Media Buying Briefing: ‘It’s tough to fight City Hall’ Why more TV ad dollars aren’t following audiences to digital and social video

This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →

Although it generated a few headlines when it was announced in late February, YouTube’s move to present its content wares to media buyers and clients smack in the middle of “upfront week” when the main broadcast and cable networks present, wasn’t quite earth-shaking news. But should it have been? 

Should linear TV be worried that the single largest generator of ad revenue (Google) in media has put a target on the $20-billion-plus upfront marketplace in a bid to suck up a larger share of dollars? And more broadly, should media buyers and their advertiser clients be thinking beyond linear TV, given the inexorable trend away from TV viewing in the classic sense and toward Gen Z-driven platforms like TikTok, Snap, Twitch and even Instagram, as well as YouTube?

That’s not really happening yet, and one major head of investment at an agency holding company, who declined to speak for attribution in order to speak more candidly, thinks they know why. 

“A lot of our clients are tied to these market mix models, and a lot of those models don’t give digital in general the attention and value that I think the viewer gives to those platforms,” said the veteran buyer. “And those models continue to reinforce spending all your money on linear television.”

Part of the problem, explained Matt Voda, CEO of OptiMine, a cross-channel marketing analytics firm, is that marketing mix modeling in TV remains archaic and time consuming to analyze, especially for advertisers that need to pivot more quickly. “The traditional way of marketing mix modeling will always favor TV because it can’t get to a level of detail” that allows brands to adapt their investment and activation faster as using social video, said Voda. “We’re looking at revenue, not long-term brand impact, but on a dollar-for-dollar outcome, paid social will always outperform TV on a consistent basis when you get down to that kind of detail.” 

As the CEO of one digital video company (who declined to speak on the record in order to not offend potential clients) put it, “What I often hear from agency folks is, it’s tough to fight City Hall — meaning that at the client there’s baked-in inertia from decades of market mix modeling and media attribution that the client believes,” said the exec. “Nobody’s getting fired for recommending what’s worked for the last 20 years.”

And yet, audiences — particularly younger audiences that advertisers have trouble reaching on traditional TV platforms — are flocking to digital and social video, from video games to social platforms. According to recent figures out of Tubular Labs, which measures viewership across the digital spectrum, social video especially outdelivers TV consumption for the Gen Z and millennial audiences by a large margin. Based on February 2022 numbers, Tubular estimated that 25-44 year-olds in U.S. watched 5.85 billion total minutes of the top 10 U.S. media & entertainment creators on YouTube and Facebook alone.

Yes, that’s billion with a B. 

Still, resistance persists. “I’m still not sure the perception of what [YouTube] delivers is the same as the reality,” said the holding company chief investment officer, who said he still gets pushback from clients when he recommends increasing spend in YouTube’s direction. “There are a lot of folks out there who don’t see them as the quality of content that they get on prime time broadcast.”

Josh Schmiesing, CMO of Tubular Labs, said he knows the tide is turning even among media agencies toward making greater use of social video since agencies and marketers are Tubular’s fastest growing client segment. And he likened that adoption rate as akin to the “moneyball” phenomenon in baseball in the 1990s, when new metrics to evaluate players that went against historical norms were introduced to the game — metrics that are de rigeur today. 

“When you understand what people are watching and how to look for those interesting connections in culture, there’s inspiration there beyond a media plan,” said Schmiesing. “What do audiences care about? Where do you belong as a brand or an advertiser? Or if you’re a creator, how do you tap into that? And I think the combination of those things is where things get really powerful.” 

OptiMine’s Voda pointed to another hindrance to any greater shift in dollars from traditional to new forms of video: Brands and their agencies that actively participate in putting down money in the upfront are often a different group than the people who plan for social video spending. “That’s part of the issue, that TV money is managed by a brand team, and paid social typically lives in a different part of the company — and sometimes they don’t even roll up to the same leadership,” he said. “That might be partly why some of those dollars haven’t flowed over.”

But the digital video CEO believes those walls are breaking down and the right questions are being asked more frequently.“It’s hard to see change at the pace its happening when you’re in the midst of it. But we are seeing this omnichannel video-agnostic holistic thing start to gain traction. Teams that weren’t talking to us even two years ago are telling us to come in and give them a 101 course, and help them understand how to think about” this growing market opportunity for their clients. 

Color by numbers

As March Madness grips TV sports (and a ton of bettors) for the next week, a ton of advertising (some of it from betting and fantasy-sports advertisers) has flooded the broadcast and cable networks covering the NCAA college basketball tourney. Elevate Sports Ventures and Hive Analytics studied the first week of games and drew up some interesting stats: 

  • Excluding the ads themselves, the first week generated $165 million in equivalent media value for brands exposed in the games, led by sports equipment maker Spalding, which got 25 hours of screen time through March 20.
  • While media value generated by exposure in the men’s games is significantly higher than the women’s games due (due to higher ratings and commercial spot costs), the average minutes of total brand exposure during women’s tournaments games (89 minutes)  was almost 20% greater than men’s games.
  • McDonald’s, Dodge, Skittles, USAA, and Walmart were among the 12 brands unique to the women’s tournament.

Takeoff & landing

  • GroupM’s Wavemaker landed global media duties for fintech firm Square, with a focus on North America and EMEA. 
  • The major agency holding companies, including Dentsu, Havas Media, IPG Mediabrands, Omnicom Group, Publicis Media and WPP/GroupM have agreed to fund City College scholarships for underrepresented media students. Each holding company will award approximately $30,000 per student, covering the full cost of in-state tuition. 
  • Ralph Pardo, most recently CEO of Omnicom’s Hearts & Science agency, was named the new CEO of Omnicom Media Group North America, replacing Scott Hagedorn … Horizon Media named independent marketing consultant Joe Koller executive vp/managing partner.

Direct quote

“It makes sense for Nielsen to turn down the offer. If Elliott Management’s acquisition of Nielsen goes through it would likely signal the beginning of the end for Nielsen and traditional measurement. I suspect Elliott would sell off what tech they could and milk cashflows where they couldn’t. All the while, it’s unlikely they would invest in new technology.”

— John Hamilton, CEO of TVDataNow, talking about Nielsen spurning a $15 billion purchase offer by a private equity consortium led by Elliott Management.

Speed reading

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