LONDON — As the COVID-19 pandemic lockdown hits broadcasters’ advertising income, many are making cost cuts to stay afloat.
But one ad exec says it is crucial they cut from the right areas – because not doing so may mean they will find it difficult to bounce back in the future.
“The big, big question is, ‘Are they cutting the right way?’,” says Jakob Nielsen, CEO of GroupM advanced TV ad ad unit Finecast, in this interview from London with Jon Watts for Beet.TV.
Cut the past
He says broadcasters right now are cutting tech investments.
“After talking to broadcasters all over the world, there is a tendency (for them) to cut in the future-focused areas, whether it’s technology development, content on streaming devices, etc.”
“That’s dangerous. Traditional broadcasters are already under a lot of pressure from the Disney+, Netflix, Peacock, etc. If you start cutting in that space and on technology, which broadcasters really need to invest in, you can accelerate that decline in the future.
“If you keep the money in the future-proving area, you do well. You should probably be brutal in cutting, if you have to cut, in areas that was the past. But that’s not necessarily what is happening.”
Finecast in focus
In 2017, WPP’s GroupM launched Finecast, aiming to “help advertisers address hard-to-reach TV viewers through a single access point with standardised measurement”, beginning in the UK and since launching in Australia.
Finecast aggregates video ad inventory in programming from some of the UK’s main commercial broadcasters, plus over most main set-top and over-the-top devices, from Sky’s satellite box to games consoles.
Finecast claims to offer addressable ads in programming from ITV, Channel 4, Channel 5 and Sky, distributed over platforms from YouView, Sky and Virgin Media, using data partners like Acxiom, CACI, Experian and Mastercard.
It says it helped FMCG advertisers find up to 35% higher consumer purchase intent with targeted TV ad campaigns than with traditional linear TV.
Linear is finite
The company is running a series of webinars during the COVID-19 pandemic.
Going forward, Nielsen expects a continuation of recent shifting behavior.
“Traditional linear TV is in decline, and it will one day stop to exist because we will watch everything on our terms,” he says.