So it seems that linear TV isn’t dying and neither is streaming.
That was the key takeaway from this year’s increasingly overlapping NewFront/Upfront season, though the question of what that ultimately means was often lost in a sea of announcements around new measurement currencies and new programming.
And what it actually means is that we are now in the Hybrid Era and will be for some time to come.
“Hybrid” meaning that very few viewers will be found exclusively on streaming or linear. Rather, they will watch TV both ways. So, you’ll have heavy streaming viewers, heavy linear viewers and viewers who divide their time more or less evenly between the two.
This is confusing enough, but then throw in that those preferences are likely to change depending on the season, e.g., someone who watches a lot of live sports on linear during baseball season may shift to being a heavy streaming viewer during the fall and winter in order to catch up on all those shows they missed in favor of Dodgers’ doubleheaders.
So there’s that, and then there were the recent announcements that Netflix and Disney would be joining Discovery-HBO Max, Hulu, Paramount Plus and Peacock in offering an ad-supported tier. Throw in all the booming FAST services and you’ve suddenly got a lot more inventory on streaming, desirable inventory too, which, for many advertisers might be reason enough to reconsider how they think about streaming.
Right now, it’s often used for incremental reach, e.g., a way to hit all those viewers that brands are missing on linear, but going forward, brands may want to make streaming their primary buy.
If the industry can get out of its own way, that is.
Here are a few of the key problems facing the Hybrid Ecosystem:
Too Many Walled Gardens
Ask anyone who buys streaming TV and they’ll tell you how complicated it is to buy across all the various services, all of which seem to act as if they are the only platform the brand is buying ads on.
So some (OK, a lot) more cooperation is needed on that front in terms of measurement, verification and identity.
The Tower of Babel
While agencies give much lip service to being “video agnostic,” they still often have “TV teams” and “programmatic teams,” neither of which speaks the other’s language, and which tend to have dramatically different visions of what is acceptable.
To wit: there is a serious lack of transparency around programmatic buys on streaming -- advertisers often have no idea what shows their ads ran on, let alone when. Programmatic buyers tend to think that’s not a problem -- the brand reached the target after all, while TV buyers find that unacceptable.
There’s a sub-issue with the lack of transparency too, and that is quality, or the lack thereof. There are a wide range of programming options on many services which range in quality from recent network reruns to repurposed YouTube videos. Bigger brands want to run their ads against a certain type of programming and they are not all that interested in reaching their target on the Suzy’s Yoga Studio app, which Suzy’s sister shoots on her iPhone with a ring light. TV buyers get that, programmatic buyers often do not.
And then finally, there’s simple accounting: some brands consider CTV to be “digital video”, some consider it to be “TV” and some consider it to be its own beast. That makes figuring out budgets and who is spending what and where all the more difficult. It also frustrates the majority of programmers who just want it all to be “TV.”
Frequency Capping
Because so much CTV is bought programmatically, by different companies, across various walled gardens, in a system that discourages communication, CTV is beset by a serious overfrequency problem. The OEMs can use their own ACR data to solve this for ads running on their own devices (they can track which ads have been seen on linear and streaming) but there’s still no easy way to do it across devices and across streaming platforms.
Different Buyers, Different Needs
In many ways, this problem gets to the core of what the industry is going to need to solve over the next decade.
You have some brands that love streaming because of how much it is like digital. They can use their own first party data to target specific audiences and get back digital-style attribution metrics that they can then tie back to campaigns on mobile, social and digital. It’s all very familiar to them and it’s designed to actually move specific products in a way that is easy to measure.
On the other side though, there are brands who see TV as a reach vehicle. They don’t mind at all if people outside their target see their ad—if anything they’d like those people to reflect favorably on their friends’ purchases. And their ads are not designed to actually sell anything—not in the moment, anyway.
They are, rather, image and awareness ads (think Nike’s “Just Do It” campaigns) whose purpose is to get the viewer to think good thoughts about the brand so that next time they need to buy something in that category they’ll put them in their consideration set. That’s not something that’s easily measured and so digital style metrics hold little appeal.
And yet these two diametrically opposed ways of looking at TV advertising are both going to have a role to play in the new Hybrid Ecosystem.
How the industry manages to solve all of the issues listed above while keeping programmers and advertisers happy will play a huge role in determining whether brands increase their TV ad budgets in the years to come.
It won’t be easy, but the Hybrid Era is likely to remain a reality for many years to come.
