Jack Myers and Michael Nathanson Read the Media Tea Leaves

As difficult as it is to predict media industry trends in normal times, it is especially difficult to predict them now during a pandemic. What can we expect to happen financially in the 4Q when the virus may or may not be under control? How long will it take the media marketplace to rebound? To read Jeff Minsky's commentary on Jack Myers' update and forecast, link here.

That is why sitting down with two financial experts like Michael Nathanson, Senior Research Analyst at MoffettNathanson and Jack Myers, Founder of MediaVillage, helps to put the future of media spend into a manageable perspective. This MediaVillage Leadership Conversation took place last week where they delved into their previous forecasts earlier this year and revised their predictions with the most up to date data. (View the full video Leadership Conversation on-demand here.)

A Look Back At Past Forecasts

While Nathanson was surprised at the market upside and noted that the data points were better than he expected since his predictions in April, Myers was less sanguine. “The caveat being,” Myers stated, “that we were anticipating a shorter term downturn with maybe less of a long tail.” But maybe, he averred, the long tail is longer than we expected.

Back in April, Myers had taken, “a more contrary point of view to most of the consensus regarding the economy, based on a more pessimistic view of how the government and nation would respond.” His more pessimistic forecasts have, unfortunately, proved prescient. Consumer confidence which drives the economy needs reassurance that a vaccine is imminent but the path to a vaccine is a long one with the best case, according to Myers, occurring in the second quarter of 2021. “So any recovery between now and then would be dependent on actions like this and a more aggressive use of masks and social distancing- things that have not been happening successfully around the country,” he explained.

The Unclear Future of Sports

“Sports seem to be such a pivotal issue for the industry,” noted Myers. Is it possible for sports to return in the third or fourth quarter of this year? For Nathanson, sports may start but it is unclear whether it may finish the season. For Myers, the challenge in predicting spend is that, “Sports advertising budgets are based on the need for flexibility and cancellation options and not reallocating budgets to other dayparts that are non-sports. Those are big concerns for the networks.”  Myers is, “Seventy percent sure that sports are unlikely to happen. I agree that it will start. I am not sure where the leagues will wind up.”

After to speaking with educators across the country, Myers is also sure that colleges will reopen in the fall but, “as of Thanksgiving they are anticipating and planning for a shutdown.”  So the start and stop schedule for college, in addition to the unpredictability of pro sports, does not bode well for the remainder of 2020. “There are so many uncertainties and the risks are so high  that we are more likely to see delays into the second and third quarter of next year before we see any meaningful return to sports and until there is a vaccine. And I projected that we would not see an Olympics until 2022 which has a major impact across the ecosystem. I am still holding on that,” he concluded. Because sports programming covers the range of media from national to regional to local and across all media, the revenue impact of a lost season for sports programming is especially worrisome.

Ad Spend Performance Going Forward

In reviewing his forecasts from earlier this year, Myers reiterated that his forecasts, “have certain assumptions and predictions that are not consensus views around sports.” Referring to his chart mapping the economic impact of the 1919 pandemic, Myers noted that the same tactics that we are experiencing today from the lack of Federal action to a reliance on the states to manage the outbreaks,  resulted in a four year long recovery into the Roaring Twenties. Of course medicine today is more advanced and the hope for a vaccine in two years is not unreasonable today. But Myers sees a, “two years downturn in the economy. I believe we are going to see increasing negativity coming.”

Myers compared a best case and worst case scenario in July to his original forecasts in January which were generally positive. Looking at July, market prognosticators appear to be more optimistic than Myers who noted that, “The consensus view seems to be in the low (negative) teens in terms of the overall advertising, in the mid-teens  for the legacy linear advertising and flat to negative … or even the plus side for some forecasters for digital.” But Myers himself believes that best case, Total Advertising will be off -14.3%, Legacy -20.8% and Digital (which does not include Facebook) -7% while worst case is -20%, -29% and -9.3% respectively.

Examining individual media sectors such as Cable, Broadcast, Local, Print and Audio, best case worst case, “we are continuing to see downturns, anticipating minimal sports revenue. I’m anticipating a 20-30% of what some other forecasters are anticipating in terms of sports revenues. That is a primary reason for my more negative best case scenario.” Some digital sectors can expect upsides such as Search Marketing, Online Originated Video, Video Game advertising, “Overall,” Myers said, “continuing a downturn in the Digital media economy with strength around Interactive OTT and Addressable.”

And Yet, Some Bright Spots

There is a bright spot in the area of content creation. Myers noted that the logjam between Writers Guild and top agents seems to be breaking down, “which is good news,” for the industry, enabling fresh material for content-starved viewers. And reality shows, game shows and even movies are in production. “In Hollywood they have begun casting couples and roommates. So they are beginning to cast people who are social distancing with each other and finding a path towards original production,” he explained, which could help with ratings performance.

Not Facing Reality Bites

"In times like these, plans are useless but planning is essential," noted Myers, referring to a quote by Winston Churchill. “We need to plan with best case and worst case scenarios,” he stated. “The message that I communicate is - be prepared for the downturn in the economy. Be prepared for some of the realities. As we look at the upfront, the scatter markets and some of the realities across the media ecosystem and agencies, I’m feeling a sense of complacency. A sense of ‘it’s not as bad as we anticipated or feared so let’s move forward business as usual.’ That, frankly, scares me - move forward business-as-usual and not preparing our businesses for the potential downturns,” he concluded.

This article first appeared in www.MediaVillage.com

Finding Direction in the Future Fog. Jack Myers’ Upcoming Leadership Conversation with Michael Nathanson of MoffettNathanson.

It’s a time of unease and uncertainty especially for those of us in the industry charged with forecasting the media marketplace. What seemed correct in April had to be reassessed in June and now, in July, the landscape continues to change. So I don’t envy Michael Nathanson, Senior Research Analyst at MoffettNathanson, who is charged with offering the media industry guidance in marketplace shifts and financial implications. 

Nathanson will sit down with MediaVillage Founder Jack Myers for a Leadership Conversation looking back at what he predicted in April and looking ahead to see how the certainties in April are playing out in July and into the fourth quarter.

Among the topics to be covered include:

What About Sports? The programming area with the greatest level of uncertainty has to be sports which are not only effectively on hold this summer, but is also to-be-decided as to the fall schedule. How do teams prepare for their possible opening seasons without time to practice? How will the lack of sports impact advertising revenue, network contracts, network performance and fans? The unknowns make it difficult to forecast.

What About the Upfront? What can we expect from the upcoming uprfront season now that viewing patterns are trending to more digital and streaming services, many ad-free? Will dollars come back into the marketplace and is anyone ready to buy that far in advance into 2021? One thing is clear; the very foundations of certain business sectors are expected to be dramatically impacted. But by how much and for how long?

What About the Stock Market? The uncertainties of the media marketplace are translating into uncertainties in the stock market. Are there two tiers of equities – the frothy high performers who seem to defy gravity and the rest of the pack struggling to survive?  MoffettNathanson is known for its market predictions. What are they forecasting for the next two quarters … and beyond?

What About Workplace Dynamics? With the general overall success of the remote workplace coupled with the continued hesitancy of people to return to their offices, there may (or may not) be a movement to greater WFH opportunities. How can companies plan for the potential shift? Will they find safe ways to bring workers back to their offices? How does all of this impact future office space leasing?

What About Employee Motivation? Social isolation, lack of outside stimuli and possible concerns about future finances all figure into employee psyches. How can companies keep their people motivated, enthusiastic and hopeful about the future of their company?

What About Planning for the Future? Arguably the biggest issue in this discussion will be the impact of the pandemic on consumer confidence – from spending to attending - and on overall business optimism – from revenue to employees.  What about second and third waves and opening up and shutting back down? The world is in flux but internal as well as external business decisions still need to be made.  How can we best plan and even more important, how to grow?

William Shakespeare wrote, "What's past is prologue" but is that really true anymore? Can we really use the past to predict the future this time? Tune in and find out.

This article first appeared in www.MediaVillage.com

Getting Deep into Sports Data-Driven Advertising Opportunities with Xandr and WarnerMedia

For some, according to consultant Mike Shields, when you think of sports advertising it’s generally, “big brands doing tent pole sponsorships. Sports doesn’t scream data technology and programmatic.” But for others, data-driven Moneyball for teams and athletes has made the jump to data-driven addressable advertising in sports programming. At the recent TV of Tomorrow conference, Shields sat down with Laurie Shackell, Vice President of Sports Advanced Advertising, WarnerMedia, and Brian Cordes, Vice President Head of Strategic Partnerships, Xandr to discuss the use of data in the sports programming arena.

Changes in the Sports Marketplace

Generally speaking, at least for marquee events, the sports advertising business hasn’t changed much in the past few years. Shackell offered that, “most of the clients we talk to in the sports landscape don’t want to give up national GRPs which are very precious,” especially for big events like the SuperBowl, All Star Game or NCAA Tournament. “And we are not suggesting changing that.” She also noted that overall consumption of sports programming has continued to grow across all of the different platforms. So within this rich and growing market, the recent merger of Time Warner with AT&T’s WarnerMedia and Xander, perfectly positioned to capture the full value of sports across platforms and all of the buying mechanisms for both national and local campaigns.  

New Forms of Advertising

Sports programming usage by fans is increasingly fragmenting, while becoming even more engaging, if that is possible. Shields noted that, “Bite sized consumption and social media are such a huge part of it [sports programming] now. I imagine that it is more complicated,” in creating media campaigns. But Shackell sees added opportunity rather than complication. “The Bleacher Report always says that the moment is born on TV but … now we can take those moments whether its online or even onsite at a fan fest,” and add the excitement and engagement of those moments to a measureable campaign.

One-to-one targeting is, “another distribution point,” explained Cordes, where Xandr is able to pinpoint a specific athlete’s fan and match messaging to purchasing behavior via addressable on TV or cross screen addressable programmatic. “So it’s by extending that distribution point across a more amplified sponsorship role,” he added.

Finding the Right Creative

“One of the questions we get in addressable TV all of the time is, ‘okay I get it, I want to use the targeting and I want the efficiency it brings but what content do I use?’ and 95% of what we see is people using traditional TV spots, the same spot they use in national linear and bringing it to addressable,” explained Cordes, to add frequency to those households most likely to convert. “But advertisers will always yearn for better and more relevant content and it was always so expensive to make another 30 second spot. So the idea is to take the content that is already being built and leverage these other distribution points, like addressable TV, along with what they are already purchasing from a sports perspective. It’s where we see a big potential for the future.”

Between the ability to leverage multiple platforms and adaptable creative for both national and local campaigns, today’s sports advertising marketplace is flexible, effective and growing. “We’ve also stumbled upon a new idea,” added Cordes, “around frequency management and impression distribution,” where it is possible to reach all potential populations for a brand via addressable from heavy to very light viewers of TV, overcoming some of the challenges of linear. That, and enabling direct-to-consumer advertisers to enter the TV space, indicates growth potential across all verticals and types of advertisers. 

This article first appeared in www.MediaVillage.com

A Holistic Blend of 4 Nielsen Data Sets Delivers Unique Fan Insights

Sports fans are among the most ardent of loyalists. Brands that can tap into that devotion have a greater likelihood of winning over and retaining these advocates. A sure way to achieve this is by gaining a deeper understanding of sports fans. Recognizing that opportunity, Nielsen combined several of its data sources to produce a new product for in-depth, fan-related insights.

Nielsen Sports has just announced the launch of a platform called Nielsen Fan Insights to provide, as the press release noted, "sports properties, sponsor brands, and event organizers with a comprehensive view of fans' interests, media consumption behaviors, brand attitudes, and purchasing habits from around the world." The service allows Nielsen's customers to go directly into a dashboard to mine data for insights into the many aspects of fandom.

Nielsen Fan Insights combines four separate sets of data — each of which offers unique viewpoints of sports fan — into one useful tool:

1. Nielsen Homescan household panel, which continually tracks purchases across consumer segments
2. Nielsen Scarborough, which asks people a range of media consumption, purchasing, and attitudes for 210 markets on the U.S. local level
3. Nielsen Winning Brands, which measures a brand's awareness, consideration, and attitude before, during, and after an ad or sponsorship exposure
4. Nielsen Global Fan Survey, which is a new monthly global tracking survey of sports fans that will eventually cover over 30 countries

A brand can use the data to drill down to the fans of a particular league or even a team to better understand their demographic and attitudinal profiles, purchase preferences, and brand awareness. Additionally, global brands can use the data to get insight into the differences from country to country and across different age groups. So, a credit card company sponsoring a tennis event, for instance, can look at a before-and-after activation of a campaign to assess whether it helped to achieve their brand's KPIs — from awareness, to brand affection, to transactions — among tennis fans.

For sports teams and leagues that are trying to sell sponsorships, the platform enables them to target prospective advertisers, as well as show proof of performance after a campaign. It is also valuable for league expansion efforts, discovering global advertiser interest and new fan bases, and ascertaining overall fan interest by country. The NBA, for example, could view fan interest in the U.S, and also review fan interest in China after the exhibition and pre-season games held there.

In crafting new ways to build a fan base, teams can use the insights on fan interests to improve the audience experience. For example, a team that learns that its fan base enjoys a certain type of music could book an appropriate band for a halftime or post-game show to draw in viewers.

Currently, the platform covers China, France, Germany, India, Italy, Japan, Spain, the U.S., and the UK. Brazil, Russia, and South Korea will come online at the end of 2019, along with an additional 20-plus countries in 2020. Future efforts will also include linking other datasets to specific athletes, for example. Nielsen's Thought Leadership division will release further insights in the coming months.

This is the first time Nielsen has stitched together different systems for sports. With the variety of Nielsen datasets available, the potential for a range of combinations for networks, advertisers, and genres, appears tantalizingly large and flexible

This article first appeared in www.MediaVillage.com