We’re approaching the end of an odd-numbered year and, of course, entering the beginning of an even-numbered one. And we know what that means: another potential political-ad windfall for linear television companies.
But I’m not here to tout the opportunities for political ad dollars; I already addressed that in October. If you have not already read that October column, I’ll save you some time with a spoiler alert: I’m predicting another record for Midterm ad spending on linear TV. And I’m not alone in that regard.
Instead, I want to discuss an undeniable component of the projected growth in political spending - advancements in audience targeting and addressability.
There is a reason forecasters see connected TVs’ share of the political ad pie growing at a far faster clip than that of other platforms; its inherent characteristics enable a very direct, yes, connection with the viewer. But local linear programmers and distributors are finding a more prominent seat at the table with political campaigns and their buying shops when they offer an addressability component to accompany their admittedly unrivaled mass local-audience reach and power.
For broadcast TV outlets, local news programming continues to be a powerful recipient of political dollars. For MVPDs, spending can be directed at insertions during cable network news programming -- to reach politically engaged news viewers -- but we’ve seen heavy spending directed at, for example, HGTV, to reach women voters.
But sports programming has always been at or at least near the top of the list of political-ad environments and its share is growing. And viewers largely continue to look to linearTV providers - led by ESPN and by local broadcast network-owned or affiliated TV stations - for those big-ticket sporting events. Today, they are literally unique in their ability to draw audiences across demographics in a fashion enabling both mass reach and, for those applying the technology, opportunistic targeting.
Political dollars’ disproportionately growing share of the total ad pie has rendered local linear television advertising a cyclical business. In even-numbered years, the sector’s ad revenue typically grows by at least a high-single-digit, if not double-digit percentage. But in odd-numbered years it goes right back down.
Some in the investment and lending communities might view this type of cyclicality as a touch of kryptonite. I believe this would be somewhat myopic. Political ad dollars may come and go with each cycle, but they constitute real money - money that TV station and MVPD owners can reinvest in their businesses … including, valuably, in emerging technologies that can keep them at the advertiser’s table not only during but in between political cycles.
What do I mean by “technologies”?
To the uninitiated, “television” and “digital” may be separate animals. They’re not; they haven’t been for years. And they’re cross-pollinating at an increasingly rapid rate.
Yes, local broadcast and cable TV are in the linear business -- but it's transitioning, and we're in the middle of that transition period.
In fact, the linear TV inventory provider today can even be regarded similarly to the digital inventory provider - namely, as the publisher. Like a digital-first publisher, the linear inventory provider in essence owns the rights to the content which the consumer is (hopefully) ready to embrace.
And the publisher can do anything they want with those media rights. They can sell it direct. They can sell it through brokerages. They can sell it through a rep firm. They can sell it through programmatic.
And for legacy linear TV inventory providers, that opens up myriad new and incremental revenue opportunities. They can turn their premium inventory into addressable programmatic inventory. Forward-thinking local TV broadcasters seized on this evolving concept years ago and successfully effected a transition from legacy ratings-based selling to a more comprehensive impressions-based selling framework. Today’s addressability technology enables them to capitalize on this transition ever more effectively.
Viamedia’s sales teams have been moving swiftly to capitalize on the tectonic shifts in audience consumption and measurement on behalf of our 100-plus cable operator clients around the country who are embracing the newer options for selling premium local linear inventory. As these operators migrate to addressable, they -- and by extension, we -- become the publisher.
The objective in an addressable world, of course, is to put more demand on inventory. This could put more pressure on salespeople to raise rates. And that's a good problem.
So, as sellers, we have to look clearly and objectively at who's buying media today and where the audience is -- and where it will be in the future. The world's changing in the way that we access and consume media, and, actually, now how we have to sell media.
In short, we have to sell media to thousands more - and newer -- buyers in a very different way. It’s a daunting challenge and I doubt many executives at each end -- and every step along the way -- of the advertising and media equation are not in the same boat with us. We're all trying to figure it out.
Our recent acquisition of LocalFactor, and the digital-targeting DNA that drove their rapid success, as well as our subsequent rebrand as Viamedia.ai were, for us, transformative. We viewed these as critical steps toward getting us to where we need to go.
It’s a new world in which marketers will expect targeted - or addressable - solutions in tandem with mass reach. And we’re focused on helping clients prepare for and embrace it.
Posted at MediaVillage through the Thought Leadership self-publishing platform.
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.