The published on tv is stolen by way of ad-supported streaming

Signage for AT&T Inc.’s WarnerMedia HBO Max streaming service will be displayed on a smartphone in an arranged photo taken in the Brooklyn neighborhood of New York on Thursday, May 28, 2020.

Gabby Jones | Bloomberg | Getty Images

During its annual pre-launch this week to advertisers, Fox ran a fake pharmaceutical ad for what has been known as “Adbyva”: a product to alleviate the problems of ad buyers who see so many viewers on ad-free platforms.

“Does the thought of another ad-free streamer behind a paywall give you the Willies? You laugh hysterically because you do [gross rating point] Goals seem completely unattainable? “The ad began.” If so, you probably have Max Plus Syndrome, a disease that plagues many ad buyers today. ”

With so many eyeballs moving into streaming, networks want advertisers to flock to their ad-supported streaming offerings. That feeling was particularly evident in this year’s television presentations, which usher in a season in which advertisers typically spend a large part of their annual television spend on deals.

Comcast’s NBCUniversal, Fox, Discovery, Disney, WarnerMedia and ViacomCBS gave advertisers digital presentations this week, placing great emphasis on ad-supported offerings such as Peacock, Hulu and HBO Max with Ads. (Outside of the presentations, the real focus earlier this week was on the news that AT&T would combine its content unit WarnerMedia with Discovery in a $ 43 billion deal, briefly mentioned in the opening remarks but largely out of the Preliminary remarks of the company was taken out recorded presentations).

Ads in streaming

Although streaming has historically been dominated by ad-free paid subscription platforms like Netflix, ad-supported services are becoming increasingly important, according to eMarketer. In January 2021, 34% of US households with video streaming functionality were using ad-supported streaming services, an increase of 6 percentage points compared to January 2020, according to Nielsen data. This applies to both ad-supported on-demand video platforms and linear streaming.

“Cable networks are increasingly promoting their streaming offers to reach viewers outside the pay-TV package,” Wells Fargo analysts wrote in a note earlier this week. “Tubi was the focus of attention at Fox’s Upfront presentation, with the company repeatedly pointing out that unlike some of its competitors, its AVOD offering is free. Much like Fox, NBCU has put Peacock in the spotlight.”

However, broadcasters are cautious when it comes to turning consumers off with repetitive ads and long commercial breaks. Because of this, they are looking for ways to change what a consumer thinks is the typical TV commercial break.

For example, during its presentation, WarnerMedia promoted its upcoming ad-supported service that promises light ad loads and less invasive ad types. Executives said the platform will use “pause ads,” a type of ad already used on platforms like Peacock and Hulu, and “branded discovery,” a way for advertisers to run ads in places where consumers choose what to watch want.

According to a report released Friday by eMarketer for Insider Intelligence, upfront digital video ad spend is projected to hit $ 6.88 billion in 2021, up 42.5% year over year. It is also estimated that advertisers will spend $ 19.9 billion upfront, near the pre-pandemic highs.

Given the proliferation of streaming options, where even ad-supported options incur relatively high fees (HBO Max with Ads, which launches in June, costs $ 9.99, compared to the ad-free price of $ 14.99 per Month), it is unclear how many services consumers will use.

“This is going to be an absolutely fascinating study of consumer behavior for the next several years,” said Jim Nail, principal B2C marketing analyst for Forrester. “I think in the eyes of the consumer it is as if I have to accept advertisements, they should basically be free. If I pay something, I should not have to accept advertisements. But that too is the rational analysis, that doesn’t. ” It doesn’t necessarily have to reflect the reality of what they’re going to do. ”

Another kind of pre-season

The pandemic derailed the typical advance process last year. Advertisers were looking for shorter commitments and more flexible agreements with TV companies.

It set the tone for changes in the way things have traditionally worked. During a CMO Exchange event for CNBC earlier this month, Marc Pritchard, Procter & Gamble’s Chief Brand Officer, spoke about his desired changes to the upfront process, which he publicly describes as “antiquated.”

He said the upfronts are an outdated system that is increasing prices for advertisers despite falling ratings, and his company plans to continue working more directly with broadcasters where possible.

“We can plan and create a plan based on business needs for the year instead of deciding what we’re going to do in one fell swoop,” to give the company more flexibility, he said.

Figures from iSpot.TV were quoted in the eMarketer study, according to which nearly two-thirds of the advertisers surveyed said their upfront commitments would be more flexible this year.

“It took a disaster like the pandemic to make it,” explained Nail. He previously said there had been little evidence of changes in the upfront commitments area, but television companies had no choice but to adjust last year.

“This year they feel like they are at least ready to meet advertisers halfway and not give them the extreme flexibility they gave last year, but certainly give them more flexibility than they would without that experience hadn’t had in the last year, “he said.

While the upfronts can change, they probably won’t be going anywhere anytime soon. With so much video inventory controlled by the major media players, advertisers will still have the same incentives to buy as better prices and the ability to secure certain data, said Eric Haggstrom, senior forecasting analyst at Insider Intelligence at eMarketer.

“It will still be very important to keep going, especially for these big advertisers who send hundreds of millions of dollars annually in video advertising,” he said.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

CNBC’s Michael Bloom contributed to this report.

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