WEBVTT - From Upfronts to NewFronts, Madison Avenue Faces Its Post-COVID Future 0:00:08.160 --> 0:00:11.560 Welcome to another episode of Strictly Business, the podcast where 0:00:11.600 --> 0:00:13.560 we speak with some of the brightest minds working in 0:00:13.600 --> 0:00:18.239 the media business today. I'm Andrew Wallenstein with Variety. May 0:00:18.520 --> 0:00:20.680 is a month with a lot of fronts in the 0:00:20.800 --> 0:00:23.400 media business. We've gone from the new fronts to the 0:00:23.480 --> 0:00:27.840 podcast up fronts and soon enough the traditional TV upfronts. 0:00:28.280 --> 0:00:31.560 With all these different brands pitching themselves to marketers, there's 0:00:31.640 --> 0:00:34.280 no better time to check in with Brian Weezer, global 0:00:34.320 --> 0:00:37.839 president of business intelligence and media agency Giant Blue N. 0:00:38.400 --> 0:00:41.279 He knows the number side of Madison Avenue about as 0:00:41.280 --> 0:00:43.839 well as anyone, so I'm looking forward to hearing from 0:00:43.920 --> 0:00:56.200 him at an interesting time for the advertising business. Welcome 0:00:56.200 --> 0:00:58.920 back to Strictly Business, where I'm talking with Brian Weezer 0:00:59.080 --> 0:01:02.040 blu N about the state of the advertising business in 0:01:02.160 --> 0:01:06.080 the thick of the so called upfront season. Good to 0:01:06.120 --> 0:01:09.760 have you with me, Brian, Uh I say, it's an 0:01:09.800 --> 0:01:13.720 interesting time primarily because of the overhang of the pandemic, 0:01:13.720 --> 0:01:16.520 which I think we can at least characterize as being 0:01:16.520 --> 0:01:18.959 in a light at the end of the tunnel stage. 0:01:19.600 --> 0:01:21.640 And I want to start with how you see where 0:01:21.680 --> 0:01:26.000 we are with COVID impacting the state of the economy globally, 0:01:26.080 --> 0:01:29.959 but more so in the US because the economy impacts advertising. 0:01:30.000 --> 0:01:34.840 The course, Yeah, well thanks for having me here. Uh. There, 0:01:35.000 --> 0:01:39.800 there's a lot of living parts in answering that question. 0:01:40.160 --> 0:01:44.200 I mean, the first thing is to consider the what 0:01:44.240 --> 0:01:47.440 we'd call it easy comparable if you will, when you 0:01:47.440 --> 0:01:51.280 look at one over and it's just going to distort 0:01:51.400 --> 0:01:54.240 numbers for for so much of the economy when you 0:01:54.280 --> 0:01:56.080 look at things on a year of your basis. So 0:01:56.160 --> 0:01:59.120 that's maybe the first part. But even if you start 0:01:59.200 --> 0:02:04.160 to look at the trends that uh compared to say, 0:02:04.160 --> 0:02:08.200 two years ago, you have a number of conditions going on. First, 0:02:08.360 --> 0:02:12.880 we've created a new plateau against which e commerce is 0:02:13.080 --> 0:02:17.200 growing and sustaining pretty rapid pace of growth, far faster 0:02:17.240 --> 0:02:21.760 than would have been true have there not been a pandemic. Um, 0:02:21.760 --> 0:02:27.720 we have massive new business formation, which maybe overlaps with 0:02:27.760 --> 0:02:32.280 that ecmmerce point. It certainly is catalyzed by the pandemic. 0:02:33.120 --> 0:02:36.080 But the fact that there are so many new businesses 0:02:36.120 --> 0:02:40.239 being borned h it's the best illustration of creative destruction 0:02:40.320 --> 0:02:45.000 you can find. Um. Lots of businesses went away and 0:02:45.240 --> 0:02:48.320 truly being replaced by new ones, and that's having a 0:02:48.400 --> 0:02:52.320 different distorting effect on the overall ad market, primarily skewing 0:02:53.000 --> 0:02:55.760 um spending into digital media. And that's what we saw, 0:02:55.840 --> 0:02:58.880 I think, in part in certainly first core results from 0:02:59.080 --> 0:03:02.480 the lakes of Google and Facebook. Um. And then you 0:03:02.520 --> 0:03:06.640 get just general inflation because when when we say it's 0:03:06.639 --> 0:03:09.320 a hot market, we mean hot in terms of an 0:03:09.320 --> 0:03:12.799 economy running hot. We have a lot of juice up 0:03:12.840 --> 0:03:15.960 demand from a lot of consumers with a lot of 0:03:16.000 --> 0:03:19.880 extra money to spend um stimulus driven in many cases 0:03:20.400 --> 0:03:23.120 um at least collectively, because we really do need to 0:03:23.120 --> 0:03:25.640 remember that a lot of people are still struggling, but 0:03:26.280 --> 0:03:32.240 on average, people in the economy are very very able 0:03:32.320 --> 0:03:35.360 to spend money and very willing to do so, and 0:03:35.400 --> 0:03:41.000 that's creating inflationary conditions at a sort of general economy level. 0:03:42.160 --> 0:03:44.560 So what does history tell us about how the ad 0:03:44.600 --> 0:03:48.800 business is typically affected by major events like the pandemic? 0:03:49.080 --> 0:03:51.880 Did the pandemic fit that pattern? Has everything gone as 0:03:51.920 --> 0:03:57.920 you expected? Well back when I was working at the way, 0:03:58.520 --> 0:04:01.920 there really isn't anything to compare to in the United States, 0:04:02.000 --> 0:04:05.640 you know, Actually you can look at uh at what's 0:04:05.680 --> 0:04:09.320 happened you know, Hong Kong Stars or other markets. But 0:04:09.400 --> 0:04:14.120 it's it's almost it's not not big enough to provide 0:04:14.160 --> 0:04:19.920 an apt comparison. Um even a war is not an 0:04:19.880 --> 0:04:25.359 apt comparison, because even during wartime, even in economies with 0:04:25.440 --> 0:04:30.320 total war, you may still have kind of life going 0:04:30.360 --> 0:04:32.680 on in the middle of it in a way that 0:04:32.839 --> 0:04:35.560 wasn't true during the pandemic. For for a few months, 0:04:35.600 --> 0:04:38.240 I mean, things ground to a halt in ways that 0:04:38.240 --> 0:04:42.080 that just doesn't normally happen. So it's really hard to 0:04:42.120 --> 0:04:48.880 compare to anything, certainly in modern history. UM So what 0:04:48.920 --> 0:04:50.479 we can do, though, is we can look to some 0:04:50.560 --> 0:04:56.359 general principles. It's almost too easy, shorthand to point to 0:04:56.440 --> 0:04:59.400 something like economic growth and then try to correlate that 0:04:59.480 --> 0:05:05.320 to advertige that it does correlate with advertising, but it's 0:05:05.360 --> 0:05:10.799 more coincidental because, as I said before and applied before, 0:05:11.120 --> 0:05:16.240 creative destruction is the most important factor that drives advertising growth. 0:05:16.800 --> 0:05:20.600 The very fact that a business that emerged this year 0:05:21.160 --> 0:05:23.840 has a different profile than a business that emerged ten 0:05:23.920 --> 0:05:26.400 years ago, or twenty years ago or forty years ago 0:05:27.360 --> 0:05:31.680 goes a long long way towards explaining what's happening with 0:05:31.760 --> 0:05:33.960 advertising and if you think about the fact that a 0:05:34.000 --> 0:05:40.280 business that formed in say row forming would have been 0:05:40.400 --> 0:05:45.640 incrementally different, right, but a business forming in versus a 0:05:45.680 --> 0:05:50.599 business forming in could be radically different in terms of 0:05:50.680 --> 0:05:53.279 every aspect of what they do and how they do it. 0:05:54.240 --> 0:05:56.320 And so when you think about how that plays into 0:05:56.520 --> 0:05:58.880 marketing and media, I mean, we know that the average 0:05:58.920 --> 0:06:02.160 company allocates are known one percent of their revenue to advertising, 0:06:03.080 --> 0:06:05.400 But what if the new generation of business is being 0:06:05.440 --> 0:06:10.280 formed is more like two something like that is happening, 0:06:10.560 --> 0:06:13.159 and all that extra money is blowing into Google and 0:06:13.200 --> 0:06:18.200 Facebook and Amazon. Yeah, you mentioned those pretty astonishing first 0:06:18.240 --> 0:06:22.839 quarter results. You've mentioned the rise at of e commerce. 0:06:23.240 --> 0:06:25.760 I mean, it seems like the shelter at home lifestyle 0:06:26.000 --> 0:06:29.560 spurred a quantum leap in terms of how central e 0:06:29.640 --> 0:06:32.919 commerce became in the average consumers lives. Though, as you 0:06:32.960 --> 0:06:35.960 also pointed out, e commerce wasn't exactly obscure before. So 0:06:36.360 --> 0:06:40.719 am I actually overstating the e commerce effect? No, that's 0:06:40.839 --> 0:06:44.880 that's that's accurate, Although sometimes we stay e commerce and 0:06:45.120 --> 0:06:49.240 really we're we're just using something really tangible for a 0:06:49.279 --> 0:06:54.080 looser concept of business transformation, right, I mean business transformation 0:06:54.160 --> 0:06:57.040 meaning you know, how businesses are adapting to a world 0:06:57.080 --> 0:07:03.440 that's ever more connect did to the internet. Right, Um, 0:07:03.480 --> 0:07:06.120 the e commerce is just the most tangible example most 0:07:06.120 --> 0:07:08.280 of us can point to. But if you think about 0:07:08.279 --> 0:07:10.800 like digital ordering, right, I mean, just as a constable, 0:07:11.000 --> 0:07:13.920 you know, um, you know the idea that we can 0:07:13.920 --> 0:07:17.840 now call a store or you know, we can arrange 0:07:18.000 --> 0:07:20.920 for the specifics of a transaction and then pick it 0:07:21.000 --> 0:07:23.320 up with that every setting foot in the store, and 0:07:23.320 --> 0:07:26.240 we're using our mobile devices to alert the people in 0:07:26.320 --> 0:07:29.360 the store that we're there. You know, all these different 0:07:29.400 --> 0:07:32.840 elements of using digital technology to drive how we do 0:07:32.880 --> 0:07:35.680 what we do and drive how businesses interact with us. 0:07:37.040 --> 0:07:41.560 All of that accelerated over the last year. E commerce 0:07:41.600 --> 0:07:44.440 again just the most superficial, most tangible thing we can 0:07:44.480 --> 0:07:49.320 point to. Sure, I mean, look, all all signals signals 0:07:49.320 --> 0:07:53.880 are that there's this sharp rebound a foot here. But 0:07:54.080 --> 0:07:56.920 are there any flags on the field. Are there anything 0:07:57.040 --> 0:08:02.000 that could steer the economy or advertising? Uh, in an 0:08:02.040 --> 0:08:05.520 unexpected direction? Oh? Sure, Well we learned nothing from the 0:08:05.600 --> 0:08:08.760 last you know your in event, it's an unexpected things 0:08:08.840 --> 0:08:12.360 can occur. Um. I think that the in the in 0:08:12.440 --> 0:08:15.440 the short term, one of the bigger risks that we're 0:08:15.440 --> 0:08:19.760 certainly mindful of. Is this whole semi conductor shortage issue. UH, 0:08:19.880 --> 0:08:24.400 the idea that almost every free company who's making electronic 0:08:24.720 --> 0:08:31.240 product has a real problem right now because of this shortage. UH. 0:08:31.320 --> 0:08:34.600 And so you pair that with other supply chain issues, 0:08:35.000 --> 0:08:39.080 pair that with input cost inflation, and there are some 0:08:39.440 --> 0:08:42.839 real challenges in the near term. Now the semis issue. 0:08:42.920 --> 0:08:46.400 If I'm not a semi conductor analyst, but certainly UM, 0:08:46.920 --> 0:08:49.960 every automo manufacturer that's reported so far this UH this 0:08:50.080 --> 0:08:54.240 quarter has talked about how it will disrupt second quarter production, 0:08:54.960 --> 0:09:00.760 but they do expect things to even out as your progressives, right, UH, 0:09:00.840 --> 0:09:05.760 it doesn't necessarily impact longer term planning. UH. And at 0:09:05.840 --> 0:09:11.040 the same time, things like input cost inflation is an issue, 0:09:11.760 --> 0:09:15.520 but a manufacturer can always find ways to, you know, 0:09:15.720 --> 0:09:18.680 change how they do what they do. UM. They can 0:09:18.720 --> 0:09:24.640 find ways to certainly raise prices consumers and create inflationary conditions, yes, 0:09:25.240 --> 0:09:28.120 but all else equal, those manufacturers might be just as 0:09:28.120 --> 0:09:30.400 well off. But there's an interesting question to be raised. 0:09:30.400 --> 0:09:31.880 And this is sort of you know, an issue that 0:09:31.920 --> 0:09:36.160 I think Wallster is debating is just how temporary will 0:09:36.320 --> 0:09:38.920 higher inflation be and by the way, are we talking 0:09:38.960 --> 0:09:42.120 about a percentage point or two or something more robust? 0:09:42.480 --> 0:09:46.160 And once you get into a path of inflation being 0:09:46.200 --> 0:09:49.000 out there, do we actually create a sustained levels of 0:09:49.000 --> 0:09:53.720 elevated inflation? So those are arguably potential risks to be 0:09:53.760 --> 0:09:56.760 aware of. Well, we'll have to keep an eye on 0:09:56.760 --> 0:10:00.319 on those issues. Let's let's dig deeper now into this 0:10:00.640 --> 0:10:04.440 new front, up front, old front madness that we're in 0:10:04.480 --> 0:10:08.760 the middle of. I'm curious, you know, every year seems 0:10:08.800 --> 0:10:14.000 to be like a different narrative in terms of these marketplaces. 0:10:14.920 --> 0:10:17.920 Is there anything that's jumping out of you in terms 0:10:17.920 --> 0:10:23.920 of well, this is the year we're learning X. I mean, 0:10:23.960 --> 0:10:26.400 I think that's that's that's not a bad way to 0:10:27.240 --> 0:10:30.720 try to look at it. Um, I would I would 0:10:31.559 --> 0:10:35.800 tend to focus on things like power marketers using television 0:10:35.800 --> 0:10:39.400 and context of other immediate and how that's changing. Um, 0:10:39.440 --> 0:10:41.400 what is the role of television going forward kind of 0:10:41.400 --> 0:10:44.920 in a longer term sense rather than you know, it's 0:10:45.000 --> 0:10:48.680 kind of a point in time as opposed to something 0:10:49.080 --> 0:10:53.319 that reflects a longer term trends that marketers are are 0:10:53.400 --> 0:10:55.600 working around. And let me just elaborate a been on 0:10:55.640 --> 0:11:01.199 that we're going into a period where consumption of television 0:11:01.640 --> 0:11:05.280 in its traditional form is following a pretty dramatic club 0:11:05.559 --> 0:11:09.080 right now. Um, and you and I talked for a 0:11:09.080 --> 0:11:11.080 long time and those of me for a long time 0:11:11.080 --> 0:11:14.160 and known that I you know, back in the late 0:11:14.200 --> 0:11:16.520 two thousand's, early two thousands tens, there are people calling 0:11:16.559 --> 0:11:20.800 me a TV bowl. You know, as an analyst, It's like, no, 0:11:20.920 --> 0:11:23.680 I'm not a bowl. And just observing that the medium 0:11:23.720 --> 0:11:28.280 still growing. It's like consumption holds up generally speaking, it's 0:11:28.320 --> 0:11:31.280 not nothing is getting in the way of of that. 0:11:31.480 --> 0:11:36.200 Those trends that we were seeing last year, something got 0:11:36.200 --> 0:11:40.000 in the way. And it wasn't just the pandemic. It 0:11:40.040 --> 0:11:43.480 was the very fact that you had all all the 0:11:43.520 --> 0:11:48.920 streaming services finally committing to spending billions and billions and 0:11:49.000 --> 0:11:54.559 billions of dollars on original programming. That is a meaningful 0:11:55.000 --> 0:11:58.960 difference between what we saw ten years ago or five 0:11:59.040 --> 0:12:02.840 years ago. And to a UM, all those concerns about 0:12:02.880 --> 0:12:05.440 you know, member back in the early two thousand's that 0:12:05.480 --> 0:12:08.199 where of all the young men gone like men in 0:12:08.320 --> 0:12:11.760 eight thirty four are playing video games, says Massive, the 0:12:11.840 --> 0:12:15.600 video game company, and that became these dominant narratives. Right, well, 0:12:15.640 --> 0:12:20.400 there is never anything to that. Um, this is real 0:12:20.880 --> 0:12:24.240 and because we know, you know, you can roughly estimate 0:12:24.280 --> 0:12:27.440 that globally there's something like a hundred fifty billion dollars 0:12:27.440 --> 0:12:32.160 of spending on uh TV or professionally produced content in 0:12:32.200 --> 0:12:35.319 a year, and Netflix is going to be fifteen billion 0:12:35.360 --> 0:12:38.480 dollars of that. It's not unreasonable to think that they'll 0:12:38.480 --> 0:12:41.440 get about a tenth of ball viewing. And it's not 0:12:41.559 --> 0:12:43.720 like you it goes up by ten to account for it. 0:12:43.720 --> 0:12:46.880 It comes from somewhere, and that Netflix viewing is not 0:12:47.000 --> 0:12:50.320 as supported, it will never be out supported. Then you 0:12:50.480 --> 0:12:53.000 get you know, Amazon Prime, they are going to be 0:12:53.160 --> 0:12:56.079 some number in the high single digit billions on Prime 0:12:56.160 --> 0:12:58.839 Video specifically. And then you look at and there will 0:12:58.880 --> 0:13:02.280 be any adds. They're not many, at least Disney Plus, 0:13:02.320 --> 0:13:05.000 thank Deal, and you go on, well, there will be 0:13:05.040 --> 0:13:08.719 some ads and some certainly Whlue remains that supported, but 0:13:08.760 --> 0:13:11.520 there'll be these uh some of the able oard services 0:13:11.559 --> 0:13:16.839 inside of this UH this realm of content, the available 0:13:16.920 --> 0:13:22.440 advertising inventory is compressing in a pretty meaningful way. And 0:13:22.520 --> 0:13:25.760 that means that the capacity for a marketer to accomplish 0:13:25.760 --> 0:13:27.600 the reach and frequency based goals that they had in 0:13:27.600 --> 0:13:32.160 the past is pretty meaning they altered. So when I 0:13:32.160 --> 0:13:35.600 think about the upfront and I think about the decisions 0:13:35.600 --> 0:13:37.760 that marketers are making, I think about it more through 0:13:37.760 --> 0:13:41.040 the lens of marketers having to figure out what the 0:13:41.120 --> 0:13:43.720 role of television is more generally in their marketing dgics. 0:13:45.559 --> 0:13:48.640 And it seems though as if a big part of 0:13:48.640 --> 0:13:52.560 the pitch from the traditional TV players will be, Hey, 0:13:52.679 --> 0:13:55.480 it doesn't have to be all about linear. We've got 0:13:55.520 --> 0:13:59.680 your back marketers on connected TV. We've got all this inventory. 0:14:00.360 --> 0:14:04.560 Um to me, that seems I mean, while certainly not 0:14:04.640 --> 0:14:07.480 a new trend, uh, it's now sort of in a 0:14:07.559 --> 0:14:11.040 in a more prominent way that I mean, do you 0:14:11.080 --> 0:14:14.520 think it will be sort of transformative? Well no, because 0:14:14.559 --> 0:14:17.200 I mean my my point is that the available at 0:14:17.240 --> 0:14:22.000 support inventory in what most people would reasonably call television. 0:14:22.360 --> 0:14:27.240 Most people meaning consumers, meaning there's no meaningful distinction between 0:14:27.800 --> 0:14:32.040 connected TV linear TV. From a typical consumer's perspective, that 0:14:32.200 --> 0:14:36.880 available inventory is shrinking because if you think about a 0:14:37.040 --> 0:14:40.960 total Internet connected device based viewing is some number like 0:14:42.080 --> 0:14:44.720 all viewing and rising still at twenty or percent a year, 0:14:45.800 --> 0:14:51.160 of that inventory call it half is a third is Netflix, 0:14:52.360 --> 0:14:58.920 another is Amazon Prime, and another five percent is Disney. 0:14:59.040 --> 0:15:02.400 Right there, that's this just take away half of that inventory, 0:15:02.680 --> 0:15:05.600 you know, so you've just lost, call it fifteen percent 0:15:05.680 --> 0:15:09.440 of all available consumption, and then YouTube is that TV 0:15:09.640 --> 0:15:12.160 or not. Those advertisers would still say it's not really 0:15:12.160 --> 0:15:16.600 that comparable. Okay, lop off another five of that available inventory. Okay, 0:15:16.720 --> 0:15:22.840 you've just taken out consumption, right, total consumption in agory. 0:15:22.880 --> 0:15:25.360 It didn't really grow that much. It was eroding. All 0:15:25.400 --> 0:15:27.520 this viewering was going towards and burns which were either 0:15:27.560 --> 0:15:32.000 at supported or not comparable to traditional at base television. 0:15:32.040 --> 0:15:36.680 And so while it's great that a traditional TV network 0:15:36.680 --> 0:15:41.280 owner has some ad inventory in these environments, and let's 0:15:41.280 --> 0:15:44.480 put aside of the measurement issues. Let's put aside whether 0:15:44.560 --> 0:15:48.280 or not you're getting unduplicated reach and all that fun stuff. Um, 0:15:48.400 --> 0:15:51.880 the reality is there's just a lot less television and 0:15:51.960 --> 0:15:58.960 based inventory, uh with which to reach consumer. We'll be 0:15:58.960 --> 0:16:01.960 back in just a little bit with more with Brian Weser. 0:16:10.760 --> 0:16:13.040 Welcome back to Strictly Business, where I'm talking with Brian 0:16:13.120 --> 0:16:15.800 Weezer or group and about the state of the advertising 0:16:15.840 --> 0:16:19.280 business in the thick of the upfront season. Brian, I 0:16:19.320 --> 0:16:21.800 hear what you're saying about all these alternatives, but there's 0:16:21.840 --> 0:16:29.280 also to be and Pluto TV and Peacock streaming inventory 0:16:29.320 --> 0:16:33.480 that you know, the traditional TV companies are making available. 0:16:33.560 --> 0:16:37.400 So that doesn't solve all their problems. No, because I 0:16:37.400 --> 0:16:40.880 mean that's included in the numbers of sting. Oh that's 0:16:40.920 --> 0:16:46.720 my boy, got it? And what about the I'm just 0:16:46.760 --> 0:16:49.240 curious what you think about the so called free acid 0:16:49.520 --> 0:16:54.240 free ad supported streaming options like to be in Pluto TV. 0:16:54.440 --> 0:16:58.680 Do you see these as as being viable, you know, 0:16:59.280 --> 0:17:01.840 to define five years in the future, this is gonna 0:17:01.840 --> 0:17:05.560 be a permanent part of the landscape in general. Yes, 0:17:05.880 --> 0:17:09.359 I I think that the way I think about viability 0:17:09.480 --> 0:17:13.159 from a consumer perspective is spending on content. There should 0:17:13.160 --> 0:17:16.880 be a rough relationship between share and spend on content 0:17:17.560 --> 0:17:20.200 and share of viewing and again just dealstrate to take 0:17:20.240 --> 0:17:23.639 Netflix right, I can roughly estimate, depending on how you 0:17:23.680 --> 0:17:26.960 want to make assumptions about what the right connations between 0:17:26.960 --> 0:17:30.800 cash accounting expenses. If Netflix was some number like five 0:17:30.840 --> 0:17:35.560 billion dollars on programming in a country where by my 0:17:35.680 --> 0:17:38.560 estminsters around seventy billion dollars of spending on programming for 0:17:38.640 --> 0:17:44.119 the US, that's about seven right, Well, what's their total 0:17:44.160 --> 0:17:48.800 share of viewing? It's about seven percent. If you spend 0:17:49.320 --> 0:17:53.000 if you show up today with let's say one point 0:17:53.040 --> 0:17:56.520 four billion dollars of a TV budget of the budget 0:17:56.560 --> 0:18:00.440 for programming, I would bet you probably will get to 0:18:00.440 --> 0:18:04.320 to percent audience. Sure all those people. Now, if you're 0:18:04.320 --> 0:18:06.359 really good, you can find ways to do it cheaply 0:18:06.400 --> 0:18:09.000 and get a lot of audience. But on average you 0:18:09.080 --> 0:18:12.560 need to spend up to get the viewing. It's not 0:18:12.760 --> 0:18:15.640 I don't think it's that hard hard to understand. Why. 0:18:15.680 --> 0:18:20.080 It's a spaghetti theory of programming. Right, you throw it 0:18:20.200 --> 0:18:22.800 up against the wall, something sticks. On average, you know 0:18:22.880 --> 0:18:27.439 that some percentage will. So if you're whether you're Pluto 0:18:27.760 --> 0:18:30.040 or to be oring these others don't. Hey, they may 0:18:30.119 --> 0:18:34.880 end up being very efficient forms of getting the viewership. UM. 0:18:34.920 --> 0:18:39.760 That remains to be seen. They are going to spend 0:18:39.760 --> 0:18:43.200 more on original programming, and certainly we've heard um. You know, 0:18:43.359 --> 0:18:46.439 Fox really talked about that the other day their next call, UM. 0:18:46.440 --> 0:18:48.400 And I think we'll see that more often from the 0:18:48.520 --> 0:18:53.040 pure a body aggregators UM that don't today have a 0:18:53.080 --> 0:18:56.760 lot of original but in general, the viewing share will 0:18:56.800 --> 0:18:59.479 go to where they're spending a share. I don't think 0:18:59.520 --> 0:19:03.399 that should be rocket science, can't are had estimated national 0:19:03.440 --> 0:19:07.160 TV ad spend in was down about pent of at 0:19:07.160 --> 0:19:11.520 fifty billion dollars. Uh, So what do you see for one? 0:19:11.720 --> 0:19:14.439 How big a swing could we see in terms of 0:19:14.880 --> 0:19:18.919 money moving to digital? Well, I mean, let's I mean, 0:19:18.920 --> 0:19:20.359 first of all, I guess we could say on our 0:19:20.440 --> 0:19:24.040 numbers that's not too far away from where Groogum's estimates 0:19:24.040 --> 0:19:27.679 are for two thousand twenty. You have to be mindful 0:19:27.720 --> 0:19:30.200 when you're looking at the year of your media and 0:19:30.240 --> 0:19:34.760 our ad revenue, or at spending trends. It's really important 0:19:34.760 --> 0:19:37.160 to be conscious of the role political advertising, which really 0:19:37.200 --> 0:19:39.680 distores the numbers on a year of your basis um. 0:19:39.800 --> 0:19:41.119 So you know, if you wind up with on an 0:19:41.160 --> 0:19:45.119 underlying basis, one can grow by college nine percent or something. 0:19:46.160 --> 0:19:49.240 But is that very meaningful in context of the decline 0:19:49.280 --> 0:19:51.840 that we have last year and not? Really? The right 0:19:51.840 --> 0:19:53.840 way to think about it, as as far as I'm 0:19:53.880 --> 0:19:57.320 concerned is to think about flatish kind of overall business, 0:19:57.320 --> 0:19:59.800 maybe a lightly declining one over time, and it comes 0:19:59.800 --> 0:20:04.880 back this creative destruction issue. If the kinds of companies 0:20:05.240 --> 0:20:10.199 that are predisposed towards using television are less prominent in 0:20:10.240 --> 0:20:15.199 the economy, that will lead to less spending on television. 0:20:15.440 --> 0:20:19.280 Right you see some of those advertisers, Uh, the average 0:20:19.560 --> 0:20:24.600 large brand advertiser incrementally reduces their spending on television with 0:20:24.640 --> 0:20:30.240 every passing year. That's been true forever. They get replaced 0:20:30.800 --> 0:20:34.520 in part by new marketers who show up because it's 0:20:34.560 --> 0:20:37.200 satisfies a goal better than an alternative for that new 0:20:37.200 --> 0:20:41.840 advertiser who shows up. But the combined effect is that 0:20:41.880 --> 0:20:45.360 you get a flat kind of number to slight decline 0:20:45.359 --> 0:20:48.560 in terms of the available spending that's out there. That's 0:20:48.680 --> 0:20:53.280 independent from the available inventory. Right now, this is something 0:20:53.320 --> 0:20:55.760 that a lot of people miss. There is there's no 0:20:55.880 --> 0:20:59.560 law that says a change in supply causes the change 0:20:59.560 --> 0:21:03.359 in demand at So just because audience trends go one 0:21:03.359 --> 0:21:05.520 way or the other doesn't tell you anything about demand. 0:21:06.280 --> 0:21:10.600 Those are independent To point on, you know, shifts to 0:21:10.680 --> 0:21:13.960 digital show that is happening because the nature of marketers. 0:21:14.000 --> 0:21:17.320 Businesses are adapting and evolving, and we can argue, rightly 0:21:17.400 --> 0:21:21.800 or wrongly that a marketer whose business is increasingly oriented 0:21:21.840 --> 0:21:27.560 online will increasingly allocate money to digital media, the pure 0:21:27.560 --> 0:21:31.959 play you know, digital platforms. Um that tends to happen, 0:21:32.000 --> 0:21:34.480 whether it's right or wrong. I could argue the best 0:21:34.560 --> 0:21:38.040 allocation of resources a market could make is first invest 0:21:38.119 --> 0:21:43.280 in brand, second, invest in creative, third, figure out the 0:21:43.320 --> 0:21:48.359 bed afterwards. That's not how market there's actually make decisions though. 0:21:48.880 --> 0:21:51.600 Um So, television will still have an important role for 0:21:51.680 --> 0:21:56.200 most of those marketers, but it's with every passing year 0:21:56.240 --> 0:21:58.280 there is on average there's a bit of a shift 0:21:58.320 --> 0:22:02.119 for the like for like marketing. Another way that TV 0:22:02.480 --> 0:22:05.240 is going to try to close the gap on digital 0:22:05.320 --> 0:22:08.320 is to sell Madison Avenue on its capability to target 0:22:08.440 --> 0:22:14.159 with addressable advertising. Oh what do you think of where 0:22:15.119 --> 0:22:17.960 the state of addressable advertising is right now? What are 0:22:18.000 --> 0:22:21.160 the obstacles to this, you know, becoming a bigger deal 0:22:21.200 --> 0:22:24.480 for TV? Yeah, well so I've I've been spending time 0:22:24.720 --> 0:22:29.359 understanding addressability for twenty years almost, which feels like a 0:22:29.359 --> 0:22:31.639 long time. I know there still have been out longer. 0:22:32.160 --> 0:22:35.000 Um and it it from the earliest days where I 0:22:35.000 --> 0:22:38.040 looked at this, I thought the whole trying to sell 0:22:38.400 --> 0:22:41.480 you know, running at for for dog food to dog 0:22:41.520 --> 0:22:44.719 owners sounds great in concept, but it feels like it's 0:22:44.720 --> 0:22:47.399 a pretty small market, And sure enough, I think that 0:22:47.520 --> 0:22:50.760 is a very small market, is not where the ultimate 0:22:50.760 --> 0:22:54.920 opportunity is for addressability. Where the ultimate opportunity for adjustability is, 0:22:54.960 --> 0:22:58.560 as I see it is in helping marketers accomplish what 0:22:58.600 --> 0:23:02.960 they really need, which is cost effective reach extension, meaning 0:23:03.720 --> 0:23:08.880 how do you find that of a target audience under 0:23:08.920 --> 0:23:13.959 a broad definition? Because keep in mind, if you're using television, 0:23:14.119 --> 0:23:18.840 it's probably because you want to reach everybody. How do 0:23:18.920 --> 0:23:22.280 you make sure that you're actually managing you're reaching frequency 0:23:22.359 --> 0:23:25.000 the way you intend to eight percent reach with an 0:23:25.000 --> 0:23:29.040 average of eight times frequency and making sure that only uh, 0:23:29.080 --> 0:23:32.800 nobody gets more than ten exposures and no one gets 0:23:32.880 --> 0:23:37.159 less than six, you know, balancing a load of frequency 0:23:37.320 --> 0:23:40.959 that is not commonly done or not commonly doable with 0:23:41.080 --> 0:23:47.400 television the way it works today, I think addressability offers 0:23:48.119 --> 0:23:52.040 UH an amazing opportunity to actually help markers accomplish those 0:23:52.040 --> 0:23:55.240 reaching frequency goals that they have. And sure then you 0:23:55.280 --> 0:24:00.240 can start to incorporate variability, like maybe you identify that 0:24:00.640 --> 0:24:03.920 a certain kind of profile of a consumer is more 0:24:04.040 --> 0:24:07.439 likely to respond to a certain kind of message versus another. 0:24:07.520 --> 0:24:10.320 But it's all very incremental in terms of its impact 0:24:10.320 --> 0:24:14.240 and very difficult to prove with any certainty. So I 0:24:14.240 --> 0:24:17.439 think that that's where the greatest opportunity is um for 0:24:17.440 --> 0:24:20.879 for addability in the medium, and it becomes a reallocation 0:24:20.920 --> 0:24:24.199 of reason versus not a source of new resources. But 0:24:24.440 --> 0:24:27.040 at the same time, I think there is some opportunity 0:24:27.080 --> 0:24:31.160 to help bring some marginal advertisers into the medium. It's 0:24:31.200 --> 0:24:34.199 not necessarily a large amount of money, but it's the 0:24:34.200 --> 0:24:37.600 idea that if you're a marketer, would say a five 0:24:37.640 --> 0:24:40.439 million dollar budget, you think that television would work for 0:24:40.480 --> 0:24:41.840 you if only you could use it in a very 0:24:41.840 --> 0:24:45.080 precise way. Yeah, there's some extra money to be had 0:24:45.080 --> 0:24:48.040 from that kind of a marketer, but they don't know 0:24:48.080 --> 0:24:52.760 that that's necessarily a need mover. Well, it also wouldn't 0:24:52.760 --> 0:24:55.280 be up front season if we didn't have some sort 0:24:55.280 --> 0:25:00.720 of controversy around measurement. And we're seeing the networks claiming 0:25:00.800 --> 0:25:05.479 Nielsen is under counting TV viewing during the pandemic. Uh, 0:25:05.680 --> 0:25:07.800 what what to make of this? Is just just sort 0:25:07.840 --> 0:25:11.720 of like a new variation on the same old theme 0:25:11.840 --> 0:25:15.639 of the networks, you know, working the refs so to speak, 0:25:15.800 --> 0:25:19.680 or or do they have a point? Well, I mean, 0:25:19.760 --> 0:25:23.720 there are definitely some issues that based with respect retombishment 0:25:24.200 --> 0:25:27.919 during the pandemic UM mostly pretty understandable in terms of 0:25:27.920 --> 0:25:30.840 not being able to you know, send people into homes um. 0:25:31.000 --> 0:25:34.320 But you know, you could argue the other the the 0:25:34.400 --> 0:25:37.560 numbers are distorted in lots of different ways through the pandemic. 0:25:38.160 --> 0:25:42.600 For example, because they didn't turn over the homes in 0:25:42.640 --> 0:25:46.840 the panel as frequently as they normally would have. UM, 0:25:46.880 --> 0:25:50.520 they didn't bring in new homes, which would have biased 0:25:51.440 --> 0:25:56.959