Market Update 3.24.20: CTV Avails Increase; Social Holding Steady; America’s Freedom Problem

March 24, 2020

The past week has seen monumental shifts in how we think about ourselves, our work, our communities, our government, and even our country. Freedom is a stubborn thing. As Americans, we are resilient people with a fierce sense of individualism. The pandemic is challenging us to our core as we are being asked to give up many of those freedoms for the value of the whole. This doesn’t come easy. And, unfortunately, there is a cost to that: we will most likely endure a longer recovery with potentially a higher spike and longer “smoothing of the curve” than countries that don’t have similar personal and cultural values. Freedom has a price, as we’re learning the hard way.

Advertising itself is often seen as a form of commercial entertainment in normal times. Not so today. For those of us focused nearly exclusively on digital, we find ourselves as the lifeblood of commerce right now. Essentially, it’s the only thing working. And we take that responsibility with an extreme soberness and sense of gravitas. Today, the work we’re doing together with you isn’t so much about transactions and revenue but helping maintain jobs, comfort, continuity, normalization, and dare I say, glimmers of hope. 

With those responsibilities squarely in mind, here are some recent trends we are experiencing and observing.

CONNECTED TV SEEING THE GREAT SPIKE IN ADVERTISING AVAILS

Our partners at the Trade Desk have now begun sharing more frequent economic updates. Yesterday, we received some of the following information.

As you can imagine, CTV is the channel with the most dramatic spike in ad opportunities due to the influx of users working from home last week. The first graph below is data from 3/10 – 3/18. CTV avails on Tuesday last week were up 15% from last week, avails Wednesday were up 22%.”

Connected TV, as a reminder, are Internet connected devices and streaming services like Roku, Hulu, Apple TV, and Sling. I’m not going to get into the variances between Over-the-top (OTT), addressable, and CTV right now. Just suffice it to say it’s generally streaming, internet-enabled television and streaming video. And it’s on the dramatic rise. Inventory is available and growing, and supply outweighs demand at this time.

The Trade Desk pointed to two providers in particular that are seeing large gains — Sling and Disney.

Sling

  • Video-on-demand (VOD) viewership is up 29.3% and 66% for avails, far and away the largest portion of increase across Sling.
  • News viewership is up 18% and 34% for avails
  • Entertainment viewership is up 9% and 17% for avails
  • Sports viewership is down 10% and 21% for avails

 Disney+

  • 8% increase Week over Week in unique users
  • 11% increase WoW in sessions length
  • 13% increase Wow in ad impressions.

Another interesting insight is the growth in network news watching by all demographics, including those in the 25-35 age range, a range that rarely accesses network and local news. 

PRICES SPIKED, THEN FELL

Watching media pricing right now is a little like watching the stock market. It’s fairly unpredictable. However, basic economic theory of supply and demand still holds. Again, from the Trade Desk, here are their trends across both display and CTV.

As far as strategic brand buys, Ciceron continues to fall into the camp that CTV buys have much better effectiveness than display, even if costs are somewhat higher. Video just has a better brand impact than display (banner) advertising. However, creative for video content must be tightly evaluated for appropriateness, as I pointed on in Friday’s briefing. Simply repurposing past video creative may or may not lend itself to the mood of the marketplace right now.

FACEBOOK HOLDING STEADY

Getting financial trends information out of Facebook is like getting a family-sized pack of TP out of a Target store. According to our own trends data stemming from client spends across multiple industries (entertainment, home furnishings, healthcare, etc.), the Facebook ecosystem is experiencing three dynamics: 

  • Huge increases in the public’s use of Facebook/Instagram with it being an “always-on” media channel
  • Facebook’s own initiatives to squelch disinformation campaigns, providing better brand safety
  • Steady prices

On that last point, I expect that Facebook prices may decrease in the short term (read: the next week or so) as brands and their people continue to adjust to a work-at-home environment and brand campaigns are in the middle of KPI readjustments. So, for those brands who are willing to invest, now is a good time as long as creative and messaging has been thoroughly examined for cultural appropriateness for these particular times. I expect prices to increase as dollars continue to flow from traditional I/O based television and live event budgets into digital channels with Facebook being a large beneficiary. 

OLYMPIC CANCELLATION/POSTPONEMENT 

As I was writing this briefing, it was announced that the Olympics are formally on hold until next year. (See? I can’t even get through writing a briefing without changes.) What does this do to the advertising marketplace? Potentially could flood the market with brand dollars that were going to go into the games. The Olympics and the 2020 elections were the two largest spend categories. The vacuum left by the Olympics will get filled, most likely, with network and connected TV, in my estimations, since those were the teams brand-side who were engaged in those previous strategies. They’ll pivot. Many brands will save those dollars as well in a rainy-day fund. Many will spend if they’re held to “use it or lose it” models.

 

CONCLUSION

As you can see, all of this is moving at breakneck speed. I hope you are gaining valuable insights. Please feel free to share, and as always, reach out to me or your Ciceron account leader with any questions or concerns.

 

Andrew Eklund

CEO