Month: May 2023

On day two of the Interactive Advertising Bureau’s four-day NewFronts, digital content platforms and streamers pitched new ad formats (with a focus on artificial intelligence and shoppable content) in short-form social video and longer-form TV shows and movies.

Key details:

• Snap is testing new ads with its new ChatGPT-powered chatbot
• Samsung’s adding multi-screen shoppable content
• Privacy discussions so far have been scant
• Snap, Roku and Peacock tout their massive audience reach to advertisers
• Peacock focuses its pitch on ad-supported movies and four new ad formats
• Roku is bringing ads to “Roku City”

Yahoo did not have a formal presentation, but instead hosted a concert featuring Chance the Rapper on Tuesday evening.

From ChatGPT to CTV, AI-powered ads are coming to Snap, Roku and Samsung

Day two of the NewFronts featured plenty of AI-related announcements. Using “My AI” — Snapchat’s recently announced chatbot powered by ChatGPT — Snap has been testing ways to use AI to surface mobile video and testing new sponsored links within AI-powered conversations.

“Our goal is simple and that is to connect with partners that can quickly solve a problem or just make their day a little bit easier,” said Snap Americas President Rob Wilk. “After the initial response, maybe there’s a link from a local restaurant helping me to solve my problem with just a tap. Or if I was talking with My AI about taking a fun weekend trip, I might receive a sponsored link from an airline or a hotel with a special deal.”

Other companies also announced new AI tools for advertisers. For example, Roku debuted a new “Contextual AI” tool that scans the Roku Channel content library to let advertisers automatically run messages next to relevant parts of shows and movies. Meanwhile, Samsung announced AI-powered shoppable content through a new partnership with KERV that lets viewers connect with advertisers on their mobile devices without pausing connected TV content.

Data’s everywhere, but privacy chatter’s nearly nowhere

Despite growing concerns — and increased regulation — about ad-tech’s data privacy issues, the topic hasn’t come up much so far this week in companies’ presentations. One company that did briefly mention it was Snap, with Wilk mentioning that the company will run safety checks across all sponsored links to make sure there aren’t any privacy violations.

Despite the assurances, the comments come amid recent reports of parents and internet experts expressing concerns about how Snap’s new chatbot might interact with younger users when it comes to data privacy, mature content topics and other safety concerns.

“We’re taking our time to build the right, useful and again privacy-first experience for our users,” Wilk said during his on-stage remarks.

Shooting for scale

When it comes to scale, Snap said its advertisers can now reach 750 million users on Snapchat every month and said 50% of U.S. users are 25 and older. The company also said that 350 million users watch “spotlight content” each month with fourth-quarter watch time — double what it was a year earlier. Snap’s also scaling its Spotlight product for advertisers globally. And it touted the scale of its augmented reality tools, mentioning that users engaged with AR lenses almost 2 billion times during the 2023 Super Bowl.

The company also highlighted its progress with creators and said users watch content from “Snap Stars” more than 35 billion times a month. It also announced a new “Snap Star Collab Studio” in partnership with influencer agencies Whalar, Influential, Beeline By Brat and Studio71 that will help advertisers work with Snap Stars. (TikTok introduced a similar offering last fall with its Creator Marketplace.)

Peacock also touted its ad-supported scale, saying its One Platform tech stack reaches 227 million adults monthly. 

At Roku, the company is adding new spots for advertisers, including a new ad placement on its “Roku City” screensaver, which VP of Ad Revenue and Marketing Alison Levin said reaches 40 million homes every month. This summer, McDonald’s will become the first advertiser to appear on the ad spot, but Levin said the company’s also reserving “a few category-specific” spots for other advertisers. (Roku’s also adding ways for advertisers to get in front of viewers looking for content through new garden and sports experiences on the platform’s home screen.)

Rather than pitting itself against other streaming platforms, Roku President Charlie Collier said, “The future of TV advertising will be platform-firm.”

“Roku is not fighting for turf in the streaming wars,” Collier said. “Roku is the turf. … The streaming wars are playing out on our platform.”

Ads for long-form video

Peacock’s pitch to advertisers focused on ad-supported, long-form content like movies, in contrast to YouTube’s presentation on the first day of the NewFronts in which the company focused on short-form video. Kelly Campbell, president of Peacock and direct to consumer, said Peacock had doubled its paid subscribers year over year — to 22 million. Peacock’s growth could also be tied back to the investment being put into the streaming platform. In recent Q1 2023 earnings for NBCU parent company Comcast, Peacock had $704 million in losses, up from $456 million of losses in Q1 2022.

Two out of three Peacock subscribers have watched at least one Universal pay-one window film, Campbell said. (Since 2022, all Universal Filmed Entertainment Group’s theatrical releases are available exclusively on Peacock for the first and last four months of a traditional 18-month pay-one period.) Peacock sells extended pre-roll ads that appear before a movie, rather than commercial interruptions. 

Peacock also highlighted four new ad formats. Spotlight+ is a full brand takeover of a show. Marquee ads can integrate a brand into live, streaming content, such as a sports scoreboard. Power Break is Peacock’s version of a pause ad, with creative that can change based on household data. And ShopTV allows a viewer to shop products directly from streaming video content.

Meanwhile, WGA members are in the middle of a strike and picketed outside of the Fifth Avenue venue where Peacock’s NewFronts presentation was taking place. Actress Edie Falco was scheduled to appear during Peacock’s upfront to discuss her new series, but backed out so as not to cross the picket line, according to a tweet.

Where’s Vice?

Vice Media Group hasn’t participated in NewFronts since 2021. On Monday, The New York Times reported that the company is preparing for bankruptcy, following news that it has shut down its Vice World News division. It’s hard to believe that just four years ago, Vice hosted a splashy party for advertisers at the massive Jing Fong banquet hall in New York City, with white tablecloths, tables laden with dim sum and a concert featuring singers like Teyana Taylor, Danny Brown and Coi Leray.

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Thanks to Wurl for sponsoring Digiday’s Future of TV Week coverage and presenting this edition of the Digiday+ Future of TV Briefing, normally available exclusively to paying subscribers.

This week’s Future of TV Briefing recaps Digiday’s five-part video series on the TV, streaming and video advertising business.

• The future in review

The future in review

Digiday’s Future of TV Week is in the past and with it the debut of “The Future of TV,” a five-part video series on the TV, streaming and digital video ad business. 

The series covered a lot of ground. How traditional TV vs. streaming ad spend might trend this year. How the premium ad-supported streaming war is shaping up and the short-form vertical video battle is playing out. A check-in on the connected TV ad tech turf war. And an assessment of the TV ad industry’s progress on the measurement multi-currency front.

Here are some of my top takeaways from the series. And be sure to check out the full episodes that are available to watch here.

The streaming ad spending tipping point

This year will likely be the year that streaming ad spending equals, if not overtakes, traditional TV ad spending. That’s according to investment chiefs from Horizon Media and UM Worldwide who appeared in the series’ first episode.

Horizon Media’s Dave Campanelli speculated that the shift could happen in this year’s upfront market, whereas UM Worldwide’s Stacey Stewart posited the possibility of it happening outside the upfront in the overall TV and streaming ad market.

Whether it happens within the upfront or not, streaming usurping traditional TV’s share of overall TV and streaming ad spending would be a big deal. The question then becomes whether that tipping point turns into a rubicon or whether the situation reverts next year if the economy improves. 

On a similar note, it remains to be seen how TV advertising’s legacy upfront model evolves with Stewart expecting spending to be down in this year’s upfront market and all executives seeing a need to remodel the upfront. “Flexibility” and “fluidity” are the top terms being bandied about to describe how the upfront model needs to change, as the mix of players participating in the upfront has already changed to include the likes of YouTube as well as traditional TV and streaming ad sellers.

“The term ‘upfront’ has really evolved. It’s not really about TV anymore. It’s really about premium video and premium inventory,” said OMD’s Stacey Larson.

Streaming’s disproportionate supply-demand dynamic

When Horizon Media’s Michael O’Connor said in the second episode that the streaming ad supply exceeds advertiser demand, I was kind of taken aback. I had gotten so used to hearing how advertisers’ demand for streaming inventory outstripped inventory availability. And yet here we are.

Then again, while agency executives said the overall streaming ad market has a surplus of inventory, the story is different when it comes to top-tier streamers like Netflix and Disney+.

“We know that some of these premium ad-supported tiers that just came into the marketplace did come in with very limited and-or no targeting,” said Havas Media’s Laurie Crowley.

What will be worth keeping an eye on now is to what extent these services accumulate enough audiences to offer narrower targeting options as well as whether they increase their ad loads or relax their frequency caps to accommodate more advertisers.

“One thing you you start to see a bit is, sometimes with those frequency caps, a publisher might start to hit some scaling issues,” said Tatari’s Vicky Chang.

If TikTok is banned, short-form vertical video will survive

TikTok remains the central pillar of brands’ short-form vertical video strategies, but if the app were to be outlawed in the U.S., executives from Digitas North America, Mekanism, Team One and VaynerMedia said in episode three that brands’ attentions will focus on Instagram Reels, YouTube Shorts and even Snapchat.

“Should TikTok be banned in the United States, we would still see vertical video have a place in our social plans,” said Team One’s Linda Ranieri.

“Short-form vertical video is definitely in the must-buy category now,” said Mekanism’s Brendan Gahan.

All of that being said, not all short-form vertical video platforms are seen by ad buyers as being the same. Instagram Reels and YouTube Shorts, for example, benefit from plugging into Meta’s and Google’s broader ad platforms, respectively, which can make them more attractive to performance marketers. 

And while Snapchat has taken a backseat to TikTok, Instagram Reels and YouTube Shorts in agency execs’ eyes, they are eyeing the platform in the event that TikTok were to be banned.

“They’re one that folks talk about being a sneaky winner if there is like a full-tilt TikTok ban because, you know, the Gen Z jump ball,” said VaynerMedia’s Jon Morgenstern.

CTV ad tech asserts itself

Programmatic has become an important component of buying ads on streaming services and connected TV platforms, and ad tech firms, like demand-side platforms and supply-side platforms, are seeking to separate themselves from one another.

With respect to DSPs, advertisers are needing to support multiple DPS to parcel together their programmatic streaming ad buys given that some DSPs have exclusive access to inventory or first-party data sets. Of course, the addition of multiple DSPs can compound the costs to advertisers, which is why a preferred approach is to enlist one primary DSP supplemented by others. Two to three DSPs is typically the sweet spot, according to Digitas North America’s Leah Askew, Mediahub’s Mike Piner and Tinuiti’s Jesse Math.

“Two or three max. Then you’re just adding too many fees to the supply chain,” said Piner in the series’ fourth episode.

Speaking of the streaming’s programmatic supply chain, it’s tightening up. DSPs are striking deals directly with streaming services, while SSPs are seeking to get closer to advertisers. The latter set of ad tech firms are particularly under pressure as the supply chain streamlines.

“The SSP marketplace boomed into complexity. Now we’re going to start seeing it get more simple because, unless you are providing explicit value in how you’re packaging this inventory and also providing transparency — because I think that’s heavily criticized across SSPs right now — then if you’re not driving that value, then you might get cut out,” Askew said.

Measurement is still kind of a mess

The work is underway to update the TV ad industry’s measurement system, but there’s still a lot of work to be done, as outlined in the series’ fifth and final episode.

“There’s not enough consistency across all of the new currencies for us to execute a buy across every partner we want to execute a television buy against on one of these new currencies,” said Omnicom Media Group’s Kelly Metz.

Case in point: Warner Bros. Discovery recently announced support of Comscore and VideoAmp as measurement currencies but not iSpot.TV, the candidate that NBCUniversal has been pushing. Meanwhile, Disney has yet to get behind any currency contender aside from Nielsen.

“The sell side is not unified on acceptance of alternate currencies. So forget whether measurement partners are ready, agencies are ready or the clients are ready,” said GroupM’s Bharad Ramesh.

And then there’s the necessary technical work required to be able to support various measurement providers as currencies as well as the question of how advertisers and agencies will account for the corresponding increase in costs. Not that any of that will undo the process.

Then again, there’s still the question of how expansive this new measurement landscape should be. Specifically, should it include YouTube? Fortunately, for all the messiness, agencies have a clear answer on that one: Yes.

“Practically speaking, you really can’t be a currency unless you’re available at scale across as many providers as you possibly can be,” said Metz.

What we’ve heard

“One issue that is an issue if you’re a YouTuber or a TikToker or on Instagram is the timelines and deadlines in regards to branded content are very rarely reasonable.”

— Talent manager

What we’ve covered

Why creator Jorge Soto prioritizes YouTube Shorts over TikTok:

• Shorts provides a viewership pipeline for Soto’s long-form videos on YouTube.
• While Shorts only generates $0.05-$0.06 per thousand views, the revenue from Shorts-driven long-form views can be exponentially higher.

Listen to the latest Digiday Podcast episode here.

Gen Z, diverse audiences the focus of ad-supported streamers, platforms and publishers on NewFronts day one

• YouTube, Vizio, Amazon and a range of minority-owned media companies pitched their content, audience reach and ad offerings, with a focus on their ability to engage specific audiences
• Ad spend in the U.S. grew twice as fast in the digital video space compared to the overall digital media market in 2022

Read more about NewFronts coverage here.

Why BuzzFeed News couldn’t replicate HuffPost’s business model

• HuffPost had more than double the audience BuzzFeed News had, CEO Jonah Peretti told Digiday, and as a result, HuffPost’s revenue was “much bigger” than BuzzFeed News’.
• BuzzFeed’s entertainment content was “10 times bigger than BuzzFeed News ever was,” Peretti said.

Read more about the demise of BuzzFeed News here.