Consumers may be driving the expansion of television viewing options, but publishers still face a balancing act between reducing ad loads and meeting financial goals. Ad buyers, meanwhile, are going to want to see demonstrable results for their investments in return for increased prices due to inventory reductions.
“I think it’s a really complicated challenge that the industry is in right now,” says Adam Gerber, SVP, Investment at GroupM agency Essence, who has spent nearly three decades on both the agency and publisher side.
“I think that a number of networks have been very vocal and, in many cases, very right about one of the challenges that exists in the marketplace today, which is consumers have lots of access to content in non-ad supported environments,” Gerber says in this interview with Beet.TV at the Advanced Advertising Summit.
Migration to those environments is occurring “because the experience is better, the aggregation of content is monstrous, it’s a really easy and enjoyable experience for them,” Gerber ads.
Ad-supported TV in general—whether linear or across linear platforms like OTT or VOD or via digital video records—increasingly are “I don’t want to use the word painful but challenging to live through, especially if the viewing behavior moves from single show to binging, where you’re watching multiple episodes all at once.”
Given that viewers are more in control than ever, the longtime ad model has been under increased scrutiny.
“I think the initiatives that networks are taking to really address clutter ad pod length and some of the format issues with regard to traditional fifteens and thirties potentially being replaced by other more innovative formats are what’s needed,” says Gerber.
The challenge to publishers: how they make it pay out.
“Because if you decrease inventory, there’s an immediate challenge related to revenue,” Gerber adds. “If you’re a public company, it doesn’t help you to go into your boss and say we’re going to have a decrease in revenue because I’m making this change to our ad model.
“It think from the advertiser and buy side, there has to be a payout in terms of ROI and improvement in performance if we’re going to be talking about any kinds of changes to the pricing that we pay for our inventory.”
This video was produced at the Advanced Advertising Summit in New York. Please find more videos on this page from the Beet.TV series presented by 4C.