The television sector has to combine and align – or lose the bigger battle
Following his visit to the Future of TV Advertising forum, Omnicom Media Group's Peter Horgan outlines his action plan for how to save free-to-air TV, before the industry strangles it into 'an early grave'.
It’s been nearly three weeks since MCN’s chief executive Anthony Fitzgerald delivered his call-to-arms for the broadcast industry to put aside self-interest, join forces and blow up its legacy systems and thinking at the Future of TV Advertising forum. It’s had me pondering, and as a long-term TV enthusiast, I feel compelled to respond.
MCN’s Fitzgerald: Remove the “transactional impediments” for buying TV
I remain a supporter of television’s top-of-the funnel attributes in driving brand awareness and consideration. Advertisers would struggle in a world where TV was gone or diminished.
But the broadcast sector has challenges – real challenges. The five-point action plan that was put forward needs all stakeholders to pivot toward action, and quickly.
To recap, Fitzgerald’s central arguments, at least in how I saw them, were:
- Reinvent and expand the TV measurement system
- Remove the “transactional impediments” for buying TV
- Create a better advertising-supported viewing experience by reducing adloads.
- Invest in compelling content
- View media as a growth driver for business as opposed to being viewed as a cost center
I did a quick(ish) fire response at the end of Fitzy’s address, with a little more time to reflect, here are my thoughts:
The disconnect between the planning currency (quarter hour) and the post currency (minute by minute) is making TV unbuyable.
A 10%-20% under delivery versus planned activity is virtually guaranteed. Accepting this ongoing is a form of channel suicide. The solution is for the TV sector (as owner of OzTam) to introduce break ratings in which buyer and seller align behind one currency. It’s only the first step in a solution, but we must start. It could happen in a month. If we need to detonate and reform the current body, to overcome the legislative impediment, do it. It’s that important.
Reduce duplication and complexity with a single gateway for TV advertisers to the entire multiscreen TV sector.
As I’ve said, transactional headwinds are killing television. It needs to be easier and cleaner to transact. TV is a complicated business, but to create three or four complex infrastructures will be wasteful and slow. The boat will be missed.
Agencies are not blameless in this either. We too have legacy systems. If they are too unwieldy to integrate with a single TV platform, we will commit to circumvent those systems and transact TV on an external platform.
If the commercial plumbing is making FTA TV unbuyable, adloads are making it unwatchable.
Encouraging viewers to remain in an ad funded environment, by making it less interrupted, might not seem financially prudent in the short term, but it needs to be viewed as a brave consideration for longer term FTA viability.
Will advertisers pay? Channel effectiveness will determine what the market will pay. The status quo means we are only accelerating the audience reckoning that is threatening TV, and its attributes for advertisers. It’s easy for me to encourage from the cheap seats as it’s not my profit and loss. It would result in short term revenue pain, but sustainability demands alignment and courage.
Commitment to content investment has been a badge of honor in the TV business.
Programming directors often end up as CEO. That commitment is threatened by the cheap firehose of user generated content, and the looming audience cliff that would mean the end of FTA TV’s raison d’etre for advertisers.
How can I scale, rather than how cheap?
In a world where targeting expertise at the bottom of the funnel is driving ROI multiples that would make Scrooge McDuck swoon, sophisticated marketers are asking how can I scale, rather than how cheap. The model only scales while you can feed the higher funnel. I mentioned that TV remains uniquely effective in this space.
I don’t speak for the industry, I don’t even speak for the agency community. But in approaching these crossroads, we are all in it together.
Act now, or we will mourn the passing of efficient mass awareness, if we indeed do strangle FTA TV into an early grave.
Peter Horgan is CEO, Omnicom Media Group, Australia New Zealand and chairman of the MFA
You are protecting your own interests, and your own interests only. The reality is that quality programming exists at a reasonable cost today, and people are willing to pay for it through services like Netflix.
The TV networks dug the graves they’re lying in by failing to adapt with technological change.
Media agencies are to blame as well, as they were the ones pimping out TV to all of their clients in order to chase commission from the networks, thus clogging up already terrible shows with a mind numbing amount of even more terrible ads for Weetbix.
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Hey Self-Serving, you seem to be advocating that media agencies run ads on Netflix … which doesn’t carry third-party ads.
I’m sure that if Netflix did there would be a surge of ad revenue that would help reduce its $20b debt.
Also it is interesting to note that as at the end of 2017 it had 117.58m streaming subscribers globally. Given that ‘everyone has Netflix’ Australia must have one-in-five of its subscribers.
But given that Netflix provides no usage data, it would be irresponsible to splurge advertiser dollars on an unreported publisher.
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