The TV Ad Business's "branding problem"
Are the TV giants staring at a crossroads?
According to Sports Business Journal, the NBA on NBC is back, and Inside the NBA is done.
My first thought - is this the last time we see a giant broadcaster hold onto major sports rights? Or could - weirdly enough - programmatic advertising keep the networks in the game?
I’m trying to make a logical argument, but bear with me here…
NBCU is back in business with the NBA after more than two decades, paying $2.6 billion per year, while ESPN is shelling out $2.8 billion annually, and Amazon close to $2 billion for a smaller package.
This all proved too rich for Warner Discovery’s debt-ridden blood, despite a long history with the league, and that fact that NBA games would seem to be vital to keeping the lights on at networks like TNT. I wonder if eventually sports rights are going to become so exorbitant - and so crucial to streamers - that the tech players like Amazon, Netflix, Google etc. will eventually snatch them all up.
Unless…
Could programmatic advertising unlock far more sports value for the big TV companies?
I ask this having had Alison Levin, president of advertising and partnerships at NBC Universal, on my podcast this week. We talked about the enduring power of the company’s ability to sell brands on multifaceted tentpole events - while also trying to expand the TV ad pool.
The 2024 Summer Games in Paris are the ultimate example/test case of this bifurcated strategy. They could yield a blueprint for the future, or create a situation ripe with tension.
NBCU is naturally going big with the Olympics, selling monster, multichannel packages to top sponsors who have surely been promised huge, live primetime ratings.
“Brands want us they want to tell stories that surround [NBCU’s] stories in a meaningful way,” Levin said. “And so we just have a track record of doing that. And when you tie that to the reach that we have on our full portfolio… the state of mind that you get to reach people in when they're rooting for America and everyone's coming together in these moments of joy and suspense.”
At the same time, the company is boldly creating more on-demand, snackable streaming content on Peacock (including every event) for short-attention-span, may-not-love-sports-that-much Gen Z-ers.
And, it’s opening up Olympic ad inventory programmatically, theoretically bringing far more advertisers to the pool, and accommodating a much wider range of budgets.
“That's opening up the door for thousands of brands that have never been able to participate in this huge cultural moment before,” she said. “Those are still the big opportunities. But for brands that just want to participate in that moment, that want to capture the joy and the co -viewing and the suspense, they can do that. So it really is an opportunity for brands of all sizes, depending on how much investment you make into the space.”
Sponsored——
Mark your calendars for June 11 and 12! Join us in the heart of NYC to celebrate IAB Tech Lab’s 10-year journey of shaping standards for a secure and private ad-supported digital economy. This two-day event is your golden ticket to rub shoulders with the pioneers and thought leaders of online advertising. Immerse yourself in insightful discussions about the industry’s most pressing issues, navigating through transformative changes in privacy, addressability, TV convergence, and the dawn of AI. Clara Shih, the CEO of Salesforce AI is giving one of our keynotes, and you will want to follow the LinkedIn IAB Tech Lab page to see our latest can't-miss speakers. If you work for a brand or an agency we have a limited number of free passes, so sign up today, and for everyone else you can use code: Summit611_Shields to save an extra $100. See you at the Summit!
Can TV have it both ways? Are these companies going to be mostly reliant on massive live events, and brands that just want to reach everybody? Or can they become platforms where thousands, if not millions of brands buy ads, and sell products directly to consumers like Google and Meta?
That’s been the dream for several years. But TV is fighting ID-rich tech platforms, and increasingly retail media giants, which can promise tight, almost immediate links between ad exposure and purchase. Some would argue that focusing too much on performance advertising is a road TV shouldn’t go down.
Plus, to date, there’s been a hesitancy to open up tentpole events like live sports to a huge pool of DTC brands and small-to-mid-sized business. Even Amazon, with its Thursday Night Football package, has stuck to a tried and true playbook of catering to a short list of big spending sponsors.
It’s one thing to sell a portion of TV ads through the Trade Desk. Is it worth carving up huge live events to do dynamic ad insertion, so every viewer gets their own targeted TV ad?
“That was the Visible World dream,” said Tara Walpert Levy in a new video interview I conducted earlier this week. Levy was talking about the ad tech firm that Comcast acquired back in 2015, which promised programmatic TV advertising on steroids.
“I think the reality is the technology has been there for a long time,” Levy said. “I think the business capability, the business interest, the business need at that level, I think may not have been strong enough.”
Is it now? With sports rights spiraling out of control, could we see more TV networks willing to see if selling to a million small brands nets them more cash than selling to a handful of giants? Could that help keep broadcast and cable in the sports game? (Side note - if you look at the age of linear TV viewers in this great piece from WSJ’s Joe Flint, you could ask yourself why the sports leagues still want to be on broadcast and cable.)
Well, for starters, TV needs to really up its ability to prove ROI if it wants to cater to all these new brands. That’s where Levin sees an opportunity - both from a technological and storytelling perspective.
“We’re [working on] faster attribution and measurement to catch up to some others,” she said. “And we've been hyper focused on this to take back that narrative a little bit. Someone mentioned to me the other day, like, I think TV advertising ironically has a branding problem.” As in, people think it’s just for branding.
That’s part of the reason why you’re seeing the NBCUs of the world ink more deals with the likes of Instacart, even Linkedin, to prove its ads drive actions.
“I'm so bullish that actually that is what helps to prove the value of what it is that we're providing,” Levin said. “We want to quickly prove the value of attribution and measurement and put it in the hands of our agency and brand partners.”
The faster that happens, the quicker NBCU can start paying for that NBA deal.