State of the Screens #36


Welcome to the thirty-sixth edition of State of the Screens.

1. Return to New Year’s Day, Classic Rose Bowl, Boost CFP Overnights

TV ratings for the College Football Playoff semifinals were up big compared to the previous two years.

Ratings change compared to previous years:
1) 2018 vs. 2017: ↑ 26%
2) 2018 vs. 2016: ↑ 42%

The big change. Moving the games from New Year’s Eve to New Year’s Day.

The peak viewing time was between 9:00–9:15 PM EST.


Below are the 5 most-watched cable telecast of all time:
1) 2014 CFB National Championship (Oregon/Ohio State): 33.4m
2) 2014 CFB Semifinal (Ohio State/Alabama): 28.3m
3) 2014 CFB Semifinal (Florida State/Oregon): 28.2m
4) 2010 CFB National Championship (Oregon/Auburn): 27.3m
5) 2017 CFB Semifinal (Georgia/Oklahoma): 26.8m

College football has fared better than the NFL, but ratings declined during the regular season.

% change between 2016 and 2017:
1)
Fox: ↑ 23%
2) FS1: ↑ 4%
3) NBC: ↓ 3%
4) ESPN: ↓ 6%
5) CBS: ↓ 10%
6) ABC: ↓ 18%

Below are the 5 most-watched college football games during the regular season:
1) Alabama/Auburn (CBS): 13.7m
2) Georgia/Auburn (CBS): 13.5m
3) Ohio State/Wisconsin (Fox): 12.9m
4) Florida State/Alabama (ABC): 12.4m
5) Ohio State/Michigan (Fox): 10.5m

The big question. What impact will an all-SEC national championship have on ratings?

The last all-SEC national championship game (Alabama/LSU in 2012) was the lowest-rated finale over the past 16 years.

Quote from Chuck Neinas — Former Commissioner @ Big 12 Conference:
“We met the day after the game and said, ‘We need to look at a different system,’”

2. What’s Behind the Rapid Progress of Advanced Audience Targets in Linear TV

Brands are increasingly utilizing “digital” like data and targeting with traditional TV advertising.

How big is the market? A recent analysis from Credit Suisse projected that audience buying on traditional TV could be a$100B business by 2030.

That is 40% larger than the entire TV advertising business is today!

Quote from Joshua Summers — CEO @ clypd:
“There are two sides to this, and they’re exactly as you laid them out. But there’s a chasing of dollars across the border. Digital folks want to expand their ability to sell into linear, and linear folks want to expand the ability to sell into digital. Each side has the same goal: to cross that line.

Marketers want to increase the effectiveness of their buys, no matter where they’re delivered. And the way they’ve learned to do that in digital is through advanced data sets, whether it’s first-party, CRM-type lists or third-party data sets. They want to be able to leverage that.”

Flashback. Nielsen announces Comcast agreement to incorporate set-top box data for local TV audience measurement

3. Amazon Eyes Video Advertising Expansion


How aggressive will Amazon be in the video advertising space in 2018?

Crazy stat. The Fire TV stick was the #2 product on Amazon this holiday season and had double the sales compared to 2016.

Connected TV ranking by market share in the U.S.:
1) Roku — 23%
2) Chromecast — 22%
3) Amazon Fire — 21%
4) Apple TV — 13%

More:
1)
Niche Content Is Finally Going Mainstream

2) 2018 will be a pivotal year for Facebook’s video ambitions

3) Snapchat May Force Users To Watch Three Seconds Of Ads Before Skipping

4. IAB Podcast Ad Revenue Study: An Analysis of the Largest Players in the Podcasting Industry

Advertising in podcasting has grown 85% over the past year.

Podcasting advertising revenue (% change):
1) 2015: $69M
2) 2016: $119M (↑ 72%)
3) 2017: $220M (↑ 85%)


Share of ads by delivery type:
1) Host Read: 60%
2) Pre-Produced: 40%

Share of ads by objective:
1) Direct Response: 73%
2) Brand Awareness: 25%
3) Branded Content: 2%


5. And The Top Ad Categories For 2017 Are: Auto, Banks, Insurance

Auto dealers ran 12m+ radio spots last year which was 62%higher than the next closest industry (finance).


Local radio is counting on $564M (↓ 9% vs. 2014) from theupcoming mid-term elections.

Radio is expected to account for 7% of the political spend in 2018.

Flashback. BIA/Kelsey: Local Radio Ads Will Inch Up To $14.2B In 2017

Politics is expected to account for 4% of all local radio advertising in 2018.

State of the Screens #35


Welcome to the thirty-fifth edition of State of the Screens.

1. IAB: Digital Ad Revenue on Pace For $85bn in (Another) Record-Breaking Year

Digital advertising (U.S. only) is on pace to hit $85B in 2017.

Digital ad spend comparison (% growth):
1) 1H-2016: $33B
2) 1H-2017: $40B (↑ 23%)

Mobile share of digital spend continues to skyrocket:
1) 1H-2012: 7%
2) 1H-2013: 14%
3) 1H-2014: 23%
4) 1H-2015: 30%
5) 1H-2016: 47%
6) 1H-2017: 54%


76% of the 9M local businesses (7M) are now buying digital advertising.

Digital video ad spend comparison (% growth):
1) 1H-2016: $3.8B
2) 1H-2017: $5.2B (↑ 37%)


Quote from David Silverman — Partner @ PwC:
“We should no longer think of the internet as mobile vs desktop, advertisers are simply following consumers, who live their lives online — whether on a smartphone during a commute, on a desktop at work, or on a tablet for entertainment in the evening. Digital is an intrinsic part of every American’s day.”

Share of spend by ad format:
1) Search: 47%
2) Banner: 31%
3) Video: 13%
4) Other: 9%


CPMs are increasing (% growth):
1) Banner: $15 (↑ 6%)
2) Video: $24 (↑ 5%)

Mobile ad prices are projected to rise 45% between 2017 and 2018!

2. Comcast, DirecTV, Dish, Charter Set Rate Hikes for 2018

Most of the major pay-TV providers are all set to raise prices in 2018.

Average % increase in pay-TV prices YoY:
1) Charter: ↑ 6–8%
2)
DirecTV: ↑ 3–7%
3)
Dish Network: ↑ 3–7%
4) Cox: ↑ 3–6%
5) Comcast: ↑ 2–3%

More. Cable Prices Have Risen Faster Than Inflation For Each Of The Past 20 Years


Why is this happening? 872K U.S. households dropped pay-TV in Q3–2017 alone which amounts to a 3% drop in the subscriber base. The networks are also raising the price that they charge the pay-TV providers to carry their channels.

Remember broadband. The majority of profit for Pay TV providers comes from selling broadband rather than the actual pay-TV service.

Flashback:
1) Cable operators need to raise standalone broadband to $80 to offset cord cutting, analyst says

2) The Average Cable TV Bill is Set to Exceed $140 by 2020


More. Surge Pricing: How Binge-Streaming Hits Your Electric Bill

3. The Viewability Challenge: Should Advertisers Care?

The big question. How should brands evaluate the quality of their video advertising?

Current MRC standard — 50% of video ad should be in view for at least 2 consecutive seconds.

This focus on viewability raises two key questions:
1) Is it fair to apply the MRC viewable video definitions to social? 
2) Do we have the tools to accurately and fairly measure viewability?

Facebook and Nielsen partnered on a study to explore at what point video ads started to deliver value for the advertiser.

How much impact occurs in the first 2s of a video impression?
1)
38% of brand recall
2) 23% of brand awareness
3) 25% of purchase intent


Wow thats fast! Mobile views on Facebook have been found to improve brand recall in as little as 0.25s !

The bottom line. An ad can not have an impact if it is never viewed by the consumer. The question is how long does the consumer need to watch for the desired impact to occur?

Flashback. Demanding More Stringent Measurement, Some Brands Are Using Their Own Viewability Standards

HP standard — 100% of video ad must be in view for at least half of the video length (Ex: 15s of 30s ad)

New GroupM standard — 100% of video ad must be in view for it to count as a view, but with or without sound and regardless of auto-start.

HP estimates that 20–30% of digital inventory meets this standard.

More. How Brands Can Still Win Over Customers as Attention Spans Decrease on Social

The average piece of mobile content on Facebook is viewed for 1.7s compared to 2.5s on desktop.

4. Bloomberg Aims to Take on CNN With Launch of TV Service on Twitter

Bloomberg has launched the first round-the-clock streaming TV service on Twitter.

The content will be unique rather than rebroadcasted footage from Bloomberg TV.

A team of 50 in New York, London, and Hong Kong will produce the content.

Recent success for Twitter:
1) 8m people streamed one of the presidential debates
2) 830 events were live streamed in Q3–2017

Flashback. Twitter Announces 16 New Livestreaming Partners at Its First NewFronts Presentation

Ad packages on the new Bloomberg service (TicToc) will sell for between $1.5 — $3.0M.

More:
1) 2018 Will See Rise Of ‘Post-Cable’ Networks

2) CNN Is Axing Snapchat Daily News Show ‘The Update’

5. NFL ad revenue is rising amid a ratings decline


Average NFL viewership (% change):
1)
2016: 16.5M
2) 2017: 15.0M (↓ 9%)

Average NFL ad spot cost (% change):
1)
2016: $468K
2) 2017: $474K (↑ 1%)

The bottom line. It costs 11% more to reach 1 viewer in 2017 compared to 2016.

Sports rights on TV are growing rapidly even us consumers are cutting/shaving pay-TV.

The NFL is fairing better than TV in general.

% change in revenue YoY for January-November:
1) NFL: ↑ 2%
2) National TV: ↓ 3%

% change in NFL ad spend by vertical:
1) Insurance: ↑ 41%
2) Alcohol: ↑ 23%
3) Quick Service Restaurants: ↑ 11%
4) Consumer Electronics: ↑ 4%
5) Automotive: ↓ 4%
6) Financial Services: ↓ 6%
7) Telecommunications: ↓ 8%

Estimated sports league revenue from TV rights:
1) 2017: $19B
2) 2012: $23B (↑ 21%)

% change YoY in cable news ad spot cost:
1)
MSNBC: ↑ 23%
2) CNN: ↑ 7%
3) Fox News: ↑ 6%


6. Cord-Cutters Unite: 82 Percent Of Sports Fans Willing To Ditch Pay TV

h/t: @bryanwatkins

The good news. Sports fans are more likely to have pay-TV.

The bad news. 82% would cut/shave their pay-TV package if it was no longer required to watch live sports.


$23 is the average that sports fans would pay for a separate service that allowed them to watch live sports.

75% of consumers said that they “can’t handle” using more than 4 services in addition to pay-TV.

State of the Screens #31


Welcome to the thirty-first edition of State of the Screens.

1. NBC: Inconsistent Measurement (And Bad Ads) Are Holding The Industry Back

Is the current ad model sustainable? This is the question that industry leaders recently wrestled with.

Quote from Linda Yaccarino — Chairman of Advertising @ NBCUniversal.
“NBC is committing to making television smarter, … That means improving the consumer experience, weaning ourselves off of a single currency metric, becoming more focused on meeting real business objectives. Who knows, [maybe] even reducing [our] commercial load across [the] board.”

The challenges:
1) Consumers dislike intrusive/irrelevant ads
2) Marketers are frustrated with measurement that is not based on ROI

Quote from Bob Rupczynski — CVP, Global Advertising @ McDonald’s.
“There are occasions where we’re willing to pay more for a message targeted to a consumer’s needs, … We will never walk away from building the McDonald’s brand, but the more targeted and efficient we can get, the more we can drive an outcome for a specific subset of a segment.”

More. Pivot from Video

Quote from M.G. Siegler — General Partner @ Google Ventures. 
“But again, it’s hard to see how all of that translates to the Netflix era of television, let alone online. Because I don’t believe it does. In our ever-more-busy lives, we simply don’t have time to sit through minutes of content in hours of time to accommodate advertising. Yes, traditionally the advertising has paid for that content (and as such, our time), but the world is changing. Advertisers might be able to buy our “live” time, but our “non-live” time is increasingly not for sale. There’s simply too much else to do. “

More. How Cable Companies Learned to Love Netflix (or Hulu) and Chill

2. The Surprising Impact of Buying Attention Vs. Audiences

Last week we wrote about second-by-second viewership analysis using ACR data. This week we are going to look at second-by-second analysis for attention using eye-trackingsoftware.

How does eye-tracking measurement work? TVision installs sensors on panelists’ TVs, tracking eye movements of multiple people in a room.

Engagement by age group:
1) All ages: 100
2) 65+: 114
3) < 18: 90

Engagement by gender:
1) Male: 101
2) Female: 99


Below is an example of a Yoplait Go-Gurt ad.


Below is an example of the best time to reach moms.


The big question. How soon will we be buying ads based on the amount of time targeted consumers spend with our content rather than mass reach?

More. Attention: The Gorilla In The Room

3. T-Mobile finds success with six-second ads

% of TV ads 30s or longer by year:
1) 2014: 67%
2) 2015: 65%
3) 2016: 56%
4) 2017: 54%


More. Discover Financial Airs Its First Six-Second Spot


4. Media Use: Smartphones Up, TV Down — With TV Viewers Growing More Selective

% change over past 5 years:
1) Individual show ratings: ↓ 25%
2) TV viewing/person: ↓ 15%

The most interesting finding was that viewers were watching fewer total networks even as their choices expanded.

If everyone is watching fewer networks, then shouldn’t it be easier to reach them with advertising? Yes, but they are watching different networks which requires buying more networks to reach the same number of viewers.

The number of viewers who watch 1–2 networks per day has doubled.

% of viewers reached through one primetime spot on each of the big 3 networks:
1) 35 years ago: ≈ 100%
2)
Today: 5%

An advertiser would have to buy ads on 135 different TV networks today to equal the reach from major networks 35 years ago!

5. ‘It’s not just for banner ads anymore’: The New York Times is making all of its ads available programmatically

The New York Times has made all of its digital ad units available through programmatic channels.

Why does this matter? A major publisher like the NYT opening up most/all of its inventory to programmatic shows that they no longer view it purely as a threat (lower CPMs, etc.).

This is part of a larger shift to digital which has led them to set a goal of 10m paid digital subscribers.

6. Connected TV Inventory Explodes, Video Advertisers Enjoy Results

Why do advertisers like connected TV advertising? It is the closest thing to TV ad quality with 97% completion rates without the viewability issues that have plagued mobile/desktop.

Why do networks like connected TV advertising? The CPMs that they can charge are 3–4X higher than mobile.


State of the Screens #30


Welcome to the thirtieth edition of State of the Screens.

1. Why People in Mississippi Have to Watch the Giants

Ever wonder why CBS/Fox show you a specific NFL game?

Quick answer. Whatever game they estimate will get the highest rating in your market.

Long answer. It’s complicated!

CBS selects a unique game for each of it’s 200 local affiliate stations.

Quote from Rob Correa — SVP of Programming @ CBS Sports.
In other words, it’s not as easy as, “Hey, everybody either really hates or really loves the Patriots, so let’s just put that game on everywhere.”

Other factors that they consider:
1) Home blackouts
2) Flexing
3) Cross flexing
4) Prime flexing
5) Constants
6) Mandatory pullouts
7) Primary markets
8) Secondary markets
9) Protected games.

The timing of selection (days out):
1) Initial list — 12
2) Final list — 6

The maps below show the 1:00 p.m. EST and 4:25 p.m. ESTgames by market during week 11.



Flashback. The Biggest NFL Schedule Release Story Is Whether ESPN Gets Stuck With Bad MNF Games Again

2. The Nielsen Total Audience Report: Q2 2017

New quarterly numbers from Nielsen showing explosive growth for mobile.

Total media usage in Q2:
1)
Q2–2016–10h 16m
2) Q2–2017–10h 48m (↑ 5%)

The big question. How much of this is dual screen?

Time spent by platform in Q2 (2016 vs. 2017):
1)
Live TV — 3h 55m (↓ 6%)
2) Mobile — 2h 27m (↑ 43%)


65+ is the only age group with growing consumption of live TV.


Connected TV households in Q2:
1)
Q2–2016–60.7m
2) Q2–2017–69.5m (↑ 12%)

59% of all U.S. households have at least 1 connected TV.

Broadcast only households in Q2:
1)
Q2–2016–13.6m
2) Q2–2017–15.7m (↑ 15%)

Broadband only households in Q2:
1)
Q2–2016–4.1m
2) Q2–2017–5.9m (↑ 44%)

3. TV stations are about to track you and sell targeted ads, just like Google and Facebook

The Federal Communications Commission (FCC) approved a new broadcast standard (ATSC 3.0) that will allow for internet-like targeting of advertising with local broadcast TV.

What are the benefits?
1) Addressable advertising
2) Improved video quality (4k)
3) Improved audio quality

This is currently being tested in the Phoenix market with the following broadcast groups:
1) E.W. Scripps Company
2) Fox Television Stations
3) Meredith Local Media Group
4) Nexstar Media Group
5) Tegna
6) Telemundo Station Group
7) Univision

Flashback:
1) ATSC 3.0: What you need to know about the future of broadcast television

2) World first, as RTL and partners perform IP-into-broadcast real-time ad replacement

Four broadcast groups are also working on a new set of standards for local TV advertising.

The four include:
1) Nexstar Media Group
2) Sinclair Broadcast Group
3) Tegna
4) Tribune Media

Our thought. Addressable advertising combined with improved workflow would both be cheered by advertisers.

Addressable = $$$. Networks charge up to 8x more for addressable advertising on TV compared to non-addressable.

4. Netflix, the Oscars, and the Battle for the Future of Film


A long read (20 minutes) on the complicated relationshipbetween Netflix and the Academy Awards.

The big rub. Netflix refuses to follow tradition in terms of theatrical release. Netflix usually does the minimum to qualify for the Oscars which involves debuting in at least one theater in Los Angeles for one week.

Quote from anonymous academy member:
“The issue I have with Netflix is they won’t play by the rules. They could go theatrically ahead of the release on their platform, but they won’t … I don’t suspect that they will be given a fair shake, at least not in the best-picture category, until they do. Or until the exhibitors die away and traditionalists whose lives were spent creating films to be seen on the big screen leave the business. I don’t see it changing overnight.”

Oscar wins for streaming services:
1) Best original screenplay (2017) — Manchester by the Sea (Hulu)
2) Best actor (2017) — Manchester by the Sea (Hulu)
3) Best foreign-language film (2017) — The Salesman (Hulu)
4) Best documentary short (2017) — The White Helmets (Netflix)

5. How ‘Free’ Killed Video, And What We Can Do To Save It


Google purchased YouTube back in 2006 for $1.65b.

Not bad for a company that was less than two years old!

There are now 5,880 video startups with an average valuation of $4.5m ($26.4b total).

More. A Decade Ago, Google Bought YouTube — and It Was the Best Tech Deal Ever

300 hours of video are uploaded to YouTube every hour.

The average YouTube partner earns $0.32 per 5k views — or a CPM of $0.06.

Note: 1 video view ≠ 1 ad impression (revenue)

More. GroupM: “Facebook has unique definition of video”

6. T-Mobile says its 6-second World Series ads were a home run

T-Mobile reports that the 6-second ads that ran during the World Series were twice as potent in recall and likability as the brand’s standard ads in prime-time.

YouTube also ran 6-second ads during the series.


These shorter ads are intended to fight our ever decreasing attention spans.

More. Few Viewers Are Giving the TV Set Their Undivided Attention

eMarketer estimates that 178m U.S. adults will use a digital device while watching TV.


More. Pre-Mature Decoration: Brands Deck the Halls, But Are Viewers Paying Attention?

TV[R]ev used second-by-second data captured through smart TVs to track when consumers tuned out of specific advertisements.

Tale of two ads:
1) Gap — ‘To Perfect Harmony’ Featuring Janelle Monáe (Attention Index: 49)


2) Dish Network — ‘The Spokeslistener: Mister Snowman’ (Attention Index: 155)


Translation? Ad #1 was 3 times more likely to get interrupted as #2.

Interruptions include:
1) Changing the channel
2) Pulling up the guide
3) Fast-forwarding or turning off the TV

Prediction. This type of measurement will completely change how we produce/test/choose creative. The largest brands in the world are starting to understand how little of their ads the consumer is actually watching and that is why so many are interested in 6-second ads.

7. Ad-Supported OTT Isn’t A Fad, It’s The Future

Roku had 6.7b hours of streaming during the first half of 2017 and 47% of those hours were ad supported.

Flashback. Streaming TV Viewers Complete 98% of All Video Ads, According to New Study


The big shift. The best place to watch TV is still on an actual TV, but how the content/ads are delivered is evolving.

More consumers watch their favorite shows through an online source than through a broadcast/cable source.


The pay-TV landscape grew 0.6% in Q3, but that was led by growth in streaming subscribers.

Subscriber growth in Q3:
1)
Traditional pay-TV — ↓ 872k
2) Streaming pay-TV — ↑ 962k

10 of the 12 providers below lost subscribers.