Sit down, Sopranos. Back up, The Bachelor. Get lost, Game of Thrones! The latest season of TV upfronts might be more dramatic than all three of you combined.
OK, we’re exaggerating...but only slightly. The real-world story has progressed so quickly and taken so many twists and turns that it’s felt like one of those shows you kind of have to read the recaps for. Assuming that’s why you’re here, we'll get right to it:
Let’s start with one of the biggest stories of the year: On May 2, the Writer’s Guild of America (WGA) went on strike to pressure the Alliance of Motion Picture and Television Producers (AMPTP) to provide a fairer contract, citing “business practices [that] have slashed [their] compensation and residuals and undermined [their] working conditions.” On July 14, the Screen Actor’s Guild, or SAG-AFTRA, joined the WGA with its own strike against AMPTP, in an effort to secure higher wages, new controls over the use of AI, and a new compensation model to account for the shift to a streaming.
With the strikes curbing (and then effectively ending) production on new scripted TV shows, the fall lineup has shifted from its usual mix of comedies and dramas to a parade of reality shows, game shows, and (gasp!) reruns.
At the same time, there’s been some massive personnel churn across the industry. From major layoffs at Disney and ESPN, to Don Lemon’s exit from CNN and Tucker Carlson’s exit from Fox, to NBCU’s loss of its CEO and its Chairman of Global Advertising and Partnerships (the latter of whom has gone on to become X’s (formerly Twitter) new CEO) shortly before the upfronts, many linear and streaming giants are experiencing some major upheaval. As to how these changes will impact their advertising businesses, there’s a whole lot of uncertainty—both in the short and long term.
Then there's the convergence we’re seeing in the historically fragmented landscape of streaming TV, with new mega-apps like Max, which has combined the content libraries of HBO Max and Discovery+, and Disney planning to fold Hulu and ESPN content into Disney+ later this year to form its own super-app (though Hulu and ESPN+ will still be available as standalone offerings as well).
While digital video represented about half of ad spend from last year’s upfronts, that share has grown to roughly two-thirds this year, with linear’s YoY share decreasing significantly as advertisers move their dollars over to digital. As for viewers? Well, July 2023 marked the first time ever that linear TV usage dipped below 50% of all TV viewing as streaming continues its inevitable rise.
So yeah, just a few small things for advertisers to keep track of.
To help you make sense of it all, we called in two of our experts, Susan Mandell, VP of Brand Development, and Paul Morrone, Integrated Client Solutions Director. Below, they explore all the biggest questions on advertisers’ minds and provide recommendations for how to weather the wild, wild west of convergent TV in 2023.
Paul Morrone: At the beginning of the writer’s strike, the first domino to fall was late night TV. Ever since then, programs like “The Tonight Show,” “SNL,” and “Jimmy Kimmel Live” have been running reruns instead of new episodes. Now that SAG-AFTRA is also on strike, and given that both strikes have no end in sight, production for new scripted TV seasons that typically start in the fall has been delayed. All of this impacts the content available for advertisers—a lot of that looks very different now than what they were expecting even just a few months ago.
Susan Mandell: If it does come to a point where there isn’t any new scripted TV coming out, people will be watching unscripted content like sports, as well as going back to CTV and streaming channels (and their giant mass of content) to find something they haven’t watched before…or to indulge with an old favorite. This poses the question of whether the whole situation will fuel more cord-cutting, because if you're not getting the content that you're used to from your cable subscription, you might want to scrap it and put that money toward some streaming services.
PM: While some of our favorite scripted series will experience delayed returns, networks are relying on alternative content to help them weather the storm. Sports and unscripted reality programming will serve as the linear TV advertising band-aid heading into the final stretch of the year. Advertisers will need to be agile and likely shift some of their linear dollars into capitalizing on live sports and/or unscripted content...or, potentially, away from linear TV altogether.
SM: In this moment, if you're advertising on those late-night TV programs that are now showing reruns, you're likely not going to get the consumers you thought you were, because they’re moving their eyeballs to content that's new to them—whether that’s a show they haven't watched before, a new streaming program, or even a new podcast. In many instances, they're not finding that new content in linear right now—with the exception of sports and unscripted content.
The question becomes, how do marketers pivot their current or traditional marketing plans in an effort to really be in front of the right people? If you want to be in front of the right people on video, you can certainly do that on social channels like TikTok, Meta, or YouTube. And luckily, union actors can still work on commercials, since they are covered by a different contract than the one SAG-AFTRA is negotiating with the AMPTP, so there shouldn’t be any significant curbing of the creative opportunities available to advertisers while the strike continues.
In addition to social, there’s also CTV, where you can really connect to a specific audience in ways that you weren't able to with linear. For example, you can use an audience segment of people who have done X, Y and Z, or who fall into a certain demographic, and reach them specifically where they’re viewing their content.
This is a really interesting moment for advertisers to think more about personalization and who their consumers are, who their target consumers are, what consumers drive the lowest customer acquisition rate and the highest lifetime value. How do you target those consumers to generate new revenue streams or new subscribers or whatever you may be selling? If you're thinking about how to maximize your dollars without wasting impressions on the wrong people, gearing it towards digital—think social and CTV—makes sense right now as eyeballs move away from linear to find new content.
SM: When you think about linear, the guarantee you have is that time slot, right? You can see your ad and know that it checks all the boxes, but outside of that, there's little that you're able to do from a targeting perspective, outside the show.
In digital environments, there are more opportunities to get consumers to interact—and for advertisers to see and track those interactions—than we’ve ever had in linear. On YouTube TV, for example, consumers can click to get more information on each ad as it pops up.
Typically, CTV ads that work really well are those with QR codes or those that have immediate calls to action. And this is an interesting moment where people tend to have their phones or devices in their hands while they’re watching TV, so they're already ready to interact.
PM: One of the things that I find really interesting about this moment is that it shows how quickly things can change in this space. Constant change is going to be the new normal. We've seen an abundance of streaming platforms trying to go to market, as well as convergence of content with Max and Disney, and that tumult is going to continue because not everyone's going to be able to survive.
Agility, and the ability to react quickly, is critical right now. For advertisers, it’s a great opportunity to embrace your sense of adventure—a test and learn approach is really going to be key.
SM: You’ve got to be flexible, and the digital space affords a lot more flexibility than we’ve ever had in linear. In this space, you can move dollars from a display campaign to a video campaign with three clicks of a button. For marketers to be agile and have their dollars flow in and out of mediums depending on what’s working and where people are, being in the digital space or the CTV space is really the best way to meet your consumers where they are.
Not to say that linear isn’t one of the strongest mediums out there—it absolutely is. But there are alternatives now that give marketers more flexibility to reach the right consumers without the price tag or the volatility that we’re seeing in linear.
Phew! This might be one of those seasons you want to watch a second time, just to make sure you catch it all. To recap the recap, here’s what advertisers should know:
In light of the writer’s and actor’s strikes, as well as larger audience trends, advertisers may want to consider moving some of their linear dollars over to digital video to capture audience attention on the channels and platforms where consumers are spending time. And with major changes seeming to happen more and more at the broadcast and streaming giants, digital offers advertisers the agility necessary to act swiftly in reaction to whatever plot twists come down the line.
Luckily, there’s one thing that’s certain: TV is one drama that won’t get cancelled anytime soon.
If you’re ready to lean into connected TV, but want more information on how to do it right, check out our connected TV advertising guide for the latest data, trends, and best practices.