Future of TV Briefing: Upfront ad sellers prep performance-based pitches to address ad buyers’ ROI obsession

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This week’s Future of TV Briefing looks at how TV and streaming ad sellers are looking to make more outcome-oriented pitches in this year’s upfront market.

  • The upfront outcome outlook
  • Amazon Prime Video’s new ad formats, Publicis Groupe’s measurement currency stance, MrBeast’s management move and more

The upfront outcome outlook

What are TV and especially streaming ads actually worth?

The question is not new, but it seems set to be more in the fore of this year’s upfront negotiations, especially as ad buyers agitate against streaming’s relatively higher prices, as covered in Digiday’s recent “The Future of TV” series, and as TV and streaming ad sellers angle to raise their ad prices in this year’s upfront market.

“It’s obvious to us that we need to earn higher prices in the market,” said an executive at one TV network and streaming service owner that plans to raise its streaming CPMs in this year’s upfront negotiations.

As the executive indicated, TV network and streaming owners anticipate that advertisers and agencies will press them to prove that their ads can not only raise brand awareness and product consideration but also deliver business results, such as site visitors and sales.

“The fact is that particularly connected TV is a full-funnel product, and what retail media has enabled in providing transparency around shorter-term outcomes is a very, very important theme in terms of how budgets get allocated. And we’re leaning into it heavily,” said a second TV network and streaming executive.

The increased importance of connecting TV and streaming ads to business outcomes should probably be expected in an upfront cycle that will mark the first for Amazon to pitch Prime Video’s ad-supported tier. Rival TV network and streaming service owners have been lining up their own alliances with various retailers. Last year Disney signed a deal with Kroger, Paramount has aligned with Walmart, NBCUniversal — which also has a deal with Walmart — has joined forces with Instacart, and TelevisaUnivision — as well as Paramount — have enlisted ShopSense AI.

“You want to put point-of-sale for the clients in hand. I think we’re in the infancy stage. I mean, we’re all trying to figure it out,” said a third TV network and streaming executive.

A fourth TV network and streaming executive said their company provides always-on dashboards for ad buyers. These dashboards provide real-time looks at how ads are driving increases in performance-based metrics like web traffic and app downloads as well as upper-funnel metrics such as brand lift. “Depending on what the client wants to do, we want to be able to give them that,” said the executive.

Ultimately, what advertisers want TV networks and streaming services to give them are business results, whether that means product sales, site traffic, etc. And one way to ensure those outcomes are achieved is to have them be the basis of transactions. But the TV and streaming ad market isn’t quite ready for outcome-based buying, in which the traditional CPM is replaced with a CPA model (the “A” standing for action, such as click or purchase).

“That’s a very tough road to cross,” said the second executive.

Among the obstacles to outcome-based buying is that the industry is still developing systems to attribute TV and streaming ads to site visits and product sales that can provide standardized looks across the spectrum of TV networks and streamers. And not only across TV and streaming but other media channels, such as social media platforms, in-store marketing, etc.

“There’s really no standards here. Each agency kind of has to set up their own standards and their own benchmarks and, like, maybe measure things consistently for each campaign,” said the fourth executive.

As a result, this year is seen by the executives as an opportunity to set those benchmarks. Whether they end up being used as the transactional basis for buys or simply a means to gauge ROI can be a future concern.

“We’re a ways away from being able to trade on outcome-based metrics. But we are in a period where we can at least describe what those are, so that a buyer, an advertiser could understand the relative value of media formats and players within those formats,” said the second executive.

But another obstacle is a general murkiness around to what extent TV networks and streaming services not only can be credited for delivering outcomes but, as importantly, should be held responsible if outcome deliveries fall short.

“The fundamental issue sometimes is, if I did a guarantee on outcome, sometimes it’s a disconnect between what really has affected [the results],” said the third executive. They added, “What if [the advertiser’s] product just isn’t good? What if [the viewer] actually went [to an advertiser’s destination], but then they didn’t like the product or the outcome or the website or wherever I drove them to? And what if the experience wasn’t great? That’s not the salesperson’s control.”

Another consideration is that orienting TV and streaming ad buys directly around outcomes risks reducing campaigns’ reach, which then dilutes their historical strengths for raising brand awareness and product consideration. “There’s a notion at each [agency] holding company that you can ROI yourself out of market share. If you’re an insurance company, you could become really efficient but lose 10 points of market share,” said the first executive.

For as much as TV networks and streaming services are trying to skate with the proverbial puck toward performance-minded marketing, they are also being mindful not to veer away from what has made ads on TV screens so valuable in the first place.

“In its history, TV has always talked about awareness of perception, and it is the best format in the world for that. There is no question that it’s the best product ever invented for top of the funnel,” said the second executive. “But we also have to make our case for mid-funnel [and] lower-funnel. And that’s what we’re doing.”

What we’ve heard

“So Nielsen’s big data [measurement system], we’re ready to go on that. We’ve heard only one agency that told us they were ready to go on it, and some of the others have said that they’re not ready yet.”

TV network executive

Numbers to know

54 million: Number of U.S. subscribers that Disney+ had at end of the first quarter of 2024.

22%: Estimated percentage share of Netflix subscribers that are on its ad-supported tier.

$76 billion: How much money the NBA is looking to land in its current rights negotiations with TV networks and streaming services.

$26 billion: How much money Sony Pictures and Apollo are offering to acquire Paramount.

What we’ve covered

Marketers say demographic data is most important for ad targeting on streaming platforms:

  • A majority of respondents in a Digiday survey said demographic data is the most important first-party data category for streaming campaigns.
  • Surveyed advertisers prefer targeted audience capabilities over total audience reach.

Read more about marketers’ streaming ad demands here.

How CTV platforms are pushing non-traditional ad formats — but not too far:

  • Roku and Vizio are adding video ads to their home screens.
  • Samsung is rolling out an interactive trivia format that will replace standard ad breaks.

Read more about CTV platforms’ ad formats here.

Agencies debate biggest questions over TikTok’s future:

  • Agencies have not received much guidance from TikTok in light of its potential ban/divestment.
  • Some agencies have received a document outlining TikTok’s user data security, ByteDance’s corporate structure and a security implementation timeline.

Read more about TikTok here.

TikTok and Meta pitch short-form video offerings and AI tools on the final day of NewFronts:

  • TikTok announced updates to its Pulse program and new measurement tools.
  • Meta unveiled new options for Reels ads and AI-powered products.

Read more from NewFronts day 4 here.

Diverse-owned media companies tout their multicultural audience reach, plus a Q&A with IAB’s CEO:

  • IAB CEO David Cohen addressed the role of NewFronts as YouTube, Amazon and Netflix opt to present during Upfronts Week.
  • Raptive, Canela, Estrella and others pitched their reach among multicultural audiences.

Read more from NewFronts day 3 here.

What we’re reading

Amazon introduces new ad formats:

The e-commerce giant will add shoppable carousel ads, interactive pause ads and interactive trivia ads to Prime Video’s portfolio, according to The Hollywood Reporter.

Publicis opts against Nielsen’s alt currency option:

Publicis Groupe has decided not to use Nielsen’s panel+big data measurement option as a currency in this year’s upfront market, according to Broadcasting & Cable.

Roku is on deck for MLB rights:

The connected TV platform owner and sports league are discussing a deal that would have Roku air Sunday morning baseball games, according to The Athletic.

MrBeast makes a management move:

YouTube’s top star, Jimmy “MrBeast” Donaldson, has told his management company Night Media that it will no longer be his primary representative as he looks to take the reins of his business, according to Semafor.

ABC News’ president departs:

Kim Godwin has decided to step down after three years and as the Disney-owned news network heads into this year’s U.S. presidential election cycle, according to The New York Times.

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