditional TV:

• 49% of 33 surveyed brand professionals said they aren’t spending any money on TV ads this year.
• 33% of respondents said they’re not confident that TV drives marketing success.

Read more about brands’ TV spending here.

What we’re reading

Discovery+’s future:
Warner Bros. Discovery still plans to combine HBO Max and Discovery+ into a single streaming service, but the company will keep Discovery+ as a standalone option for customers suffering sticker shock, according to The Wall Street Journal.

Peacock’s promise:
NBCUniversal’s streaming service has struggled to grow to rival Netflix, Disney+ and HBO Max, but it has been growing and may turn the corner this year after having settled its executive ranks and with a slate of original shows in store for 2023, according to Vanity Fair.

Tubi’s value:
As the ad-supported streaming war heats up, Fox has received offers to sell its free, ad-supported streamer Tubi for more than $2 billion, according to Bloomberg.

TikTok’s latest creator payments pitch:

TikTok is developing an option for creators to charge people money to watch their videos as well as an updated version of its criticized Creator Fund that will aim to pay more money to creators, according to The Information.

TV’s sports measurement mess:
The latest complication in TV advertising’s measurement makeover is the ability of measurement providers — including Nielsen — to reliably count the number of people tuning into live sports on traditional TV and streaming, according to Ad Age.

“We’re trying to build awareness, particularly amongst the 30% of the market who need a one line [phone] plan,” Visible CMO Cheryl Gresham said of the wireless brand’s Single’s Awareness Day advertising efforts. “We wanted to position this not for only single people but anyone who has self love.” 

Visible is working with comedian and influencer Benito Skinner, a.k.a. Benny Drama, for the campaign, in which Skinner plays Youpid, Cupid’s brother, who tells consumers that they’re enough on their own. The effort is part of an overall shift in the phone carrier’s influencer marketing strategy, as it consolidates its efforts while keeping its influencer budget steady at 3% to 4% of the brand’s ad spend, per Gresham, and working with bigger name influencers like Skinner. 

Working with Visible to craft the character of Youpid appealed to Skinner, who is known for his various characters on Instagram, because the brand had previously “championed queer voices” and had been “walking the walk,” Skinner said of Visible’s inclusive marketing efforts. At the same time, the brand wanted to have a collaborative approach to not only the character but also the script, set and overall look of the effort, which also made it easier for Skinner to sign on. 

Visible isn’t alone in finding a unique way into Valentine’s Day marketing this year. Skincare brand Olay tapped TikTok influencer Kat Stickler for a Galentine’s Day effort, with Stickler offering advice for singles, according to Loren Fanroy, senior communications manager of Olay Skincare. 

By leaning into Galentine’s Day this year, the brand is aiming to “flip the negative script that singles hear every year and instead offer them a chance to feel empowered and supported during a holiday that is typically targeted to couples,” Fanroy wrote in an email. It’s unclear how much of the skincare brand’s ad budget is dedicated to the effort, as Olay declined to share budget details. 

Meanwhile, wine brand Chateau Ste. Michelle approached its Valentine’s Day efforts by offering incentives, like $100 gift cards, to encourage people holding onto past mementos from ex-partners to move on. “Wine marketing has historically had more of a romantic view of the world,” Sean McGrath, group account director at Team One, the agency behind the effort, said in an email. “Beautiful vineyards with sun flares accompanied by some touching ballads. Chateau Ste. Michelle wants to have a very different conversation with its consumers.”

Finding ways to differentiate brands during different holidays isn’t a new concept, as “from a brand perspective holidays are a great time to market” because they “create a bit of urgency” for consumers to buy from a brand tied to an occasion, explained Katie Byrd, senior engagement manager at brand consultancy Prophet. “But everyone is trying to make their voice heard at the same time so brands have to find different ways, tricks to ensure their voices are heard.”

But when it comes to Valentine’s Day, marketers have recognized that focusing on romantic couples may be leaving potential revenue on the table, noted Douglas Brundage, founder and CEO of brand consultancy Kingsland, adding that brands are incentivizing people to buy presents for themselves or friends rather that just romantic partners now. 

“Valentine’s Day is a day that can be depressing for many,” said Brundage. “Anything we can do with marketing to make people feel included is good.”

The situation underscores the ongoing publisher-platform dynamic where platforms rely on publishers to create content, incentivizing them to do so in many cases. Getting used to additional revenue through these partnerships, publishers run the risk of eventually get screwed over by algorithm changes or changing internal prioritizations.

Snapchat ultimately denied the digital media company’s request to launch new channels focused on text-based slides due to a shift in prioritizing video programming and, in effect, was no longer accepting pitches for additional Discover channels from publishers.

Following this guidance, the team pivoted and launched two new shows, which Snap helped to launch, including selecting content for the shows, the exec claimed.

“The shows were being viewed by no one. We were creating all this custom content — it’s very video-heavy, it required a lot of editing and reformatting,” the media exec said. “We were very unhappy with the performance of those,” and ultimately the team decided to push pause. The exec did not say specifically how the shows performed.

A Snap spokesperson told Digiday that the platform does not prioritize one format over another, but wants to offer users a range of multiple content formats. Every Discover show and pitch is vetted by Snapchat’s content team to make sure they’re compliant with guidelines and not all pitches will be approved, the spokesperson added. Publishers are instead encouraged to test out different content strategies and experiment with posting across the Discover and Spotlight tabs in the app, to see which formats ultimately meet their audience and revenue goals, the spokesperson added.

But during the period of August 2022 to January 2023, following the launch of the shows, monthly revenue from Snapchat decreased by an average of about 60% for the media company, according to the exec.

The executive attributed their company’s decrease in revenue to algorithm issues that the platform is facing, which they said began after Snap’s layoffs at the end of August last year. The exec called its company’s Snapchat strategy as “in a holding phase.”

A Snap spokesperson said that as there is a continuous rollout of updates and improvements to its algorithm, creators are not encouraged to stop publishing until the algorithm is fixed, calling it an ever-evolving product.

Despite the revenue decrease, “the platform is still profitable for us,” according to the media exec. “It’s still self-sufficient in terms of it more than covering the resources it takes to operate on the platform. And we kind of see it as its own business within our company and its own additional revenue stream.”

This publisher isn’t alone in their rollercoaster experience with Snapchat. 

Ad revenue drops, algorithm issues and executive departures

Another news publisher who spoke only on the condition of anonymity, said that their company’s revenue is also “substantially down” year over year — a downward trend that started in the middle of 2022. The company publishes shows and content for Discover and Spotlight, but the revenue drop was primarily attributed to revenue generated through Discover.

Despite this, an exec from the company said that the team has “not changed our strategy or altered how we approach the platform,” and hopes the issue will be remedied by the platform soon.

Meanwhile, Snapchat wants to increase the number of content monetization opportunities this year as well as streamline the experience for publishers who use the app, according to the Snap spokesperson, who added that there will be a significant investment into simplifying the tools used for creating posts in the app. They declined to share a set timeline for when some of these updates will be available. 

Not immune to the cost cutting trends that hit tech companies over the last several months, Snap has been undergoing a series of changes, starting at the end of August with a 20% reduction of staff — or 1,300 people. At the same time, Snap’s chief business officer, Jeremi Gorman, and vp of ad sales, Peter Naylor, left the platform to join Netflix. Then its Q4 earnings call revealed the company was forecasting as much as a 10% decrease in advertising revenue over the first three months of 2023. And most recently, the platform’s top content and partnerships executive, Ben Schwerin, announced he’s leaving the company after more than eight years, according to Variety.

Responses to Snap’s latest earnings and these leadership changes are mixed: Some advertisers, who are already being judicious with their budgets right now, are not seeing Snapchat as a top priority in their social media and influencer buys. Others are less concerned.

“We are seeing stable demand from brands for Snapchat advertising. While growth in new social platforms has taken a bigger slice of the pie the last year, Snap is still a critical place for brands to reach consumers, with strong optimization tech and ability to drive business outcomes at the top and bottom of the funnel,” said James Donner, partner and evp of investment at Decoded Advertising, who works with clients in the healthcare and wellness industries. 

Not all publishers are impacted equally

Amid these challenges, a number of “content partners” — defined as news outlets, media companies, creators and sports teams, per the platform’s website — are still seeing success on Snap. Still, Snap claimed to investors that 17 of its top content partners reached more than 50 million viewers across the globe during Q4. This is down from 25 content partners achieving this benchmark in Q4 2021. The partners who saw this success were unnamed.

U.K.-based LGBTQ+ publisher PinkNews is one such publisher that has seen success on Snap. CEO Benjamin Cohen said that across the 30 shows his team publishes, there are just under 10 million total subscribers, making Snapchat PinkNews’ largest platform from both a revenue and audience perspective.

“I think if we were launching on Snapchat Discover today, it would be a lot harder than it was when we launched in 2018 [when] there were a handful of publishers and it was, frankly, easier because it was a less crowded environment,” said Cohen. During the year that his company launched on Snapchat, there were more than 90 Discover publishers and show makers publishing alongside PinkNews.

PinkNews is still creating new shows on the platform as well, both in the languages it currently publishes in, English and French, with plans to launch in other languages.

So while “it’s become a more challenging platform, I think it’s one that rewards those who have been loyal to it, because we have nearly five years of data on all of the different things that we’ve done,” Cohen said.

Too big a barrier to entry 

For other publishers, the resources needed to make content for Snapchat were too numerous. It led one mid-sized digital media company, in part, to walk away from the platform altogether in early 2022, said a third media executive who spoke on the condition of anonymity.

Unlike other social platforms that make it easier to republish existing content — such as taking a TikTok and posting it on Instagram Reels — Snapchat required a different skill set that wasn’t currently in-house, so publishers had to build these teams from scratch or give team members an additional workload. Snap has been trying to improve this hurdle for creators. 

“You’re kind of always starting in the red,” the third media exec said.

While this exec said audience and revenue grew in 2021, the team saw a downward shift in revenue in 2022. And standing out as more publishers joined the “cluttered environment” made it difficult “to the extent that you would need to in order to deliver enough audience to make money,” the third executive said.

More control over the money 

Snapchat also became less of a priority for the third publisher because unlike other social media platforms, the publisher’s sales team wasn’t able to directly sell their content at the time, making them completely beholden to Snap and the revenue share model on Discover.

Snap changed this last year and the platform does allow publisher partners the ability to sell ads directly in their content as well as against their audiences through the platform’s Business Manager.

Cohen said that while most of the revenue earned from Snapchat right now is through revenue shares on programmatic ads, the platform is starting to test show sponsorships, which would be direct sold or co-sold by the publisher and Snap. And through this, he hopes to tip back toward direct revenue being the higher proportion of revenue, like it was when publishers were able to sell takeovers of their stories in years past.

Despite that capability, “most of the revenue that we received from Snap is in the [revenue] share program [from Snap] themselves monetizing against our channels,” according to the first publisher.

Customer experience platform Disqo also analyzed 62 of the ads in the game to understand each ad’s impact, ranked by ad reactions and attitude change among consumers. This helps advertisers focus on the nuances of what worked well for consumers, said Patrick Egan, Disqo’s director of research and insights.

“Most marketing organizations have a host of KPIs that they need to move, so single-metric and single-method research is not enough,” Egan told Digiday.

Focusing on ad impact and brand lift

In its third annual Big Game report, Disqo used zero-party brand experience data from U.S. consumers to rate the top 10 ads in 2023, according to a blend of their creative appeal and brand lift delivered. Marketers may start to leverage these metrics as they make investments in future big tentpole TV events. Based on the results provided to Digiday, the top overall ads were:

1. Indiana Jones: Dial of Destiny (movie trailer)
2. WeatherTech (auto supplies)
3. Popcorners (snack food)
4. Farmer’s Dog (dog food)
5. Creed 3 (movie trailer)
6. Marvel’s Guardian of the Galaxy, Vol. 3 (movie trailer)
7. Air – Courting a Legend (movie trailer)
8. Doritos Sweet & Tangy BBQ (snack food)
9. Heineken 0.0 (beer)
10. He Gets Us — Childlike (religious/cultural)

“Creative appeal helps brands know if their ads are resonating from a cognitive and emotional angle, while brand lift helps inform whether these ads are driving people into the sales funnel,” Egan explained. “Knowing that consumers love an ad based on single-metric news polls is not a good way to justify Big Game ad spend.”

When scored by brand lift, the Fanduel’s ad featuring Rob Gronkowski, Draft Kings showcasing a number of celebrities and film trailer “Creed 3” ranked as the top three ads. For the highest creative appeal, the “Indiana Jones: Dial of Destiny” trailer, Amazon’s ad featuring a rambunctious dog and WeatherTech’s pro-USA message ranked as the top three, respectively.

“A lot of movie trailers did quite well, which isn’t really surprising. The sweet spot around high creative appeal and better brand lift tends to be entertainment shows and movies, and more niche products,” said Egan. “Celebrity’s not key to unlocking brand lift but it might be key to unlocking creative appeal.”  

Disqo reviewed some 15,000 consumers following the Super Bowl, and another 15,000 consumers were separately surveyed about their awareness of advertisers. A total of 34 ad attributes were studied, including the celebrity count, usage of non-human spokespeople and intended humor. That was used to calculate an ad’s brand lift by comparing brand awareness between exposed and matched control consumers, according to the company.

Audience engagement breakdown

As far as viewership, AdImpact reported some 124 million viewers, and tracked how people dipped in and out, from the national anthem and the kickoff through the halftime shows and the end of the game.

By comparison, measurement company iSpot’s preliminary results showed the game drew an average minute audience of approximately 118.2 million viewers. The total household reach on linear and streaming on Fox and Fox Deportes was 59.9 million households, with an average of 48.3 million of them in the U.S., according to iSpot. The total across linear and streaming was 128.4 million viewers.

“The Super Bowl represents an opportunity for brands to gain massive reach in a short amount of time in front of an audience that is looking to the ads as a source of entertainment,” said Cassandra Arora, CMO at iSpot. “This year, beyond verifying massive reach, our research found the ads drove high purchase intent as well, which gives brands strong signals for both brand and business impact.”

(iSpot has annual contracts with 80% of advertisers in the SB this year.)

Additionally, out-of-home viewers made a comeback and totaled an average minute audience of 16.4 million adult viewers, 18-plus, per Tunity Analytics (iSpot company). OOH audiences increased 32% from the previous Super Bowl as more consumers returned to restaurants and bars to watch the game.

iSpot tracked a total of 59 brand ads and 22 promos from Fox advertising and the league, which delivered for 5.6 billion persons 18+ ad impressions during the game. Fox and Fox Deportes accounted for 64.1% of all ad deliveries on that day and 83.4% of all TV ad impressions compared to the other broadcast networks, according to iSpot.

iSpot also found that more humor was used across Super Bowl ads this year – 72% of them “deployed humor” and was a record in the last 10 years, according to iSpot Creative Assessment. Five ads generated 100 million impressions, with The Farmer’s Dog’s “Forever” being the highest at 101.5 million linear household ad impressions.