Future of TV Briefing: Top takeaways from ‘The Future of TV’ video series

Over three episodes, agency executives from across the industry laid out not only the state of the streaming ad marketplace but also its infrastructure as well as its product. Yes, each of those areas shares in the fragmentation, but with different facets.

With the third and final episode of “The Future of TV” now available, here are the top takeaways from the series:

The streaming ad market is fragmented

The first episode laid out the theme of the entire series, but with some notable nuances.

As Publicis Media Exchange U.S.’s Shelby Saville and UM Worldwide’s Marcy Greenberger explained, the supply of streaming ad inventory exceeds the level of advertiser demand, and Amazon Prime Video’s entry into the market has only added to that imbalance. This has created what Carat’s Michael Law described as “scaled fragmentation,” where top streaming services have scale but that must often be dealt with in silos.

To deal with these silos, ad buyers would like to execute more of their streaming ad buys programmatically, which can help to mitigate overlapping ad exposures while managing audience reach across streaming services. But at the same time as they want to unify their streaming ad buys, they also want the streaming services to differentiate their ad offerings. How to thread that needle seems like a good candidate for a future briefing…

Sports could help to solve streaming fragmentation

Programmatic is one way to glue back together fragmented audiences in streaming, but not the only one.

With the likes of Amazon, NBCUniversal, Paramount and YouTube streaming major sports — not to mention the upcoming sports streaming joint venture from Disney, Fox and Warner Bros. Discovery — traditional TV’s most popular programming is becoming more prevalent on streaming. That’s important for preserving advertisers’ ability to reach a large, concurrent audience, and it can lower the barrier to entry for advertisers, according to Horizon Media’s Samantha Rose and Walton Isaacson’s Albert Thompson.

Streaming also affords advertisers capabilities not as available on traditional TV, such as being able to dynamically insert ads and to purchase impressions programmatically. OMD’s Kelly Metz mentioned NBCUniversal’s plan to sell Olympics inventory programmatically. But Havas Media Network’s Jeff Gagne noted how a balance needs to be struck between updating the traditional sports ad model in streaming while protecting league sponsors who may be wary of the floodgates opening too much too soon.

Streaming’s identity picture is a mismatched mosaic

Streaming doesn’t have a cookie problem, but it does have its own identity issues.

With the IP address being an unreliable identity mechanism, advertisers are turning to alternative IDs to collate streaming audiences into coherent cohorts. The problem is, these alternative IDs are far from universal, as Digitas North America’s Leah Askew, Known’s Kasha Cacy and Mediahub Worldwide’s Michael Piner explained.

Lacking universality, advertisers and agencies have to sort out which IDs are supported by which streaming ad sellers as well as which ad tech intermediaries. But the work doesn’t stop there. They then have to determine how well the IDs match between buy side and sell side, which is far from a given and can actually derail deals from being executed.

Measurement is a work in progress

Measurement may be the biggest motivator for streaming advertisers to adopt alternative IDs, but GroupM’s Bharad Ramesh recounted how streaming ad measurement has its own issues.

Naturally, fragmentation is one of those issues. Specifically, the issue is streaming services not all accepting the same tags that are used to measure audiences and ad exposures.

The industry is trying to tackle this issue by erecting an ID spine that uses first-party data to create a more comprehensive measurement system, and Ramesh said he’s hopeful that will be in place a year from now. Although there’s still the question of how to reconcile streaming and traditional TV for cross-platform measurement…

CTV platforms are central to streaming ad strategies

Connected TV platforms — especially those built into smart TVs — are sitting in the catbird seat when it comes to the streaming ad market. They represent the closest endpoint to audiences, according to Dentsu’s Emily Kennedy and OMD’s Kelly Metz. And, as Magna’s Carolina Portela noted, they are able to sell ads across third-party streamers as well as their own properties.

But even connected TV platforms can contribute to the broader sense of disconnect.

For example, the data from smart TVs’ automatic content recognition (ACR) systems is valuable for getting a comprehensive picture of audiences’ viewing habits across streaming services. But ACR data taxonomies can differ from one smart TV maker to another, which can make them hard to reconcile, said Dentsu’s Brad Stockton.

And then there’s the question raised by Metz and Tinuiti’s Shasta Cafarelli of whether one of the most prominent purveyors of ACR data — Vizio — will continue to license that data to the broader marketplace if and when its acquisition by Walmart goes through.

Streaming ads need an update

One area of the streaming ad market that isn’t so fragmented is the streaming ad product. Potentially, to a fault.

The traditional TV ad format — 15- and 30-second spots — predominates the streaming ad market. But as Horizon Media’s Samantha Rose and PMX Lift’s Cullen Deady noted, there’s an appetite among advertisers for newer streaming ad formats.

Ads on CTV platforms’ home screens are the most obvious opportunities that Dentsu’s Brad Stockton and Magna’s Carolina Portela said advertisers have their eyes on. Other non-traditional ad formats, like pause ads and shoppable ads, are also attractive, said Tinuiti’s Shasta Cafarelli and UM Worldwide’s Marcy Greenberger. But these non-traditional ad formats can be more expensive than the standard streaming ads that advertisers already consider pricey. Plus, shoppable ad formats are still unproven.

Nonetheless, as Carat’s Michael Law identified, there’s a need for non-traditional ad formats in streaming, if only to avoid an overabundance of interstitial ads annoying viewers to the point of them turning to services’ ad-free tiers.

What we’ve heard

“We’ve had some cases where IDs are mismatching, and deals can’t get off the ground.”

— Digitas North America’s Leah Askew in episode 2 of “The Future of TV” video series

Numbers to know

$30 billion: How much money the entertainment industry is leaving on the table because of racial inequity in TV shows and movies.

71 million: Number of paid subscribers that Paramount’s Paramount+ had at the end of the first quarter of 2024.

34 million: Number of paid subscribers that NBCUniversal’s Peacock had at the end of Q1 2024.

$2: By how much Peacock is increasing the monthly subscription price for both its ad-supported and ad-free tiers.

81.6 million: Number of active accounts that Roku had at the end of Q1 2024.

$22.7 billion: How much money advertisers are expected to spend on connected TV ads this year.

$8.1 billion: How much money advertisers spent on YouTube ads in Q1 2024.

422 million: Number of daily active users that Snapchat averaged in Q1 2024.

16: Number of the top 30 podcasts in Q4 2023 that were available to watch as videos.

-405,000: Number of pay-TV subscribers that Charter lost in Q1 2024.

What we’ve covered

Roku is set to reveal a tie-up with The Trade Desk as the streaming platform further opens up programmatic access:

• Roku announced a deal with The Trade Desk ahead of its NewFronts presentation on Tuesday.
• The CTV platform owner touted its programmatic business during its most recent earnings call.

Read more about Roku here.

Google, Vizio and news publishers pitch marketers with new ad offerings and range of content categories:

• Google wants advertisers to centralize their streaming ad buys to its web-dominant DSP.
• Vizio focused its presentation on its home screen and announced new content hubs and ad formats, including pause ads.

Read more about NewFronts day 1 here.

Amazon, Apple, Oracle rumored to be potential TikTok buyers if ByteDance is forced to sell:

• Industry observers speculate on who might buy TikTok.
• ByteDance reportedly is not interested in selling TikTok and would instead shut down the platform in the U.S.

Read more about TikTok here.

While Biden signs the TikTok bill, marketers still aren’t panicking:

• Big companies are likely to simply shift spend from TikTok to Meta and Google.
• The shrug-emoji sentiment signals how TikTok has yet to become a major line item in some advertisers’ budgets.

Read more about TikTok spend here.

Influencer agency Billion Dollar Boy offers creators a membership program, with benefits:

• Instead of helping creators selling subscriptions, the program will sell creators on access to physical space in London as well as educational resources, events and platform access.
• BDB will sell memberships in tiers but has not disclosed pricing.

Read more about Billion Dollar Boy here.

What we’re reading

Paramount’s CEO steps down:

As its parent company National Amusements nears a potential sale to Skydance Media, Paramount Global CEO Bob Bakish has resigned, and the company has replaced him with a three-headed executive office, according to CNBC.

Skydance’s latest offer for Paramount:

Paramount’s primary suitor has put $3 billion in cash on the negotiating table, which the media company could use to pay down debt, buy back stock and ultimately assuage shareholders unhappy about the proposed deal, according to The New York Times.

Amazon nears deal for NBA rights:

The e-commerce giant has “the framework of a deal” in place with the NBA to stream games on its Prime Video streaming service, according to The Athletic.

NBCUniversal also wants NBA rights:

Peacock’s parent company is planning to offer to pay $2.5 billion per year to secure rights to air NBA games, according to The Wall Street Journal.

Spulu’s upfront debut:

Disney, Fox and Warner Bros. Discovery will include inventory from their upcoming sports streaming joint venture as part of their respective upfront pitches this year, according to Variety.