Will the pandemic modernise advertising trading practices?

With tough decisions ahead about how to spend advertising budgets in Q4, will traditional channels need to modernise their trading terms to remain attractive to advertisers?

 

Linear TV has long been facing a battle to maintain its relevance in a media marketplace that becomes more fragmented week after week, let alone year after year. Audience attention is divided amongst On Demand services (both paid for and ad funded), Social Media, and especially for younger audiences, gaming. All of which point to plans no longer being able to rely on a single platform in order to deliver the necessary reach and cut-through to deliver the required sales effect.

 

For children’s audiences, under “normal” circumstances linear TV remains the logical choice as the primary place to spend advertising budgets. It is able to deliver the largest, verifiable, reach at the lowest cost. Whilst studies across multiple sectors still demonstrate it to have the highest profit potential, as well as the most positive impact on increasing the effectiveness of other media channels.

 

But is this enough in a world where the threat of a second lockdown remains a threatening prospect? Especially when falling linear TV audiences (even in lockdown children’s impacts on many commercial children’s channels have declined YoY) pose the very real prospect of media owners trying to inflict inflation on a market which requires stability.

 

Despite all of the threats that linear TV has come under over the past decade, there has still been an industry wide failure to adapt to a trading policy which offers advertisers a greater level of flexibility. Booking to AB deadlines is understandable given the demand for what is ultimately a finite inventory, however in 2020 those deadlines will come too soon for many advertisers to be able to commit. There has certainly been a softening in the stance of many media owners in this space which has been greatly appreciated by the market, but has this newfound flexibility gone fa enough? Amendments and cancellation policies remain some of the strictest within adland, whereas businesses are now having to make plans which have provision for short term cancellations in case of a second lockdown (however likely or unlikely that may be). This is why platforms such as YouTube and Facebook will likely gain more prominence than ever before. The ability to have a campaign go live within 24-48 hours of approval, with no penalties if spend has to be paused or removed, will factor into many decisions this Q4.

 

That is unless, of course, there is a change in stance from the linear TV powerhouses.

 

Source: MediaOcean/BARB