In Defense of Targeting

Worth the time: Jeff Jarvis makes an interesting point of who the winners and losers would be if Facebook removed political targeting.

Who benefits from targeting on Facebook:
1) 
Upstart/challenger candidates
2) Nascent movements
3) New/small businesses

Key point: Targeted advertising delivers greater relevance at a lower cost as opposed to mass media.

Why this matters: Facebook recently clarified their political ads policy ahead of the 2020 election, and “microtargeting” will be allowed.

Flashback #1: Trump’s general election brawl to drive record advertising

Flashback #2: Political ads are tricky to define in digital era

More #1: Here’s Why Facebook Won’t Do The Obvious

More #2: Lord of the Rings, 2020 and Stuffed Oreos: Read the Andrew Bosworth Memo

Read the full post from Andrew Bosworth here.

More #3: Facebook will make political ads optional for users

‘Jeopardy! Greatest of All Time’ had better ratings than a lot of sports

Total viewers for Jeopardy! GOAT, according to Nielsen:
1) Night 1 – 14.5M
2) 
Night 2 – 14.9M
3) 
Night 3 – 15.5M
4) 
Night 4 – 13.5M

The average audience for Jeopardy! GOAT was higher than the following:
1) 2019 MLB World Series (Games 1-5)
2) 2019 NBA Finals (Games 1-4)

Deep dive: In Conversation: Alex Trebek The Jeopardy! icon on retirement, his legacy, and why knowledge matters.

Wow: Alex Trebek has not missed a single show since being diagnosed with pancreatic cancer last March.

More #1: Who’s The Greatest Of All Time? Alex Trebek, Of Course

More #2: TV Long View: Here’s Just How Big ‘Jeopardy: The Greatest of All Time’ Is So Far

More #3: For ‘Jeopardy’ fans, Ken Jennings is the greatest

NBCU’s Peacock Marks Media’s Latest Try to Connect Consumers, Commercials

Peacock is launching w/ three pricing tiers according to Variety:
1) Free – 
Ad-supported w/ limited programming
2) Premium ($5) – Ad-supported w/ access to a larger content library
3) Premium + Ad-Free ($10) – Full access to programming (600 movies + 400 TV series)

Peacock launch details according to Axios:
1) 
Xfinity customers – April 15th
2) National launch – July 15th

Ad minutes per hour, according to NBCUniversal:
1) 
Linear TV – 16-20
2) 
Digital video – 8
3) 
Peacock – 5

Quick math on the advertising model for Peacock:
1) 
Ad minutes/hour – 5
2) 
30s spots/hour – 10
3) Ad revenue/user/month – ≈ $5.20 (see below)
3) CPM $ –  $30
4) $/spot – $0.03
5) Spots/month – 173
6) The service hits the revenue target at 17 hours/viewer/month

Quote from Linda Yaccarino – Chairman of Advertising & Partnerships @ NBCUniversal:
“With Peacock, we’re giving consumers the free service they want and advertisers the reach and scale they desperately need—this is the best thing to happen to everyone’s screens in a long time…Peacock marks a doubling-down on the ad-supported ecosystem, and the next phase of NBCUniversal’s One Platform offering.”

Flashback: Comcast to Spend $2 Billion on NBCU’s Peacock Streaming Service in First Two Years

Peacock financial estimates by 2024:
1) Accounts – 30-35M
2) Monthly revenue/user – $6-$7
3) Total revenue –  $2.5B

Podcast: NBC’s Peacock enters the Streaming Wars

Video #1: Peacock Investor Day Presentation

Video #2: Peacock’s model will be great for the consumer, says Lightshed’s Greenfield

More #1: NBCUniversal’s Peacock Will Look More Like Cable Than Like Netflix

More #2: NBCUniversal’s Peacock ends phase one of the streaming era; phase two will test theory of disruptive innovation

More #3: ‘Safety net’: To prop up Peacock, NBC uses the power of its existing TV, ad sales business

Hollywood-backed Quibi thinks you’ll pay for its video bites

Key details for Quibi:
1) 
Quibi is short for “quick bites”
2) Launching April 6th
3) The target audience is 25-35-year-olds
4) $1.4B in capital raised
5) 230 employees

Key details for Quibi revenue model:
1) $5/month w/ ads; $8/month without ads
2) 1 pre-roll ad per episode (<5m video = 10s ad; 5-10m video = 15s ad)
3) 2.5m of advertising per hour
4) 20M subscribers by 2024
5) 75% of users will have ad-supported tier
6) They are seeking $15-25M upfront advertising commitments from companies such as P&G
7) $150M+ in upfront ad commitments

Quick math on Quibi advertising:
1) 20m paid users by 2024
2) 50% w/ ads
3) 15m paid users w/ ads
4) 2.5m of advertising per hour
5) $35 CPM for 15s ad
6) 10 15s spots/hour
7) $0.40 in ad revenue/hour
8) $665M revenue from advertising
9) $44.33/user/year in ad revenue
10) $3.69/user/month in ad revenue
11) 127 hours/year of viewing w/ ads/user
12) 11 hours/month of viewing w/ ads/user

Key details for Quibi content:
1) 7-10m 
per episode
2) 7K pieces of content at launch
3) 25+ episodes added daily
4) $100K/minute average development cost w/ a maximum of $6M/hour

Worth the time: Quibi is Offering Something Impressive, But Does Anyone Want It? h/t: Lucas Quagliata (a SOTS reader)

Video: Quibi streaming mobile video service raises $400 million ahead of launch

More: Quibi unveils “Turnstyle,” its flagship mobile video format

NBCUniversal Aims to Merge TV and Digital Ad Buying With New Tech

The big news: NBCUniversal announced the One Platform, which is meant to offer a single platform to buy across TV and digital.

Quote from Mark Marshall – President of Advertising Sales @ NBCUniversal:
“The idea of demo-based buying started in 1962… To say that we are still transacting TV in the same way today seems crazy.”

Key details for the One Platform:
1) 
Initial launch in 2020 w/ single measurement dashboard
2) Three years to complete
3) 300+ ad sales engineering and platform employees are working on it

TV share of video advertising according to eMarketer:
1) 
2019P – 66%
2) 
2020P – 63%
3) 
2021P – 59%
4) 
2022P – 56%
5) 
2023P – 54%

Flashback #1: Inside The Agency Turf War Over Connected TV

What happens next: TV Buyers are being rebranded as video investment teams, and digital buyers are going to school on TV metrics.

The future: The term “digital buyer” and “TV buyer” will go away, and there will just be “video buyers.” Everyone cannot be great at everything, so some buyers will be stronger in TV or digital, but the future is cross screen.

Who wins: The winners will be whichever side learns the other side’s piece first and integrates it into a holistic video offering.

Flashback #2: Understanding Campaign Audiences Across TV + Digital

Unique audience for 18-49 demo according to Nielsen:
1) TV-only – 59%
2) Cross screen – 27%
3) Digital-only – 14%

More #1: NBCUniversal’s Ryan McConville Is De-Fragmenting The Future Of TV

More #2: Let’s get back to the human at the center of TV advertising

More #3: TV Is The Metaphor For Video’s Future

Peak TV Update: Scripted Originals Top 500 in 2019, FX Says

Original scripted shows by year (% change YoY):
1) 2009 – 210
2) 2010 – 216 (↑ 3%)
3) 2011 – 266 (↑ 23%)
4) 2012 – 288 (↑ 8%)
5) 2013 – 349 (↑ 21%)
6) 2014 – 389 (↑ 11%)
7) 2015 – 422 (↑ 8%)
8) 2016 – 455 (↑ 8%)
9) 2017 – 487 (↑ 7%)
10) 2018 – 495 (↑ 2%)
11) 2019 – 532 (↑ 7%)

Original shows/movies released by Netflix in the U.S. (YoY growth):
1) 
2018 – 240
2) 
2019 – 371 (↑ 55%)

Video: What budget?  TV costs hit an all-time high.

More #1: Record number of original TV shows created in 2019

More #2: ‘It’s an Explosion’: Inside the Rising Costs of Making a Scripted TV Series

More #3: Is this the year that TV broke TV? The great fragmentation and why peak TV didn’t die

The One Where ‘Friends’ Disappears From Streaming (for Now)

The new decade brings a new streaming home for Friends as the show moves from Netflix to HBO Max.  One minor detail is that HBO Max does not launch until May!

Key details for Friends:
1) 10 
seasons (1994-2004)
2) 236 episodes
3) 29M viewers at peak (Season 2)

Average viewers by season (YoY growth):
1) 
1994–95 – 24M
2) 
1995–96 – 29M (↑ 21%)
3) 1996–97 – 25M (↓ 15%)
4) 1997–98 – 24M (↓ 4%)
5) 1998–99 – 24M (↓ 2%)
6) 1999–00 – 21M (↓ 12%)
7) 2000–01 – 20M (↓ 2%)
8) 2001–02 – 25M (↑ 21%)
9) 2002–03 – 22M (↓ 11%)
10) 2003–04 – 23M (↑ 5%)

Flashback: ‘Friends’ to Move to HBO Max, WarnerMedia’s New Streaming Service

Comparison of annual deal size between Netflix and Warner:
1) Netflix deal #1 (2014–18) –  $30M
2) Netflix deal #2 (2019) – $80M
3) HBO Max deal #1 (2020-24) – $85M

Quick math #1 for Friends and HBO Max:
1) Domestic subscriber target – 75M
2) The annual cost to license Friends – $85M
3) HBO Max would be paying $0.09 per month for each domestic subscriber to license the show.

Quick math #2 for Friends and HBO Max:
1) The annual cost to license Friends – $85M
2) # of seasons – 10
3) # of episodes – 236
4) $/season to license – $8.5M
5) $/episode to license – $360K

That is brand new information!  A reunion may be in the works, according to The Hollywood Reporter.

Video: Matt LeBlanc Looks Back at ‘Friends’ and Playing Joey For 12 Years

More #1: ‘Friends’ Turns 25: Ranking Its 25 Best Episodes

More #2: ‘Friends’ Creators Reveal Surprises, Regrets, Reactions to HBO Max Move Link (09/14/2019)

Apple Deal Returns Former HBO Boss Richard Plepler to Spotlight

Big news: Apple signed Richard Plepler’s new production company (Eden Productions) to a 5-year deal.

Key details for Richard Plepler:
1) 27 
years at HBO (1992-2017)
2) CEO since 2013
3) HBO won 160 Emmys while he was CEO

Hit shows released by HBO with Richard Plepler include:
1) 
Sex and the City
2) The Sopranos
3) Curb Your Enthusiasm
4) Game of Thrones
5) Veep

More #1: Apple bets big on Tinseltown’s top talent

More #2: Apple just put itself in position to be the next HBO

More #3: Can Apple Become the Google of Television?

FreeWheel: 2019-Q3 U.S. video marketplace report

Ad view growth, according to FreeWheel:
1) 
Video ad views (all) - ↑ 46%
2) 
Video ad views (audience targeted) – ↑ 34%

Quick math on ad load w/ premium video:
1) 
Video views – ↑ 37%
2) 
Video ad views – ↑ 46%
3) 
Video ad load – ↑ 7%

Share by format:
1) Full episodes (>5m) - 57%
2) Live – 36%
3) Clips (<5m) – 7%

YoY growth by format:
1) Live – ↑ 100%
2) Full episodes (>5m) – ↑ 25%
3) Clips (<5m) –  4%

Share by device:
1) 
CTV/OTT – 56%
2) 
Mobile – 14%
3) 
STB VOD – 15%
4) 
Desktop – 15%

YoY growth by device:
1) 
CTV/OTT – ↑ 110%
2) 
Mobile – ↑ 16%
3) STB VOD – ↑ 13%
4) 
Desktop – ↑ 7%

Average video ad pod length (YoY change):
1) 
2018-Q3 – 95s
2) 
2019-Q3 – 107s (↑ 13%)

Three predictions for video advertising in 2020

1) CTV will be the battleground for control of video advertising dollars – TV buyers are rebranding themselves as video investment teams, and digital buyers believe that CTV should fall under them.  Control of the video ad budget is up for grabs, which will be key when linear TV falls below 50% of video spend in the next 4-6 years.

2) Political will set the pace for cross screen video advertising – The 2020 political video ad market will be $5.8B accounting for ≈ 4-5%  of the entire U.S. market.  Politics has consistently led the way with regards to audience targeting, and we believe that cross screen planning/buying will be added to the mix in 2020.

3) Ad-supported streaming will emerge as a sustainable business model – The success of platforms such as Tubi, Pluto TV, and the Roku Channel will continue in 2020 along with new entrants such as NBCUniversal’s Peacock.  These platforms are popular with advertisers because they combine the reach/quality of linear TV with the targeting/measurement of digital.  Ad-supported streaming will carry a lower ad load compared to linear TV, which will lead to an overall drop in TV ad impressions.

A few other annual predictions that are worth your time:
1) 
What TV Advertising’s Top Headlines Mean For Marketers In 2020
2) Our own sports media prognosticator serves up his best predictions for 2020
3) Podcast: Axios media reporter Sara Fischer on what 2020 holds for local news, big tech and the streaming wars
4) Cynopsis: Media Tech Update: Predictions for 2020
5) The Future of Local TV Advertising in 2020

Finally, a few fun reads while you are waiting for your Uber/Lyft tonight:
1) First, the Smartphone Changed. Then, Over a Decade, It Changed Us.
2) The 25 Best Ads of 2019
3) YouTube Reveals Top 10 Most-Viewed Ads of 2019