Marc Krigsman has a deep
background in TV from Fox Cable Network to Turner Networks Group, Cadent and
Cross MediaWorks to becoming CEO of SQAD in 2015.
“I have seen and been
involved with many significant changes and advancements in television
advertising,” he explained. So who better to assess the strength,
opportunities, trends and challenges in pricing the media marketplace in 2020?
Charlene Weisler: What data does SQAD
collect and what do you report?
Marc Krigsman: For
more than four decades, SQAD has served as the industry source for ad cost
data, processing more than $1 trillion in real transaction ad costs from
advertising housekeeping system. This data is available through our MediaCosts
platform and includes costs for national broadcast, cable, and syndicated
television, as well as local broadcast, cable, and Hispanic TV, radio, and
out-of-home advertising. We also provide audience analytics research tools for
Nielsen data through our MediaLogic platform and provide advertisers and
agencies with the industry’s leading media planning software, MediaTools.
Weisler: How has audience
fragmentation due to streaming, OTT, SVOD and cord-cutting impacted average
unit ad costs on broadcast and cable if at all? Where do you see the trend?
Krigsman: It’s an interesting
conundrum that we are in right now because as fragmentation occurs and
audiences become more scattered there is still a revenue target outlets need to
achieve for their inventory. So what is actually occurring is a CPM increase.
That is because it is costing more to reach the same audience. As fragmentation
happens, we’re seeing CPMs and rates go up. Most in the industry thought
that would not be the case, but in fact we are seeing an increase in prices.
That also happens when you sell less inventory - CPMs go up. It’s a supply and
demand issue. Fragmentation does not equate to a sale or reduction in prices.
It is actually the opposite.
Weisler: What will the effect of
increased audience based buying and impression based measurement be on unit ad
costs and on advertising budgets?
Krigsman: The more focused and
targeted you get, the more you are going to pay for that targeting. For some
advertisers that makes sense. They will pay a premium to reach the audience
they want to reach and only that audience. But other advertisers, CPG for
example, don’t really care about pinpointing audiences. So for them addressable
is not as efficient a buy.
The reality is that even with
targeting you are still going to have waste. You have to be 100 percent clear
about who the audience is you want to reach. You have to have a lot of
audiences in your data to understand who your ideal customer is but when you do
that the extras it takes to buy those segments will result in a higher price
point.
For the seller, an advertiser using a
targeted campaign to reach a limited HH, that means that they will have to fill
their other inventory with other types of advertising if they can. The media
outlet has to have confidence that the revenue they are getting from the
targeted buy will be enough. They have to take into consideration that if it
goes for a lower price, this will open an opportunity for bargain hunters looking
for a bucket of impressions, not specific ones. Targeted buying could create
opportunities for people who are looking for the opposite.
Weisler: What are the programming
types that continue to command the highest CPMs?
Krigsman: Live shows, special events,
news and sports – these are premier events that always command high CPMs
because of their unique selling proposition in general. Overall you still have
huge prices for traditional TV– sitcoms and other first run programming. But
clearly live and special events are unique.
Weisler: How are live programs such as
sports and awards shows faring in an environment where audiences are
gravitating to watching highlights on-line? Does the data support this
assumption? Press seems to infer that live programming delivers the most
engaged audiences. Do you agree?
Krigsman: Programming that promote
itself as unique or “watch it now” has the specialness of motivating viewers to
want to watch it while it is happening, which always makes for an engaged
audience.
Weisler: What can we expect for the
CPMs of news programming as the presidential campaign season heats up? And how
will data be best used to target independent voters? How is the tight inventory
in local markets due to campaign buying impacting CPMs for advertisers?
Krigsman: History has shown that when
there is a lot of pressure on inventory prices go up. From a national
inventory perspective there will be a lot of pressure from PACs and other
entities looking to support various issues and candidates. But most
presidential advertising will be local rather than national. This will put
pressure on local inventory and we will see an increase in those markets, but
for only for a period of time, What traditionally happens is that those markets
will go through to a period of time and some of their core advertisers
may not have available to them what they have had before. But those local
stations will then look to make goods following this period to offer to their
bread and butter advertisers.
Weisler: How would you rate the TV ad
market overall as we head into 2020?
Krigsman: The market is pretty
healthy. We are seeing a lot of increased pressure from other platforms
but overall the ad market is healthy. People have a high level of confidence in
the economy and when they do marketers spend against that confidence…that will
reflect well in the ad market moving forward.
This article first appeared in Mediapost.com
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