Expert Take: Approaching Convergent TV Advertising in its Most Dramatic Season Yet

Sit down, Sopranos. Back up, The Bachelor. Get lost, Game of Thrones! The latest season of TV upfronts might be more dramatic than all three of you combined.

OK, we’re exaggerating…but only slightly. The real-world story has progressed so quickly and taken so many twists and turns that it’s felt like one of those shows you kind of have to read the recaps for. Assuming that’s why you’re here, we’ll get right to it:

Let’s start with one of the biggest stories of the moment: On May 2, the Writer’s Guild of America (WGA) went on strike to pressure the Alliance of Motion Picture and Television Producers (AMPTP) to provide a fairer contract, citing “business practices [that] have slashed [their] compensation and residuals and undermined [their] working conditions.”

At the same time, there’s massive churn happening across the industry in terms of personnel. From major layoffs at Disney, to Don Lemon’s exit from CNN and Tucker Carlson’s exit from Fox, to NBCU’s loss of its CEO and its Chairman of Global Advertising and Partnerships (who’s gone on to become Twitter’s new CEO) shortly before the upfronts, many linear and streaming giants are experiencing some major upheaval. As to how these changes will impact their advertising businesses, there’s a whole lot of uncertainty—both in the short and long term.

Then there’s the convergence we’re seeing in the historically fragmented landscape of streaming TV, with the introduction of Max, which has combined the content libraries of HBO Max and Discovery+, and reports of Comcast planning to sell its stake in Hulu to Disney in 2024 as the House of Mouse plans to fold Hulu’s library of content into Disney+ to create its own mega-app later this year.

While digital video represented about half of ad spending in last year’s upfronts, that share has grown to roughly two-thirds this year, with linear’s YoY share decreasing significantly as advertisers move their dollars over to digital.

So yeah, just a few small things for advertisers to keep track of.

To help you make sense of it all, we called in two of our experts, Susan Mandell, VP of Brand Development, and Paul Morrone, Integrated Client Solutions Director. Below, they explore all the biggest questions on advertisers’ minds and provide recommendations for how to weather the wild, wild west of convergent TV in 2023.

How will the writer’s strike affect advertisers?

Paul Morrone: The first domino to fall was late night TV. Programs like “The Tonight Show,” “SNL,” and “Jimmy Kimmel Live” are already running reruns instead of new episodes. The second domino to fall, if the strike continues until mid-June or so, will be a delay in production for new seasons and new content starting in the fall.

Susan Mandell: We’re seeing a lot of volatility with the actual people who create the content—and not just the writers. With the Screen Actor’s Guild and the Directors Guild preparing to negotiate their contracts as well, we don’t know what’s going to happen. Will it be a united front among the unions? So far, they’ve stuck together and shown more unity than back in 2007-2008. But Fran Drescher (President of SAG-AFTRA, whose contract with the Alliance of Motion Picture and Television Producers expires on June 30) is talking about very different issues than the Writers Guild, and for the studios to address all of them, it’s going to be challenging.

If it does come to a point where there isn’t anything new coming out, people will be going back to CTV channels and their giant mass of content to find something that they haven’t watched before.

Given all these changes, how should advertisers step back and reconsider their convergent TV spend?

SM: In this moment, if you’re advertising on those late-night TV programs that are unexpectedly showing reruns, you’re likely not going to get the consumers you thought you were, because they’re moving their eyeballs to content that’s new to them—whether that’s a show they haven’t watched before, a new streaming program, or a new podcast. In many instances, they’re not finding that new content in linear right now.

The question becomes, how do marketers pivot their current or traditional marketing plans in an effort to really be in front of the right people? If you want to be in front of the right people on video, you can certainly do that on social channels like TikTok, Meta, YouTube. But there’s also the CTV angle, where you can really connect to a specific audience that you weren’t able to with linear. For example, you can use an audience segment of people who have done X, Y and Z, or who fall into a certain demographic, and reach them specifically where they’re viewing their content.

This is a really interesting moment for advertisers to think more about personalization and who their consumers are, who their target consumers are, what consumers drive the lowest customer acquisition rate and the highest lifetime value. How do you target those consumers to generate new revenue streams or new subscribers or whatever you may be selling? If you’re thinking about how to maximize your dollars without wasting impressions on the wrong people, gearing it towards digital—think social and CTV—makes sense right now as eyeballs move away from linear to find new content.

Let’s talk transparency. How will advertisers know they’re reaching their target audiences if they’re moving dollars to CTV?

SM: When you think about linear, the guarantee you have is that time slot, right? You can see your ad and know that it checks all the boxes, but outside of that, there’s little that you’re able to do from a targeting perspective, outside the show.

In digital environments, there are more opportunities to get consumers to interact—and for advertisers to see and track those interactions—than we’ve ever had in linear. On YouTube TV, for example, consumers can click to get more information on each ad as it pops up.

Typically, CTV ads that work really well are those with QR codes or those that have immediate calls to action. And this is an interesting moment where people tend to have their phones or devices in their hands while they’re watching TV, so they’re already ready to interact.

Given all the upheaval and unpredictability in the current TV landscape, what else should advertisers be prioritizing right now?

PM: One of the things that I find really interesting about this moment is that it shows how quickly a lot of things can change in this space. Constant change is going to be the new normal. We’ve seen an abundance of streaming platforms trying to go to market, convergence of content with Max and likely Disney, and that tumult is going to continue because not everyone’s going to be able to survive.

Agility, the ability to react quickly, is critical right now. I’d almost recommend embracing something like a sense of adventure—a test and learn approach is really key.

SM: You’ve got to be flexible, and the digital space affords a lot more flexibility than we’ve ever had in linear. In this space, you can move dollars from a display campaign to a video campaign with three clicks of a button. For marketers to be agile and have their dollars flow in and out of mediums depending on what’s working and where people are, being in the digital space or the CTV space is really the best way to meet your consumers where they are.

Not to say that linear isn’t one of the strongest mediums out there—it absolutely is. But there are alternatives now that give marketers more flexibility to reach the right consumers without the price tag or the volatility that we’re seeing in linear.

Approaching Convergent TV: Wrapping Up

Phew! This might be one of those seasons you want to watch a second time, just to make sure you catch it all. To recap the recap, here’s what advertisers should know:

In light of the writer’s strike and larger audience trends, advertisers may want to consider moving some of their linear dollars over to digital video to capture audience attention on the channels where consumers are spending time. And with major changes seeming to happen more and more at the broadcast and streaming giants, digital offers advertisers the agility necessary to act swiftly in reaction to whatever plot twists come down the line.

Luckily, there’s one thing that’s certain: TV is one drama that won’t get cancelled anytime soon.

If you’re ready to lean into connected TV, but want more information on how to do it right, check out our connected TV advertising guide for the latest data, trends, and best practices.

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