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Since our first-ever U.S. Advertising forecast was published in 1950, we’ve been making headlines and sharing our unique perspective and outlooks on the marketplace. Here you’ll find our latest headlines, press releases and thought leadership.

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Why It’s Time for Local Media to Finally Embrace Programmatic

July 23, 2019 // In the News
Thought Leadership
By KATHY DOYLE.  Published by BROADCASTING & CABLE on 23 July 2019.

I’ve spent my entire career in local media and I’ve seen this industry accomplish amazing things over the years.

I’ve also seen tremendous and continuous changes to the local ecosystem that demand a relentless pursuit of evolution and innovation.

And right now, the changes are coming faster and the demands for innovation are growing stronger than I can ever remember.

If you know anything about this space—you know that it’s labor-intensive and not always particularly easy to execute. The good news is that things are finally starting to move on the automation front for local media investment, and not a moment too soon.

The truth is, we’ve needed help streamlining local buying for a while.

In fact, our team at Mediabrands has been pining for greater automation for nearly 15 years. As far back as 2005, we had a vision. What if we could build a software system that would help us buy, keep track of, and optimize local media campaigns on the fly?

We didn’t know it yet, but our dream was essentially to create a DSP before anybody had a name for it, in a medium that was far from digital. But alas, we were never able to put the funding together—and the dream eventually sputtered out.

Fast-forward to today and local media has only gotten more complicated, and the logistics more challenging. Everyone knows that ratings aren’t what they used to be (During the most recent TV season, the average broadcast TV show lost 16% of its audience between the ages of 18 and 49).

As a result, campaigns that used to require our agencies to purchase 5 million different ads spots across thousands of shows on hundreds of stations now require twice as many ads to deliver the same reach.

That’s just the fragmentation challenge. As you’ve surely read or experienced first-hand, marketers are awash in data. And they want to use it on every media campaign to zero in on targets and deliver tangible, trackable results. Each new data set gives us the opportunity to target more effectively, but it also adds a level of complexity to an already labor-intensive process. As data options increase, we must create automated processes in order to efficiently act on it.

Fairly or not, media execution is increasingly being graded against the speed and precision of the biggest most powerful tech companies in the world. So, we’ve got to up our game. In the past year, have done just that by employing sophisticated software to help us execute multiple local buys via a digital platform. Additionally, we’re on the cusp of using data more effectively than ever before to target our clients’ customers, while gaining speed and efficiency. But the buy side can’t do it alone. We need the systematic changes that agencies are implementing to also happen on the sell side. We need our broadcaster partners to match our use of software and data and help ensure that local media channels are a viable, affordable, smart and hard-working option for advertisers.

The risk in not doing so—given how fast the media ecosystem is changing—is that local gets stuck with a label of being slow, expensive to execute and inexact compared to digital media—and starts getting left behind entirely.

To be sure, some of our partners are well on their way to preparing their local ad inventory for a more programmatic, audience-based future. I applaud the work broadcasters have made in their delivery of log times. This is an important advancement for the industry, not only for reaching parity with digital platforms, but serving as the key to solving stewardship challenges that plague local broadcast.

The onus for advancement, of course, doesn’t all sit on the broadcaster side. As agencies, we still have more work to do to advance our evolution. For starters, agencies need to move to impression-based buying for local investment. Most of our business has been transacted on this currency since 2016 without a hitch.

Beyond that, we need to find a solution to the antiquated approach of scheduling and re-scheduling compensatory weight owed for delivery shortfalls. The current process is a losing proposition for both the buy and sell side and it needs to change.

From an automation perspective, starting in Q3, we will begin executing orders and managing the stewardship process through Hudson MX. We expect to be able to recognize greater efficiency and increased accuracy, expediting the approvals and rejections of make good proposals and streamlining the invoice reconciliation process.

I can honestly say that the desire for change has never been greater in the local investment arena. The TIP initiative is an important step forward for the industry and demonstrates the appetite that broadcasters have for greater automation. We need to embrace this opportunity and get on board with the momentum.

Now is the time for the entire ecosystem to advance in lock step. My best advice to our broadcast friends: get your five brightest people in a room with a whiteboard and don’t let them out until you have a plan to rewrite the antiquated business rules we operate under every day. You will come up with something brilliant and we’ll all benefit from that brilliance.

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Real talk with magna global: the media economy report

June 21, 2019 // Thought Leadership

Brian Hughes (EVP, Audience Intelligence & Strategy) is joined by summer residents Alice Bell-Black (Intelligence) and Makeyba Mowlah (Marketing Operations) to discuss the 15th Media Economy Report.

Contact us to access the full report

Cannes 2019 with Dani Benowitz

June 19, 2019 // Thought Leadership

US President Dani Benowitz is joined by Stacey Geyer (Director, Corporate Communications at Orion) to discuss all the major trends and hot topics at this year’s Lions Festival.

Contact us for more information.

GLOBAL AD SALES GROWTH CONTINUES TO COOL IN 2019, MAGNA SAYS

June 17, 2019 // In the News

By I-HSIEN SHERWOOD. Published by ADAGE on 16 June 2019.

Digital ads now account for more than half the worldwide market

Non-Linear Sales a Growing Part of TV Revenue: Magna

June 17, 2019 // In the News

By JON LAFAYETTE. Published by BROADCASTING & CABLE on 17 June 2019.

Full-episode players and Hulu will capture $2.6B in 2020

While forecasting a decline in linear TV, media buyer Magna said that U.S. non-linear advertising sales by television companies will increase 22% to $2.6 billion in 2020.

Magna Logo

Non-linear advertising–including network full-episode players and Hulu–will represent 6% of national TV ad revenue, Magna said, reflecting the continued demand for TV, even as the number of traditional ratings points dwindle.

“Linear television remains attractive for its reach and brand safety, and affordable by the tech sector,” the Magna report said.

That demand is pushing TV commercial prices on a cost-per-thousand viewers basis up more than 10% a year to more than $50 for adults 18-49 in prime time.

English-language broadcast network ad revenue is expected to be up 1% in 2020 thanks to a boost from the Olympics and presidential election. Without the Olympics and elections, spending would be down 4%.

Cable networks are looking at a 0.5% drop in 2020 including the Olympics and election spending or 2% excluding those events.

Magna said that digital advertising sales growth slowed in the first quarter of 2019 to 16%. The agency expects digital ad spending to finish 2019 up 13% and grow just 10% in 2020.

The technology sector has been the most dynamic ad spenders because of Intense competition between new internet giants and big old tech brands over smart home products, over-the-top video-on-demand services and cloud services, Magna said. The launch of 5G will re-ignite marketing in an otherwise mature wireless sector, the agency said.

Direct-to-consumer brands will increase traditional media spending by more than 40%, from a relatively low base, according to the report. “Those brands are particularly attractive to television vendors as they come to the TV market with little leverage and are willing to pay higher rates than CPG brands that have been on TV for fifty years and have the scale to negotiate sub-market cost inflation,” Magna said.

Overall, Magna forecasts that net advertising sales in the U.S. will be up 5.1% in 2019 excluding special events. For 2020, ad sales are expected to grow 5.8% to $233 billion, with the Summer Olympics and presidential election generated $6.2 billion in incremental revenue, up from the $5.4 billion in incremental revenue added by Olympics and elections in 2018.

Globally, Magna has raised its forecast, now calling for 5% growth to nearly $600 billion in 2019, from a December estimate of 4.7%. Either way, it’s a 10th straight year of growth.

For 2020, the agency sees total growth of 5.4%.

“Global ad spend continues to grow as the economy remains strong in key markets but two factors are slowing down the growth rates in 2019: one is cyclical (the lack of major events in 2019, following a record year in 2018) while the other is structural: digital ad formats maturing (from % in 2018 to % this year) as they now account for more than half of total advertising sales,” said Vincent Letang, executive VP, global market intelligence at Magna. “However product innovation (smart homes, cloud services, OTT, 5G) and marketing innovation (direct-to-consumer brands) will continue to drive ad spend growth this year and next.

Worldwide traditional linear advertising sales–including broadcast TV and radio, newspaper and magazine ad pages and out of home–will decrease by 3% to $290 million in 2019 while digital ad sales will grow by 14%.

Linear TV ad revenue will decrease 2% to $175 billion in a non-Olympic year. Excluding the U.S., linear TV ad revenue will be up 1% in 2019.

Digital ad sales this year will represent more than half of global ad sales for the first time this year, reaching $304 billion, or 51% of the total.

The bulk of digital advertising growth will come from ad impressions and clicks on mobile devices (mostly smartphones). Mobile ad sales grew by 24% in 2019, to account for 68% of total digital advertising while desktop-based ad revenue will shrink 3%, due to declining usage and ad blocking

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