LONDON via BEETCAM — What happens when the law of supply and demand gets unhinged? A good deal for new advertisers.

The coronavirus pandemic has spawned two contradictory business patterns:

  • Supply: TV viewers are booming as consumers are forced to stay at home.
  • Demand: But advertisers are pulling back, fearful of reduced consumer spending or because they have products which can simply not be purchased.

But Lindsey Clay, CEO of the UK’s Thinkbox, a group promoting the interests of ad-funded broadcasters, says that means deals are to be found.

‘Extraordinary value’

“You have got very large audience, (but) much reduced (advertiser) demand,” Clay says in this video interview with Beet.TV’s Jon Watts. “Therefore, the price absolutely plummets. What that means is that there is extraordinary value, ironically.

“It makes TV accessible to a whole range of businesses that thought they probably couldn’t afford it before. It means that advertisers who are in the very fortunate position of not being challenged on revenue, and being able to keep spending, can benefit enormously from that relationship between shared voice and shared market.

“If you can spend more in advertising terms than your share of market, it means that, coming out the other side, you’ll be in a hugely strong position. You will actually gain market share.”

Dichotomy & dilemma

Data shows TV consumption is increasing:

  • Nielsen thinks media consumption in Asia could rise by up to 60%.
  • Time spent watching TV has risen 17% in the US, says a VAB report, 39% more for children age 2 to 11 and 46% for kids age 12 to 17.
  • Samba TV found a similar spike in day-time US TV viewing.
  • Thinkbox sees a 46% jump in UK day-time viewing amongst ABC1-demographic adults.

But the boom is actually hurting advertising-dependent broadcasters:

  • The UK’s Channel 4 says: “The TV ad market set to be down in excess of 50% over April and May.” It is cutting £150 million from production budgets, £95 million from elsewhere and drawing down £75 million in debt.
  • ITV, the UK’s leading commercial broadcaster, says it will cut £100 million from production and scrap dividend pay-outs whilst noting “increased demand for library sales” – all told, measures to save £300 million.
  • Travel advertisers cut their ad spending by about 50% during the first two weeks of March 2020, MediaRadar estimates.

Sustain spending?

Thinkbox’s Clay is urging advertisers to benefit from lower prices.

“For large advertisers who can still spend, there is brilliant value to be had,” she says. “And similarly for smaller advertisers, too.

“All of the academic studies on marketing behaviour through a recession would say that there are enormous to be gained from advertisers that can keep spending.”

She says prior investments by broadcasters in video-on-demand services and advertising technology will continue to accelerate.

The interview was conducted remotely.

By Robert Andrews on @robertandrews