A year ago, I asked a room full of top ad buyers if they believed streaming ad prices would grow faster than inflation over the next decade.

Not a single hand went up.

They were looking at the wrong number.

They were looking at CPMs, which is what you pay for a thousand people to see your ad. The number on the invoice. The number that makes linear TV look cheap at $20 and streaming look expensive at $50+.

But there's another number that matters more: the eCPM, what you really pay to reach the people who might actually buy your product.

And when you do that math, everything flips.

Let's break it down into 4 big questions:
1) What is the difference between a CPM and an eCPM?
2) Why is political advertising the clearest proof?
3) Where are streaming CPMs today, and where are they going?
4) What's the bottom line?

What is the difference between a CPM and an eCPM?

A CPM is what the invoice says. An eCPM is what you actually paid to reach your buyers. If only half the people watching are your buyers, your real cost doubles. If your target is 5% of the population, your eCPM is 20X your CPM.

Here's what a $20 untargeted CPM actually costs across different advertiser categories:
1) Pet owners - $28
2) Beer drinkers - $53
3) New car buyers - $168
4) Home buyers - $539

Same $20 CPM. Wildly different effective prices. The audience you target determines the price you pay.

Why this matters: Pet food brands can afford to reach everyone. Car dealers and realtors cannot. And the further you move down that list, the more a 'cheap' ad buy is wasting your money.

Why is political advertising the clearest proof?

Nobody did this math earlier than political campaigns. They had to. Their target is the narrowest of any major advertiser, and they have a deadline no one else has: Election Day.

Only 8% of adults are persuadable midterm voters.

The math:
1) 15% of adults aren’t registered
2) 50% of registered voters skip midterms
3) ≈ 19% are persuadable, or 8% of adults overall.

Why this matters: Political campaigns will spend $516 per persuadable voter on video advertising during the 2025-26 cycle. Every dollar that hits the wrong person is a dollar wasted. In a close race, that waste can cost you the election.

Flashback: The Incredible Rise of Streaming Ads in Politics

Where are streaming CPMs today, and where are they going?

Streaming TV CPMs average around ≈$20 for all households, but the price changes a lot depending on where you run the ad

Streaming TV CPMs (eMarketer):
1) Netflix - $37
2) HBO Max - $33
3) Peacock - $32
4) Amazon Prime - $28
5) AVOD/SVOD Average - $26
6) Disney+ - $25
7) The Roku Channel - $18
8) FAST Average - $17
9) Hulu - $17
10) Tubi - $17
11) Pluto TV - $14.01
12) YouTube - $9

Political is the canary in the coal mine, but every advertiser with a small target audience faces the same math.

In Screen Wars, I laid out the Rule of 100:
1) 100% of TV will be streamed
2) 100% of TV advertising will be streamed
3) 100X advertiser base vs. national TV today
4) $100 CPMs
5) $100B TV ad market in the U.S.

Flashback: $100 CPMs and the Future of TV Ad Prices

What's the bottom line?

CPMs are a fiction. eCPMs are the truth.

A year ago, not a single hand went up in that room of senior media buyers. They compared $20 and $50 and concluded that the linear option was the better deal.

Today, Disney, Hulu, and Paramount are opening premium inventory to targeted political campaigns through Cross Screen Media. The market is starting to price what the eCPM math has always said. If your buyer isn't everybody, targeted streaming is the better deal.

The audience you target determines the price you pay. Most advertisers haven't done the math yet. When they do, the $50+ CPM won't seem expensive. It will seem like the last bargain in television.

Any confusion concerning who has the top individual TV shows -- linear, streaming, or otherwise -- should be clear when Nielsen -- or others -- release show-by-show traditional average viewer comparisons.

But is there something missing?

Looking at a broader looking list of shows for the 2024-2025 TV season, shows Netflix with five of the top ten shows. This is based on 35-day cross platform TV and streaming viewing.

“Squid Game” was the top show -- averaging 27.1 million viewers, according to a Nielsen chart.

NBC’s “Sunday Night Football” -- the perennial winner over the past decade for broadcast/cable TV shows -- was next at 21.6 million. Third place was another Netflix show “Adolescence”.

Looking under the hood, there is a mixed picture concerning broadcast-originated original shows that have a significant mix of streaming viewing, live or delayed viewing.

For example, 13% of “Sunday Night Football” viewership came from streaming; 32% of CBS’s “Tracker”’s 19.0 million (fourth place); 49% of ABC’s “High Potential” (6th place, 16.1 million); and 34% for CBS’s “Matlock” (7th place, 16.0 million).

What also probably should be factored into this list, is what part of the “Squid Game” viewing comes with advertising and viewing with no-advertising? Same for say Prime Video’ “Reacher” -- in fact, all shows starting on broadcast or streaming.

That’s the rub for advertising going forward. For a long time now, brands have been way less focused on program-driven media plans than audience-driven plans. Big time sports programming may be the exception.

Screen Wars Media notes that “audiences are not transitioning to streaming at the same rate for all shows.”

In particular, “SNL”, procedures shows (CBS’s “NCIS: Sydney”, NBC’s “Chicago Med”), and unscripted shows (NBC’s “The Voice”) only get around 13% to 18% of their viewing from streaming platforms.

On the flip side, HBO shows’ “The Penguin” and “The White Lotus”, as well as networks comedies -- ABC’s “Abbott Elementary”, NBC’s “St. Denis Medical” -- get way more, anywhere from 43% to 92%.

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ESPN is facing down the barrel of a self-made paradox: the company’s upcoming full-service streaming platform, creatively named “ESPN,” might accelerate cord-cutting while potentially making streaming more expensive for consumers. ESPN isn’t doing this out of spite or stupidity, though. Cable still throws off billions in revenue for a select few networks ($10.5 billion for ESPN in 2024). But the industry faces its last gasps. Since 2011, ESPN has lost 37 million subscribers, per State of the Screens, while the number of U.S. TV viewers who don’t subscribe to pay-TV will soon surpass the number who do. Remaining in the pay-TV bundle without a digital succession plan offers about as much viability as Bob Iger’s failed torch-passing. ESPN’s streaming launch serves as a bellwether for the business that could either consolidate sports streaming or fragment it further. Either way, its success or failure will directly impact you, dear consumer. 

ESPN+, the brand’s first real foray into streaming in 2018, boasts 25 million subscribers. However, most subscribers access the service through the Disney Bundle (Disney+, Hulu, ESPN+), and many remain inactive. Still, for those that do engage with the streamer’s second-tier offerings, where linear ESPN’s primary live sports aren’t available, the platform proves that demand exists. 

ESPN+ showed that hungry fans will watch sports anywhere, but “left consumers wanting more in terms of live premium content,” Ryan Schreiber, founder and CEO of streaming aggregator Streamline, told Observer. In that way, ESPN+ served as a “soft launch” that revealed that “loyalty is shaped less by heritage than by habitual usability,” Lyric Mandell, Director of Media and Public Relations at MOXY Company, said. The platform helped the company understand audience behavior in an entirely new viewing environment that they controlled. Disney gathered comprehensive data on personalization preferences, consumption habits and price sensitivity.

Owning the direct-to-consumer relationship this way, instead of letting Comcast or Spectrum control it, provides invaluable data and user behavior insights. 

Sports streaming is getting “more expensive and messier.”

ESPN priced its service at $29.99 per month. Disney priced it high enough that cable providers don’t revolt over immediate cannibalization. But does the price prove too costly for price-conscious cord-cutters and cord-nevers? After all, this holds the distinction of being the most expensive monthly subscription among all the other prominent streamers. 

Schreiber thinks the bundle offer—in which $29.99 will include Disney+, Hulu and ESPN for new sign-ups in the first 12 months—will help convince consumers to hop aboard. That is admittedly a nice value. 

Mandell notes that sports content pricing represents “scarcity value in an age of digital abundance.” ESPN owns only so many major live sports broadcast rights and controls many marquee titles: Monday Night Football, some NBA, some NHL, some MLB (for one more season), UFC, various NCAA rights, etc. Any sports fan seeking access to major events likely needs ESPN. But the company doesn’t own all the sports rights. 

ESPN isn’t the sole broadcaster for the NFL, NBA, MLB, March Madness or the College Football Playoffs. Not by a long shot. ESPN alone will never host a Super Bowl (though corporate sibling network ABC will). To watch all sports from America’s Big Four leagues requires a waterfall of different subscriptions and payments. As Schreiber noted, “it’s all getting more expensive and messier.” 

Disney’s long game

ESPN executives aim to transform the brand into the go-to digital hub for all sports content, including competitors’. Think of how Roku, Apple and Amazon devices serve as the mechanism through which you subscribe to and engage with other apps. Becoming the tech backbone of the sports broadcast industry represents a wonderful ambition. This approach would simplify the user experience for you and me watching at home, which offers immense value. But the strategy may not be entirely realistic. 

“It feels pretty unlikely. I think we are just headed for more fragmentation,” Schreiber said. Mandell echoes this sentiment, noting that “platform convergence” of this scale requires negotiations of “not just rights, but semiotic space.” Other brands will demand their identities remain preserved and data firewalls maintained. Technical fluidity favors Netflix over Disney, and juggling that many agendas would challenge any corporate umbrella. 

Disney’s higher-ups know that this aggregation pipedream is unlikely to come to fruition. But converting the company’s brand power into digital engagement is crucial for its future as it evolves from pure storytelling to ecosystem building. 

ESPN serves as Disney’s “most immediate conduit to live cultural relevance,” Mandell said. The company doesn’t just want you to watch games and then sever your connection. It wants you to watch the NFL, play fantasy football, bet on the Washington Commanders through ESPN Bet, ingest analysis from its NFL reporters, buy merchandise, and live and breathe all on its own platform for as long as it can keep you. This transcends just sports entertainment. Disney pursues the goal of developing habitual lifestyle patterns. 

So, what does success look like for ESPN’s streaming future? Schreiber estimates that streaming ESPN can get 100 million subscribers in its first three years. In the medium term, or five years out, we’ll want to get a strong grasp of platform stickiness and integration into daily routines. Success will no longer depend solely on how many customers sign up, but on how long ESPN retains them and how long they remain on-platform. 

At the 10-year mark, “ESPN should aim to become a meta-platform, shaping the norms and logics of how live sports are accessed, discussed, and monetized,” Mandell said. This would represent a “symbolic dominance” that stretches beyond just revenue and subscriber figures. This is akin to Netflix’s position as the default streaming entertainment service. 

A new course for sports media

Live sports are the primary reason remaining pay-TV subscribers haven’t cut the cord. But the launch of ESPN and Fox’s upcoming streamer, Fox One, suggests that traditional pay-TV faces a more definitive end. However, whether streaming can truly replace the experience of TV is another question entirely. 

“Live sports continues to dominate television – from brands and advertisers to what audiences are showing up to consume on a live basis,” Raquel Braun, co-founder of media consulting agency Mulier Fortis, told Observer. “Therefore, one of the keys will be how frictionless of an experience can ESPN provide to sports fans – whether they’re current cable subscribers who want to access content via ESPN’s new service, ESPN+ users who want a more robust experience, or new customers who are looking for the best and deepest bench of sports content they can find in one place.”

By the same token, can streaming ESPN chart new courses in sports media? Visibility sets the conversational agenda at the national level. “With women’s sports drawing growing audiences but receiving just 15 percent of media coverage, ESPN has a chance to reshape what counts as central in the sports narrative,” Mandell noted. 

Make no mistake about it—ESPN’s transition represents a defining moment for sports media. ESPN’s move to streaming and its consequences will matter at the financial, corporate, consumer and cultural levels. The outcome will help decide who wins in the ongoing battle between the frictionless desires of audiences and the reality of market fragmentation. Whether ESPN can bridge this gap as a true epicenter of sports or whether we’re destined to scramble about to watch everything we want while being gouged by high costs remains to be seen.

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YouTube has made the major transition to the big TV screen -- from smaller digital screens (mobile, laptops and desktops). It now commands a leading 12.5% share of TV viewing time.

So... who is next?

Well, a lot depends on how well one’s algorithms are working, which is what YouTube has successfully done after 17 years in the business.

Analysts also say this is how Netflix -- after 25 years in the business -- made massive gains as the reigning premium streaming content leader, with strong program discovery and recommendation tools for consumers.

But what about up and comers? Michael Beach of State of the Screens thinks that high-profile digital-first, video-focused social media companies are still rising -- and that means primarily TikTok and Spotify.

“TikTok was born as a content recommendation company, and its algorithm is the best,” says Beach. The only downside, of course, comes with possible heavy regulation or a complete ban by U.S. regulators.

Spotify is another contender for the big screen -- and looks to keep pace with YouTube when it comes to video podcasts.

Farther down the list could be Facebook and Instagram. Longtime social media giant Facebook has tried to be a TV-like player but seemingly wants to stick more to its roots with mobile.

Beach believes it all comes down to personalization and program preferences -- essentially giving each family member their own channel.

With tens of thousands of pieces of premium video content, Netflix has done this well -- as has YouTube.

YouTube now gets the majority of its viewing usage on the big TV screen, says YouTube CEO Neal Mohan. But unlike Netflix, it didn’t come from the ability to watch a movie or a TV episode on the platform.

YouTube made a name for itself over the years with its short- to mid-size videos -- user-generated “creator” content.

Now YouTube expects even better results ahead, as a result of adding a mix from even shorter-length video -- maybe just a few seconds long, with its YouTube Shorts push -- to be factored into its program preferences results.

Netflix could be doing the same. Recently it said it is testing a new mobile-only video feed that would allow users to scroll through short clips from its original shows and films. This new feature works like Facebook Reels -- users can swipe through vertical videos.

While not leaving the big screen at all, we can believe that YouTube and Facebook want to tap into all the possible paths for video consumption.

The likes of TikTok, Spotify and a few others are very likely moving in the opposite direction -- looking to follow YouTube and Netflix with dreams of being on large living-room pixel machines.

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Beating the $100 CPM: How to keep your marketing effective and affordable

Welcome back to State of Play!

I never know how my work is going to perform. Pieces I think are going to be hits are often duds. Pieces I think will come and go and end up sticking around.

Today’s edition is one I feel is quite consequential, something I think I’ll be able to reference quite a bit down the line. I’m really excited about this one!

Check it out and let me know what you think.

Thanks for reading State of Play! Subscribe for free to receive new posts and support my work.

Media is fragmenting. Ad prices are rising. You need to change your strategy and you need to do it now.

I need to lead with that fact that this column was inspired by a recent edition of the excellent newsletter State of the Screens by Michael Beach. “$100 CPMs and the Future of TV Ad Prices” inspired me to write my take, and I’m going to borrow a few of Michael’s charts here. If you’re interested in the media ecosystem and how to advertise within it, you have to read State of the Screens.

It’s no secret that the old ways of reaching mass audiences are in decline. Television viewership is down dramatically, and even when people are watching, they’re watching all different shows in all different places. Track The Gauge and you’ll see these trends as clear as day.

As monoculture decreases, advertisers struggle to find ways to reach the individuals they want to reach. Demand for the limited amount of advertising that does reach mass audiences increases, and so do the prices.

As Michael Beach wrote in State of the Screens, this is a simple case of supply and demand. Even as streaming replaces broadcast and cable, the fact that streaming - even ad supported - has less ad inventory means there will be fewer opportunities to reach audiences.

Streamers continue to layer on features like contextual advertising and targeting by IP address, building their advertising capabilities and justifying their right to charge premiums over broadcast and cable. They also invite in local business who do not and would not advertise on cable or local TV, which casts too wide a net, but are happy to advertise on streaming with hyper-targeting layered in.

This means that the increase of ad prices is not just subject to run of the mill inflation. There are fewer ad slots. There are more advertisers. Efforts to reach premium audiences in premium places are going to cost a very pretty penny. Or, maybe better said, 10,000 pennies.

At first, it seems as though Brands will find an easy solution to this problem through the platforms. If YouTube, TikTok and Reels are the new TV, then simply adjust your spend accordingly. Shift it to the platforms. They have excellent targeting and virtually bottomless inventory, right?

The issue is, you run into far more noise on the platforms and many, many other advertisers. Plus, for all the changes that have happened to media consumption, ads on the platforms are just not as effective as ads on television. They don’t play long enough. It’s not a “lean back” environment. People do not particularly want to see ads in their feed. On TV it’s expected - especially when people elect to pay for advertising supported tiers of streaming services. Try as they may, other environments are just not the same.

If you’re not convinced, imagine yourself proposing to your CFO that you’re going to spend a TV size ad buy on social and social only. TikTok, YouTube, and Meta. No accompanying 30 second hero that will run during their favorite TV program. How did the pitch go for you, champ? Has the laughing stopped?

Here’s another thought experiment. Think of the last time you were scrolling through your social feeds or watching YouTube. Do you watch the ads you see? Do you linger on them? Do you click past them as fast as possible?

Lastly, the platforms have proven time and again that they are no friend to the advertiser. They will give you good results, but they’ll make you pay for it, and the rate you pay is going to increase substantially over time. Depending on who you’re trying to reach, you may already be seeing significantly higher CPMs on the platforms.

What is a Brand to do in such an environment? You must adapt. You must stop seeking to reignite the monoculture with a catch all buy and instead invest in a variety of niches that will return value to you over time. This will take more work up front, but it will ultimately give you more efficiency with a higher return on investment.

Instead of looking to all tier 1 advertising, you have to start to understand where your brand overlaps with high impact niches that have outsize influence. Find creators and personalities within these areas and begin to work with them, develop relationships, and partner so you can get in front of their audiences in a meaningful way. Take several second and third tier entities and work with them simultaneously.

Develop a campaign that can flex across different individual properties while still calling back to core tenets. Instead of seeking a large campaign with one large buy, flex into several and build them together.

The cost of doing business with these entities will be less from a dollars and cents perspective. You’ll pay with your time and consideration. You’ll also need to get into the weeds, understanding nuances that will be challenging to understand if you’re not familiar with the areas you might move into.

This is more than just hiring an agency. You need to look into these areas yourself. Spend time with the content and the branded segments. Read the comments. Then you will know who is a fit for you and who is not. This is how you’ll win. If you’re interested in reading an extended take on this, I wrote one for The Rebooting last year.

Also, be prepared for not everything to be a perfect fit. The method of gathering passionate niches together will mean you pay much lower rates for each of them. Some will deliver a really impressive ROI. Some will not. You’ll have to handle this strategy with some significant dynamic planning, finding what works and adjusting as you go.

However, doing this right will deliver massively positive network effects for you. Your partners will be authentically connected to your brand and deliver outsize impact. Their audiences will see you as more than just another brand. If you do this right, you’ll be a true, value-adding part of their experience. Partners with adjacent audiences will collaborate. You’ll establish a place in culture for yourself.

Again, let’s step back into our every day lives to test this theory. Think of your own media consumption habits. If you really want to scare yourself, think of the habits of people who are younger than you. What kinds of products do you like? Why? Where did you hear about them? Are you more interested in products when your favorite creators endorses them and it’s clear it’s a real endorsement, not just a #PaidPartnership?

This trend will continue. We will still gather around the TV for a few big events. The NFL. Some awards shows. Nathan Fielder’s next appearance on CNN. But these opportunities are fewer and farther between. They cost more and more and truthfully even their ability to perform - with the exception of the NFL - is in question.

Media is fragmenting and there are fewer opportunities to get in front of large audiences. Those that are left don’t provide a way to reach influential audiences authentically. You can’t do that with one sweeping ad buy. You have to begin to build your high impact niches. Now.

Your choices are to begin riding this new wave or to continue to pay higher and higher CPMs for less and less ideal situations. While the platforms might provide a brief reprieve here and there, a place to throw large amounts of money to gain scale quickly, no platform where brands spend advertising money is looking out for them first. You need partners. Real partners.

Why should you care?: It is a strategic necessity to look to improve the efficiency and effectiveness of your advertising model. To pivot from the traditional model into a new model of many medium sized partners who can deliver outsize impact. Begin your changes now, even if you do it a few hundred thousand dollars at a time, or suffer the consequences of a CFO scorned.

Have a great rest of your week!

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You might call it the Elon tax.

Some ad agency execs and consultants tell Business Insider they are begrudgingly advising clients to spend on Elon Musk's X.

Their attitude reflects a wider discomfort in the ad world.

Thirteen ad industry insiders who spoke with BI said they were bristling at the current state of play — namely that advertising on X seemed to be a cost of doing business in a politically charged era with Musk a central force in Donald Trump's White House.

Some of these insiders said they viewed spending on X as a type of insurance policy to avoid an advertiser being singled out publicly as a boycotter, sued, or saddled with some sort of regulatory scrutiny.

These insiders were a mix of marketers, agency executives, and consultants. Most of them asked for anonymity because of concerns about potential reprisals; their identities are known to BI.

On Tuesday, the research and advisory firm Forrester published a blog post that lambasted X while advising advertisers to spend on the platform to avoid potential repercussions. The analysts wrote that advertisers were "losing control of media choice" in the current political environment. They recommended advertisers "lean into non-binding advertising commitments with X" and increase spending gradually if X met specific goals.

Jay Pattisall, VP and principal analyst at Forrester, told BI that the firm heard less feedback than usual for a post weighing in on a hot industry topic.

"It's reflective of the business community at large not wanting to engage in controversy," Pattisall said. "The unique conditions of the moment and politics of the day make for the necessity to put these very common sense, practical pieces of advice out."

Some advertising agency insiders and consultants shared similar sentiments with BI.

"While Musk keeps the position he has, you just have to be a bit more careful," said an ad agency veteran of more than 20 years. "That's the reality."

"Until we get more legal guidance, keep setting aside that money," they added.

Fears of potential political reprisals for advertisers who spurn X got more credence recently with a report in The Wall Street Journal. Citing people with knowledge of the talks, the Journal reported that X CEO Linda Yaccarino and a lieutenant had pushed IPG to spend more money on X. IPG execs interpreted the message as a reminder that the Trump administration could impede a proposed merger with ad giant Omnicom, the Journal report said.

Several ad industry insiders said that if X really used these tactics, they felt it would amount to bullying.

"We do not make spending commitments on behalf of clients to any partner or platform, and decision-making authority always rests with the client," an IPG spokesperson said in a statement.

X and Yaccarino didn't respond to requests for comment.

Linda Yaccarino, the CEO of X, appeared in a recent Wall Street Journal report. Jerod Harris/Getty Images

While X has attracted advertisers, new and old, in recent months — including big names like Apple — its business doesn't seem to be booming. Marketing research company WARC estimates that X will pull in $1.96 billion in global ad revenue in 2025, down 11% from last year — and a steep fall from the $4.53 billion WARC estimated X generated in 2022, the year Musk acquired it (back when it was named Twitter). X is a private company and doesn't publicly share revenue figures.

X has not historically been a priority media buy because it doesn't provide the scale and performance that platforms like Meta and Google offer.

That said, X has a sizable audience that appeals to many advertisers, especially during high-engagement events like live sports or breaking news.

WPP CEO Mark Read, who runs one of the world's largest advertising holding companies, told the Financial Times that the company had seen more clients returning to X in recent months. He added that WPP was talking with X about how it could support the platform in communicating to advertisers that it is a safe venue to advertise on.

"The usage is definitely up and if you look at the impact that it has on world politics, you have to say it's powerful," Read said in an FT story published last week. "I think for some clients it's a good place to be."

Some advertisers are seeing a higher return on investment on X than in previous years, Michael Beach, CEO of the adtech company Cross Screen Media, told BI.

"Pre-Elon Musk, their adtech was so bad we moved spend away from Twitter," Beach said. "The technology has improved, and small advertisers understand that the inventory is undervalued versus other platforms."

Another top media buyer previously told BI that advertising money was increasingly being used to hedge against political risk — and often, these decisions were being made by the CEOs of big corporations versus the chief marketing officer.

Lou Paskalis, CEO of the marketing consultancy AJL Advisory, said this kind of fraught political situation makes the job of a CMO harder.

"If 10% of my ad budget has to be allocated" to risk mitigation, Paskalis said, "my CFO isn't going to reduce my business goals by 10% — he's simply going to say, you need to deliver your goals with the 90% of your budget that is investable 'rationally.'"

Musk's takeover of the platform in 2022 laid the groundwork for the current relationship between X and the ad industry.

A wave of advertisers pulled away from X over concerns about brand safety, ad performance, and the return of banned accounts.

But X didn't go down without a fight.

In August, X filed a lawsuit against several of its advertisers — such as Mars and CVS Health — accusing them of illegally conspiring to boycott the platform through their membership in a now-defunct industry initiative called the Global Alliance for Responsible Media. X has since added several more brands to that complaint as defendants, including Colgate, Lego, and Shell. Unilever was initially named as a defendant but reached an agreement with X — the terms of which weren't disclosed by either party — and was dropped from the suit in October. Unilever said X had committed to meeting its responsibility standards around brand safety and performance.

GARM shut down days after the X lawsuit was filed, saying it was a small nonprofit with limited resources. Its parent organization, the World Federation of Advertisers, has maintained that it plans to fight the suit and didn't contravene antitrust laws. The litigation is ongoing.

Jim Jordan, the chairman of the House Judiciary Committee, is also investigating whether advertisers' and agencies' participation with GARM led to conservative media, including X, being demonetized. In December, Jordan wrote to the CEOs of Omnicom and IPG, asking them to provide documents and reserve records regarding their GARM membership.

"Given that your company was a member of GARM from its inception and was also an active participant in GARM during its collusive activities, the proposed merger raises potential anticompetitive concerns," the letters read.

The legal developments — as well as Musk's political rise — have put marketers on high alert.

"I've never seen anything like this before in the history of our business," said a second advertising industry veteran speaking generally about the current political environment for advertisers.

But, they added, "You've got to play defense right now."

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Here’s the thing:

With the U.S. presidential race between Vice President Kamala Harris and former President Donald Trump in the final eight-week stretch, we can expect campaigns to begin spending big bucks in battleground states to reach those in the electorate with critical sway: swing voters.

What’s more, this election is shaping up to be the first one with a significant number of swing voters who can be reached through streaming. In fact, 73% of swing voters in battleground states are reachable with streaming TV ads, according to fresh data from ad analytics firm Cross Screen Media.

Data debrief:

The research captures party affiliation as well as battleground states. Pennsylvania boasts one of the largest shares of swing voters compared to other states who are more reachable on streaming (70%) than on linear TV (68%). And of the 11 key Pennsylvania media markets with the largest share of swing voters who only stream TV, Harrisburg tops the list at 25%.

Regarding battleground states with the largest share of swing voters who are streaming TV only, Arizona stands out with 34%; followed by Nevada (33%), Georgia (32%), Wisconsin (25%), Michigan (24%) and Pennsylvania (23%).

Meanwhile, overall, 60% of Republican voters and 68% of Democratic voters are reachable with streaming TV ads.

Why it matters:

All indicators point to an extremely close White House matchup, with many polls projecting a 50/50 result in November. Given that razor-thin margins could determine the outcome, shoring up swing votes is paramount, and some media strategists believe that digital spend is a sure way to tilt the balance.

“I think political consultants are finally moving away from broadcast and cable and toward digital,” said Alec Eskind, senior digital strategist at political agency AL Media Strategy, in an interview last month with The Current during the Democratic National Convention in Chicago. “You can use your resources more efficiently and I think you’re reaching more and different kinds of people,” he said.

EMarketer projects the 2024 election will be the most expensive political cycle of all time, at $12 billion across all media for all races, up from $9.6 billion in 2020. Additionally, The Trade Desk Intelligence predicts digital ad spend to increase 156% over 2020 levels to reach $3.46 billion. Of that amount, CTV investment is projected to see $1.9 billion in spend, compared to $1.08 billion in 2022.

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Lost in the hype and hoopla surrounding this summer’s big campaign events—the CNN debate in Atlanta, the Republican and Democratic conventions, tonight’s critical showdown in Philadelphia between Kamala Harris and Donald Trump—is the fact that fewer Americans than ever are tuning in. Back in July, around 50 million Americans watched Joe Biden sleepwalk to disaster during his debate against Trump. That’s a big number for the TV networks in 2024, sure, but that audience was noticeably smaller than the one that watched the first presidential debate between Biden and Trump back in 2020—by more than 20 million viewers. 

Convention viewership this year also saw declines compared to past cycles. Around 28 million people watched Trump and Harris deliver their acceptance speeches this summer at peak moments during the R.N.C. and D.N.C., according to Nielsen data. Those numbers, though, were about the same as the ratings for the ersatz Covid-era conventions in 2020, and drastically lower than convention viewership numbers from 2008, 2012, and 2016. Conventions used to be a blockbuster event for the networks. This year, about as many people tuned in to watch Sunday night’s NFL game between the Rams and Lions.

Despite the consequences and the historical plot twists, this election’s biggest news events are simply not penetrating the public consciousness nearly as much as we political addicts assume. In a survey of battleground state voters released Monday, the Democratic polling firm Blueprint found that swaths of swing voters hadn’t seen or heard anything about many of the topics that have dominated campaign news coverage. About 30 percent of voters, Blueprint discovered, either never watched or never heard a single thing about Harris and Trump’s convention speeches. 

That much-hyped Harris interview on CNN with Dana Bash? More than a third of swing state voters (34 percent) didn’t know it happened. More than half of voters (53 percent) haven’t seen or heard any of Trump’s many podcast interviews this year. Almost half of battleground state voters (43 percent) said they’ve never seen or heard a Harris meme on social media. As I wrote a few weeks back, TikTok gets a lot of press coverage. But TikTok, like Twitter, Is Not Real Life.

Monoculture Reveries

The explanation for all this isn’t surprising, especially if you’re a loyal reader of Puck: Viewership habits are changing faster than media companies can respond, and that’s doubly true of campaigns. Voters, of course, have been spending more time with their mobile screens than their television screens for years—even if some political operatives in Washington willfully pretend otherwise. But television habits are changing, too, making it even more difficult for political campaigns to get their messages out.

Yes, broadcast and cable television still dominate the political advertising industry, in part because media consultants continue to get rich off the TV game. But linear television is an antique. The average MSNBC viewer is 70 years old, while the average voter is 39 years old—and that voter has been shunning television for a decade, hiding from TV ads in the process. Cable and satellite television providers have lost more than 20 million U.S. subscribers since 2014, a trend that’s further accelerated in the last two years. Since the 2022 midterms, about 10 million Americans have snipped the cable cord (including me, thanks to last year’s Spectrum-Disney fight that prevented me from watching college football on ESPN). 

Those cord-cutting numbers don’t include the millions of younger Americans who’ve never even had a cable subscription and spend their TV time on platforms like Netflix and Hulu, or ad-supported streamers like Roku or Tubi. Streaming now reaches more Americans than linear television, according to Nielsen. Roku alone has a user base larger than the six biggest pay TV providers combined. 

Typically, the political knowledge gaps I mentioned above—a candidate’s plans, their opponent’s weaknesses—would be filled with paid advertising, the most important weapon a campaign has in its arsenal. But strategists at the Harris and Trump campaigns, along with their allied super PACs and 501(c)4s, are facing a conundrum as the 2024 race enters its final six weeks. The campaigns are blessed with ungodly sums of money, a historic amount of fundraising dollars they’re dumping into advertising in every key battleground state. But they’re also unleashing this avalanche of ads at a time when voters are more tuned out, diffuse, and harder to contact than ever before. Tens of millions of voters are simply unreachable with traditional television advertising. “The 2020s are the streaming decade, and the shift is well underway,” said Michael Beach, the C.E.O. of Cross Screen Media, a Republican audience-targeting firm that helps campaigns figure out where to spend their ad dollars. “It’s never been more challenging for campaigns to get a message in front of their target audience.”

More Money Than God

Democrats have been outspending Republicans on advertising since the campaign began, both on television and digital. That was true even before Harris joined the race and shattered all fundraising records, including the historic $361 million she raised in August, a sum that doubled Trump’s haul last month. According to National Media Insights, a G.O.P.-aligned media intelligence agency that tracks political ad spending, Harris and supporting groups have reserved more than $300 million in advertising nationally and in the battleground states between Labor Day and Election Day. Trump and his allies, meanwhile, have less than $200 million reserved. All told, that’s a head-spinning amount of money being deployed in a tight time window.

And a ton of it is getting wasted. Beach, an analytics junkie whom I’ve known since he worked on Mitt Romney’s campaign in 2012, gave me a peek at Cross Screen’s research on the 2024 battlegrounds and how campaign advertising in August reached viewers. In every single presidential battleground state, Republican and Democratic ads running on linear television are only reaching about half of swing voters, and even less in some states. Linear TV ads are somewhat more likely to penetrate in the Upper Midwest battlegrounds—Pennsylvania, Michigan, and Wisconsin—where residents tend to be older, whiter, and more likely to have cable. 

But in the Sunbelt—states with more transient residents and more voters of color—streaming is more prevalent. And large majorities of likely voters in those states are unreachable on linear television. For instance, according to Cross Screen data, 58 percent of likely voters in Arizona were left unreached by linear TV ads in August. In Georgia, it was 57 percent. In Nevada, it was 55 percent. “In every key state, streaming has now surpassed linear,” Beach told me. “And persuadable voters, who tend to be slightly younger than the average voter, more in their 40s than in their 50s, are more likely to be in the streaming group.” In Arizona, he told me, a combined 71 percent of likely voters are either in a streaming-only household or use some combination of streaming and broadcast to watch shows and live television. This year, only 15 percent of Arizona voters are exclusive to traditional television, a stat that would make Bill Paley roll over in his grave. On top of that, according to Cross Screen, 13 percent of likely voters in Arizona are unreachable via TV advertising. This is where texting, door-knocks, phone calls, or social media advertising come into play.   

Reaching voters with paid media is made even more difficult by the platforms themselves, which offer varied subscription tiers and sell ad inventory in different ways. The largest player in streaming, Netflix, has a relatively small ad-tier audience. But Amazon and Hulu have more significant ad-tier audiences. YouTube TV is a prime advertising target, especially for Future Forward USA Action, the main Harris super PAC. Tubi, Fox’s the free ad-supported streamer, has a larger viewership share in the U.S. than rivals like Peacock and Max. According to Parrot Analytics, and reporting by my pal Julia Alexander, about half of Tubi’s audience is under the age of 30. 

Of course, most big streamers give subscribers the option to pay to not see ads. In fact, most streaming households (62 percent) are ad-free. That creates yet another challenge for campaigns: More affluent Americans are more likely to vote. But those voters are also more likely to pony up to avoid seeing ads on their favorite platforms.

In the future, perhaps, the fracturing of American attention will mean that campaigns have to make some hard choices about where they allocate precious advertising money. But for now, with two months until Election Day, the Harris campaign is lucky to be sitting on a Scrooge McDuck-sized pile of dough. Hard choices can wait. In August, the campaign announced an innovative investment of more than $200 million in ad reservations across digital platforms—connected television, premium video, and audio—the largest investment in digital and streaming advertising ever. They’re running ads on Hulu, Roku, YouTube, Paramount, Spotify, Pandora, and elsewhere. The strategy, one Harris campaign aide told me, is simply “to be everywhere all the time.”

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Michael Beach, CEO of Cross Screen Media and author of “Screen Wars,” discusses the evolution of convergent TV advertising. He explains the shift from linear to streaming, audience-based planning, and the role data analytics plays in convergent TV. Michael also shares practical advice for maximizing reach and data-driven insights that point to the future of TV consumption. Valuable perspectives on navigating the changing landscape of video advertising and audience engagement.

Episode Transcript

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Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS:

Michael Beach: Broadband adoption was about five years ahead of streaming adoption. So when you became a broadband only household, you may go five years before you actually become a streaming household. And then once we pass a hundred million households five years ago that had streaming, now you can have a mass audience.

Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on marketing and advertising, produced weekly by Bigeye, a strategy-led, full-service creative agency, growing brands for clients globally. Hello, I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us. The media landscape continually evolves with new technologies and changing consumer behaviors, shaping how brands connect with consumers. One of the most significant shifts in recent years is the rise of convergent TV, which blends traditional linear television with digital streaming platforms. Understanding and leveraging this convergence is critical for advertisers aiming to capture increasingly fragmented viewer attention. Our guest today is an expert on this topic and has been at the forefront of the convergent TV revolution. Michael Beach is the Chief Executive Officer of Cross Screen Media, a marketing analytics and software company enabling marketers to plan, activate, and measure video advertising. Before establishing Cross Screen Media, Michael co-founded Targeted Victory, which became a dominant digital agency in politics with over 800 clients. In 2020, Michael launched Screen Wars Fund, an early-stage venture capital fund focused on the convergent TV industry. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising. In addition, Michael has contributed to The Wall Street Journal, the New York Times, CNBC, Bloomberg, and NPR’s Planet Money podcast. He’s also the author of a new book, Screen Wars: Win the Battle for Attention with Convergent TV. To discuss some of its key ideas, I’m delighted that Michael is joining us today from Washington, D.C. Michael, welcome to IN CLEAR FOCUS!

Michael Beach: Oh, thanks for having me.

Adrian Tennant: Well, first of all, for anyone unfamiliar with the term, can you define what convergent TV is?

Michael Beach: Yeah, it’s a great question. And in the use case of the book, we really focus just on any video that appears actually on a television screen. Obviously, there’s a wider kind of arena of video that is competing for attention. And that’s probably part of a broader story we’ll tell. But in the book, we really focused on linear TV and streaming TV as the two areas, because we look at those as being a substitute in kind of in direct competition for attention, as opposed to something like short-form video that maybe is adding time to overall media diet, but it’s not necessarily taking away from what we call television.

Adrian Tennant: You’ve been in this space as long as anybody. I’m curious, Michael, what led you to focus on convergent TV?

Michael Beach: Really, it started probably more than a dozen years ago when I co-founded an ad agency in the Washington, D.C. market that was focused on political and public affairs. And we were a digital native agency. And a lot of times a political organization would hire a linear buyer and then they would hire a digital buyer and then there’d be this kind of zero-sum argument for resources. And so we explored a lot to where, you know, initially, we just started to make an argument for why digital is better, but not necessarily understanding linear TV, you know, the reach and the frequency and all the things that make it unique. And so we really went to school on offering all of those as one thing together. And this is 2013, 2014. So a long time ago. And learned a lot in that process about what the trade-offs are and where and how people make decisions. You know, I started Cross Green Media in 2017 and went to the kind of the wider local advertising ecosystem and they had the exact same problem where they couldn’t figure out the mix between the two. And because one minute if you’re selling, you know, a car to truck and tenders, it’s one audience. If you’re trying to fill a movie theater, it’s another restaurant. And I think that’s where the light bulb went off for us that this one area is going to be a hundred billion dollar market when you combine streaming TV advertising and linear TV advertising. And nobody’s really getting it right because they’re kind of starting from wherever they’re most comfortable.

Adrian Tennant: As you mentioned, you founded Cross Screen Media in 2017 and are its CEO. What services do you offer, and what types of clients do you typically work with?

Michael Beach: We work through ad agencies and we have some media seller customers, but our bread and butter are local ad agencies who either are heavy on linear TV today or heavy on streaming, but want to offer both. And the idea for there to be convergence, like the consumer is converging, right? Like they are going from being a hundred percent linear a decade or so ago to eventually there will be a hundred percent streaming in terms of how they consume video. But right now we’re in this messy middle period. And the brand advertiser really just wants a solution to the problem, right? They want to get their ad in front of their targeted consumer. And that leads to our customer, who is the ad agency. They may be really strong in linear TV, but they don’t understand streaming, but they want to package it together. So they’ll use our media planning software. So it’s three components. There’s planning, there’s activations to the ability to actually buy streaming TV advertising. And then there’s the measurement component of it for measuring linear and streaming TV together at the local level. And then we also have some digital native agencies, which is kind of where we came from, that want to either offer linear TV advertising or at least communicate to their customers, okay, we know we went up on TV and ran an ad during Sunday Night Football. Here’s how we’re going to supplement it with streaming because of the people we missed. And that’s our bread and butter.

Adrian Tennant: For over seven years, you’ve been publishing a weekly newsletter focused on video advertising called State of the Screens. It’s one of my go-to resources for industry statistics, and I’m sure for many other people as well. Michael, what prompted you to write a book?

Michael Beach: Yeah, so we’re just over 375 editions of the newsletter now. And we’re probably just passing 250. So I’ve written every week for seven years. And the newsletter was amazing, because it allowed us to get our message out every week and in a rapidly changing environment. So new data would come out, you know, right now we’re in earnings season, Netflix posted earnings last week, and how many subscribers they have and all these statistics. So we’ll write a newsletter about what that means for the convergent TV advertising ecosystem. But the newsletter was very reactive. It was basically saying, this is what’s happened in the last three months or the last 12 months. And it was also very short. It’s on average less than 800 words a week. It takes between two to three minutes to read it, but we can’t really tell a bigger story. And so we wanted to go back and say, you know, here’s how we’ve gotten to the point where we are today. So we went all the way back to 1950 in the book and talked about how linear TV rose post-World War II. Then when cable came along, then when broadband came along, and now streaming is following broadband. And then the next part was, what does the future look like for an advertiser? How are people going to consume TV and how are we going to reach them? And then the third part of the book was really case studies and tactics for how to actually thrive in this new world.

Adrian Tennant: The first part of your book, Screen Wars, is titled How We Watch TV, in which, as you said, you describe the evolution of television, the proliferation of cable and then streaming services, and audiences’ changing viewing habits. Michael, for some context, how did the TV industry grow from just a handful of broadcast networks to the hundreds of niche cable channels and streaming platforms we have today?

Michael Beach: Yeah, that’s a great question. And I think when you look back on the nascent market, even when we all started to get black and white television and then cable television through the 1960s, the market still for advertising wasn’t that large. And so sustaining the three major broadcast networks, ABC, CBS, and NBC, that was a good business for the three of them. But as we got into the late 70s and early 1980s, the market had gotten large enough to where you could run a niche business and make a living. So that’s where HBO comes along, and ESPN, and the rise of cable television. The business model couldn’t have existed 20 years before, and the delivery mechanism didn’t also exist because you were limited in the number of broadcast channels. So cable TV rises up, and suddenly we go from having three stations till we get into the 90s, we have over 100. And still a great business, right? Because there’s enough to go around to make everybody whole and be, you know, extremely profitable business. Well, then streaming starts to pop up in the late 2000s. And again, early on very small business can’t really sustain anybody, even a Netflix. When they launch streaming, they’re still relying on their DVD rental business for a long time to generate cash flow for running the company, but adoption picks up. And then all of a sudden today, you can now run a streaming only business at scale. And so now Netflix is, you know, the largest media company in the world from a market capitalization standpoint, a larger than even like a Disney. And that’s because streaming now can sustain a whole business. And so now you’re starting to see, you know, a lot of networks pop up that are even focused on niche streaming. So we’re gonna have a sports only offering soon from, you know, ESPN and Warner Brothers and others, we’ve got kids only offerings. And we’re kind of this transition period where these media companies are still making most of their money off of linear TV. But there are streaming-only partners that are only in streaming. And soon, the traditional media partners, if all goes as planned, their streaming offerings will be profitable because that’s the future of their business.

Adrian Tennant: That’s interesting. That’s the business side of the equation. What impact have technological advancements like smart TVs and broadband internet had on consumers’ viewing habits?

Michael Beach: Yeah, so when we started Cross Screen Media in 2017, we looked back at the previous eight years when we were at the agency. And one of the interesting things, we dove headlong into mobile probably as early as 2009, 2010. But it seemed like every year for five or six years was the year of mobile, right? Like this is going to be the year of mobile, but it never arrived until it really hit in a big way. And so we started to look at what happened here? Like, well, you’ve got mobile phone adoption, and you’ve got this lag between when people actually get a smartphone. And when they start to consume content, then you’ve got another lag for when advertisers react and start to shift budget there. And why that was important is because we were looking at streaming. Well, what is this going to look like? Because we don’t want to be too early into streaming, but we knew it was coming. And so for us, we looked at broadband adoption was that broadband adoption was about five years ahead of streaming adoption. So when you became a broadband-only household, you may go five years before you actually become a streaming household. And then once we pass 100 million households five years ago that had streaming, now you can have a mass audience. So just people getting broadband in their homes alone was the initial limiting factor. But the other thing is that there’s no constraint on the amount of content. And that’s a new thing for the entertainment industry, that before you had your constraint with the three broadcast stations, and then you got cable, and you still had a limit on the number of cable channels that could get delivered to your house. Today you have no limit. And then if you’re a programmer before you had a 24-hour-a-day limit on, you know, you would program out a day, right? You only had one 8 p.m. slot, one 9 p.m. slot. Well, now we’re watching all of our content on demand. And so there’s unlimited shelf space. And so you’re seeing these streaming channels that have tens of thousands of shows more than you could ever watch in your lifetime because there is no constraint on the amount of time. So those two things, you know, the adoption of broadband and the elimination of any kind of constraint on the amount of content that we can you know, have access to are completely changing how we watch TV.

Adrian Tennant: Many years ago, I worked for the Discovery Channel. And of course, around this time of year, every year, it’s Shark Week. And that was really an event. Fast forward to today, it’s still an event. But somebody who’s really interested in sharks can pretty much watch sharks 24 seven if they want to.

Michael Beach: That’s right.

Adrian Tennant: Well, the second part of Screen Wars examines how TV advertising will work in the future. You discuss the current state of the convergent TV advertising market and anticipate strategic changes we’ll need to make in our media planning. What are the most significant challenges advertisers face when transitioning from linear to convergent TV advertising?

Michael Beach: I think they’ve got, especially if they’re coming from linear, they’re used to age and gender as the audience and the currency for how they buy advertising. And the shift to convergence, there is definitely age and gender as a kind of a bedrock, but the move to audiences is probably the biggest component that we see. And one thing that we do that’s unique is that Yes, we look at digital streaming and mobile video with audiences, but we also look at linear TV with audiences just to put them into as much of an apples-to-apples as we can. But then we’ll also look at digital with age and gender, because that might be data that we’re getting on linear to put that into an apples-to-apples comparison. But I think preparing for a world where you understand that your customer’s target is probably a lot smaller than you think. And if you just look at the number of people that buy There’s 120 million plus TV households, but the number one car, the Ford F-150, will sell 100,000 to 140,000 units in a year, and that’s the number one car. And so, you know, even a fraction of the audience, less than 1% of households on a given year will purchase the number one car, and you go down to the number 10 car, and it’s, you know, a fraction of that. That’s one thing we learned in politics when we started to look at who are the people are likely to vote in election that live in a battleground state that are a swing voter. We found that it was about three to 10% of adults fell into that audience in any given media market. And so why were we optimizing a plan for everyone who’s 35 plus or 55 plus or? 18 to 49 when we really just wanted to focus on those people and both with how we bought linear television and how we bought streaming. That’s the first hurdle. And then I think it’s really just having a long term plan because you don’t become what we call cross screen overnight. And so one of our frameworks is called the three phases of becoming cross screen. And the first phase is that you offer linear TV and streaming TV inside one company. So say it’s an agency, maybe you’ve got a team of people that do linear and a team of people that do streaming. So they’re not necessarily connected, but they’re under one roof. And then you go into phase two, where you actually start to get a team of people that can do both. So you’ve got still one person that has a skill set for linear TV planning and buying and measurement, one person that has streaming TV planning, buying and measurement, but they’re at least starting to compare plans and offer one media plan to the customer. The future phase three, which is where we kind of accelerate our customers into that market, is where the same person on your team understands both linear TV and streaming TV. And that is a data analytics and software problem. But once you reach that, you are truly offering conversion TV.

Adrian Tennant: Let’s take a short break. We’ll be right back after this message.

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Adrian Tennant: Welcome back. I’m talking with Michael Beach, the CEO of Cross Screen Media and the author of Screen Wars: Win the Battle for Attention with Convergent TV. You’ve spoken about the centrality of audience-based planning. The TV industry’s struggle to measure audiences amid these evolving viewing habits has seen new competitors like ComScore, VideoAmp, and iSpot.tv challenge longtime ratings provider Nielsen. Michael, where are we today? And how should advertisers leverage data analytics to optimize their ad campaigns?

Michael Beach: Yeah, that’s the multi-billion dollar question for the industry. And what we’ve kind of found is that there are really two worlds at once. And we talk about this a little bit in the book, but there is the kind of the New York upfronts, Super Bowl advertising, your top 200 brands that buy, 90% of national linear TV advertising. And then you’ve got the roughly 1 million video advertisers in the US that are mostly local, more niche, that prop up a service like Facebook or YouTube, but are becoming just as big of buyers as a group. And they behave totally differently. The group that does the upfronts, which kind of makes all the noise about measurement, they want to have a currency that both the buyer and the seller agree on. which has been a great for Nielsen. It’s still age and gender dominant. They don’t want to adopt a comScore or VideoAmp when the seller is using another service. They want both the agency and the seller to use the exact same currency, which is limiting how that market moves. And then you look at the market where we are in, you know, local, pretty much 100% of our customer base is audience-based advertising. even if the guarantee they’re getting from the TV station is age and gender, and they still want to plan against audiences. Why that matters is that it’s like the digital mindset is that the people that come from that world actually are not concerned with the buyer and the seller having the same data. If you tell one of our customers that they can get better data than the seller and have, you know, asymmetric information, have an advantage to where maybe the TV spot is getting priced on, you know, 18 to 49 year olds, And the rating thinks that 3% of the audience is 18 to 49 year olds. But we run our data and say, well, we’re trying to sell pickup trucks and 7.5% of the audience is actually pickup truck people. That’s actually an advantage for us. And so our customers are fine with that. That’s why they’ve adopted advanced currencies faster, and everything from set-top-bikes data to now ACR data, because it’s not a deal-breaker that the seller doesn’t use the exact same data. So those two worlds are kind of happening at the exact same time. In the trades, you really only read about the national problem, because it is the biggest part of the market. It’s by far the largest spend per advertiser. But where we are, it’s kind of like an inverted problem. We’re coming at it from a completely different angle.

Adrian Tennant: I think I heard you use an acronym there, ACR. What is that?

Michael Beach: Yeah, traditionally, you had panel-based measurement from Nielsen, where I think today they have 40,000 households where they are opt in, it’s extremely high quality, they were able to track all their viewership to the person level in the household. And that is great for a national advertiser. So you basically take ESPN at 8pm. the 40,000 households, they will get enough sample to tell you at the national level how many people are watching it. And they can even give you some more advanced demographics. The problem is when you break that down at the local level, so there’s 210 media markets across the country, you take that 40,000 sample and you divide it by 210, you now can only measure the largest things, the largest channels and the biggest demos. So you cannot do any kind of audience-based analysis And so what happened was, you know, this came out of politics as the primary driver in the 2012 campaign from President Obama’s campaign, taking set-top box data. So at that point, you had about 18 to 30 million households total that produced set-top box data. And you could use that as a sample to where all of a sudden you can start to measure cable at the local level, more niche broadcast local level. You can start to measure audiences at the local level. That was your first big data source. And then now ACR data has come along, and that is actually the smart TV itself producing viewership data, both streaming and linear consumption, and at a much more granular level. Think about every second you’re viewing is able to produce rather than just say a 15-minute increment or a 30-minute increment. Now people have adopted those currencies because they want to look at linear and streaming together when they’re producing measurements. Those are not in any kind of approved framework at the national level. So even if you read what just happened at the upfronts, people are using services like VideoAmp and iSpot, and they’re very successful companies, but they’re using them as a secondary measurement. Nielsen is still the primary measurement. At the local level and the more direct-to-consumer and kind of audience-based, They’ve adopted these currencies as a primary thing much faster than anything you’re seeing at the national level. Part of that’s that they don’t have a choice because they can’t measure their target audience at the local level using Nielsen.

Adrian Tennant: Got it. The third part of Screen Wars is titled Winning the Battle for Attention with Convergent TV. It focuses on strategies to capture and retain viewer attention and highlights the importance of adapting to changing viewer behaviors and preferences. Michael, we’re in a presidential election year. What are some key takeaways from political campaigns that can be applied to brands’ TV advertising?

Michael Beach: Yeah, there’s a couple of things. Again, political campaigns kind of adopted this more convergent TV earlier, and there’s probably two reasons. One, they are extremely audience-centric. I think everyone’s familiar with terms like swing voters and battleground states and all these things we hear on TV all the time. And the other thing is that they actually start over every two years. And so you get to start over, and essentially you don’t have to necessarily adopt the playbook that you ran during the election before. There is some carryover, but nothing like what you see if you’re a permanent organization that You did back-to-school planning last year, and you’re starting with the plan you did the year before. You’ll see these more radical leaps forward from political campaigns. The example I used about the 2012 election, even in 2010, we hadn’t even heard of set-top-box data at that point. And then two years later, it’s a major thing. And then by two years after that, All the big campaigns are using that same technology and a much faster adoption than you would see in the kind of the general advertising market. And then what they’re really good at is, again, understanding their audience and putting it at the center of their campaign. Right now, we are in a presidential election and people are trying to reach swing voters in four to seven states. Some estimates are it’s as low as 6% of the population of the country. is the target audience, they run a test-and-learn mentality. And so part of that is that you get rapid feedback from polling along the way to where you understand, are you moving this audience or not? And then you can, again, just change the plan along the way. Nothing is set in stone. And so we find people working political campaigns right now might be up until midnight, changing a plan that’s gonna start the next day. And you would never see that necessarily in a more traditional advertising format. And so the iteration is extremely fast. I think combining those two things is just a game-changer.

Adrian Tennant: How can planners at smaller independent agencies maximize the reach and frequency of campaigns across convergent TV platforms?

Michael Beach: Yeah, it’s a great opportunity for small brands and small agencies alike. It’s a huge opportunity because you still have a mispricing in the market today. Because even though a lot of the buzz is about streaming and 80% of what we write about in our newsletters about streaming, if you look at it from an audience-based perspective, it’s still relatively underpriced. And that is probably the most contentious thing that we talk about whenever we get on panels, is that we just think streaming is dramatically underpriced. And that’s really because, again, when you figure out who your target audience is, And you price against a linear spot and you realize, well, I ran to 100 people, but only six of them were my target. I mean, 94 of those people was not my target. That, you know, $10 CPM now is over $120 eCPM. And if you look at streaming where maybe you paid $40 or $50 for a CPM, what you thought was way overpriced. but they got it close to rate 50% of people with a target. All of a sudden the inventory looks completely different. And one thing for us is when we look at all of our media, social video, mobile video, and our planning environment when a new customer onboards, the most expensive thing they’re buying almost every single time is Facebook and Instagram. And so even though it’s highly targeted, it has a really high ECPM when you factor in any kind of attention. And they’re a lot of times paying more for that than they are for a linear TV ad to reach the right person, but they don’t really ever see that. And so that mispricing the market is actually an opportunity where we will see smaller brands actually go after that inventory first. rather than trying to fight for the most commonly bought program, trying to go to the NFL football or news, they may find the underpriced assets and build reach that way.

Adrian Tennant: You earlier characterized this moment in time as kind of “the messy middle.” Linear TV and streaming services coexist. When do we reach a tipping point? When do we move to streaming services being the majority?

Michael Beach: Yeah, that’s a great question. For us, the NFL media deal that goes into, I believe, 2032 right now is, when we talk about a decade out, there’s going to be significant linear TV advertising just because of that, because of how much of the audience is sports today versus 10 years ago. And that’s still the most profitable way to pay for these sports rights deals. After that, it’s anyone’s guess. You’ve just seen the NBA right now is closing off a media deal that’s more streaming than it was the last time, but still has significant coverage on Linear. So as long as there are sports that are on Linear, it will be in the plan until the end there. It’s all the other programs. Basically, scripted programming has gone almost entirely streaming. It’s virtually 100% on demand. Now, if it’s on linear, it’s, it’s through on demand. And then, you know, streaming is taken over. News has not really found a home yet on streaming. And that is probably from a societal standpoint, one of the biggest areas that kind of needs to get fixed because the business model to run news on linear only is starting to collapse because they can’t, you know, they’re losing subscribers on pay TV. They’re losing advertisers, but they haven’t yet found a way to deliver that 24-hour news through streaming in a profitable way. And then sports is still able to make tons of money through linear today. They haven’t had to figure out streaming yet. They’re able to move at a little slower pace, but scripted content has gone basically all streaming. And we think news is going the same direction, but they just have not figured out how to make money from it yet.

Adrian Tennant: That’s interesting. Well, we’ve talked about technological innovations driving the market in some respects. Do you foresee artificial intelligence and machine learning impacting TV advertising strategies in the future?

Michael Beach: Absolutely. I think that, you know, even if you look at our planning software, it runs a number of simulations at the same time to produce a plan. So it’s more kind of machine learning than artificial intelligence. But why that is important is that there are a huge number of combinations of a media plan that could deliver a similar result. And if you think about these more advanced AI models that could do that in even more granularity faster, we see that being a huge area for improvement. But it’s moving away from having, again, that spreadsheet where you know, well, I’m going to buy ESPN and I’m going to buy CNN and Fox News and the Golf Channel and CNBC. And then I’m going to go over and buy these specific programs. When you actually let the algorithms work, They pull in a lot of combinations of things that are counterintuitive, but are potentially underpriced inventory that has unique reach in the market. And I think that artificial intelligence could do that on steroids.

Adrian Tennant: It’s a fascinating prospect. The book’s been out for a few weeks now. What’s the reaction to it been?

Michael Beach: It’s been really positive for me. You know, even though I’ve written the newsletter so many times, putting a book out there is a pretty big to try to make a coherent argument in 100 plus pages. And I think I’ve gotten great feedback. I was overwhelmed with gratitude for the launch team. I think the number of people that proactively offered to help and help drive it to be number one on Amazon. I can’t really explain how positive experience that was. The day the publisher took the draft away from me and said we’ve got to go with it was also the second best day of the whole process because I would have modified that thing forever.

Adrian Tennant: It’s very different from writing a newsletter where you know it has a natural expiration date. The book is a little bit different.

Michael Beach: Yeah. And hopefully, I mean, we wrote it in years, uh, or decades really. And hopefully it’s got a little bit of staying power. And I think initially when I wrote it, we were going to overall attention for video and we were touching on social and we were touching on the metaverse and all these things that are competing for our time. And that was just kind of an unmanageable thing. Like that was going to be a 300 page book and we cut it down and said, we’re just going to focus on TV, which I’m extremely glad we did. And you know, no one has really said, well, I wish there was more about mobile. Even though I think that’s a big missing piece, you know, when we were an agency, we were responsible for everything, right? So, like, we had to think about social video and mobile and all these things, but that’s for a later date.

Adrian Tennant: Well, I look forward to seeing what book you write next, Michael.

Michael Beach: Absolutely. Thank you.

Adrian Tennant: If listeners want to learn more about your new book, Screen Wars, or about your work at Cross Screen Media, what’s the best way to contact you?

Michael Beach: Yeah, three websites. The first on the book would be screenwars.com. And that’s got a way to get ahold of me as the author, all the information about the book. We’ve got resources that you can download, there are 57 charts in the book. And we’ve got full-color versions that you can download as one file from our site. And then my personal site is michaelbeach.com which has a link to a podcast and newsletter and a bio about me. And then my day job at Cross Screen Media is at crossscreen.media.

Adrian Tennant: And we’ll include the links to those in the transcript for this episode. Michael, thank you very much for being our guest on IN CLEAR FOCUS.

Michael Beach: I’m grateful for your time. Thank you.

Adrian Tennant: Thanks again to my guest this week, Michael Beach, the author of Screen Wars: Win the Battle for Attention with Convergent TV. As always, you’ll find a complete transcript of our conversation with timestamps and links to the resources we discussed on the IN CLEAR FOCUS page at Bigeyeagency.com – just select ‘Insights’ from the menu. Thank you for listening to IN CLEAR FOCUS, produced by Big Eye. I’ve been your host, Adrian Tennant. Until next week, goodbye.

TIMESTAMPS

00:01: Promo for Bigeye’s Retail Revolution 

00:59: Introduction to Convergent TV

03:24: Defining Convergent TV

04:07: Michael Beach’s Background

05:25: Services Offered by Cross Screen Media

07:10: Transition from Weekly Newsletter to Writing a Book

08:49: Evolution of the TV Industry from Broadcast to Streaming

11:00: Impact of Technological Advancements on Viewing Habits

13:12: Challenges Advertisers Face in Transitioning to Convergent TV Advertising

16:09: Promo for Data Storytelling in Marketing

17:08: Audience Measurement Challenges and Leveraging Data Analytics in TV Advertising

22:02: Applying Political Campaign Strategies to TV Advertising

24:28: Maximizing Reach and Frequency in Convergent TV Advertising

26:04: Predictions on the Future of Linear and Streaming TV

28:04: Impact of Artificial Intelligence and Machine Learning on TV Advertising

30:35: Contact Information for Michael Beach and Conclusion

by Wayne Friedman , Staff Writer, June 21, 2024

With a little more than four months to go before the Presidential election, we wonder where and what kind of messaging will seek to move TV viewers who are also political voters.

One key element is the focus on so-called “swing” voters' use of TV-video platforms as a clue in what polls say will be a close election. All that might mean more political advertising dollars headed to streamers.

Cross Screen Media says those voters -- which also include "independent" voters -- are reachable on both streaming and linear TV (42%) and connected TV-only (31%).  

Both these categories are higher than for Republicans and Democratic voters. In particular 24% of Republican voters are reachable only by linear TV, with 16% “unreachable”--- the highest levels when compared to swing and Democrat voters.

Analysts talk about key groups including suburban women, young Gen-Zers, and Black voters as being prime targeted voting audiences. 

All that would suggest that a wide range of media platforms would be under consideration for political media platforms ready to ramp up after Labor Day.

But would that mean more social media, streaming platforms, or traditional linear TV outlets?  

Some might believe social media in particular might still be the source of misinformation and disinformation. And yet social media platforms are still heavily used by all U.S. consumers, around 60% use social media in some form on a semi-regular basis. 

Overall local TV will continue to get a big piece as voters still turn to live, linear TV news networks and stations during big political election seasons.

Industry estimates say linear TV political ad spending will still account for a great deal of spending. eMarketer says 57% ($7.06 billion) of all political ad spending ($12 billion) will go to linear TV.

In that linear TV bucket, much will continue to be driven by the local TV marketplace -- especially in those key swing states that include Arizona, Georgia, Michigan, Nevada, Pennsylvania, and Wisconsin.

Message-wise? We’ll probably see the obvious touchpoints.

For Biden: A strong -- but not perfect -- economy, and well as criticizing Trump for his 34 convictions of criminal intent. For Trump: Immigration issues, fewer regulations for business, and big tax cuts for business and everyone.

What platforms best to get those key voting groups will be tricky granular media exercise. Perhaps the key word here is what all digital and connected TV platforms have been touting as strong elements of their respective platforms ad performance: Engagement.

Click here to read the full article

From TV To Shining CTV

Political campaigns may (finally) be all in on streaming TV, Notus reports. And it’s terrible news for viewers hoping for a respite. 

During the 2020 election, MiQ analyzed broadcast TV data in Arizona to identify 82,000 homes that had yet to be exposed to cable TV political ads. These homes provided an incremental audience pool for the Biden campaign’s CTV outreach.

MiQ also analyzed CTV data in Pennsylvania to identify households bombarded with Trump campaign ads. The Biden campaign counter-programmed those households with its own ads. Some homes were served 163 pro-Trump ads and 73 pro-Biden ads, which demonstrates the intensity of the political CTV investments in swing states.

Other than a few outliers, such as Netflix, streaming platforms are happy to capitalize on the quadrennial windfall of political ad revenue. Roku aired 400 different political ad creatives during the first week of June.

While linear TV still collects more total political ad spend, digital video – led by CTV – is gaining ground fast. According to Cross Screen Media, digital video will receive 37% of political video ad budgets this year, compared to 27% in 2020.

Click here to read the full article

Political aide turned data guru Jesse Contario works in the shadows. His employer, MiQ, will never be mentioned at the end of a campaign ad, and it won’t show up on the disclosures campaigns must post to keep the public abreast of their work.

Yet Contario works with some of the biggest campaigns in the country — and his firm might know a lot about you. MiQ specializes in harvesting data, including for political campaigns, and it increasingly is pulling data from streaming TV to help campaigns hit viewers with the right messages at the right times.

To hear data experts tell it, the smart TV revolution was supercharged by COVID-19, when consumers stuck inside rushed to upgrade their televisions. Now, streaming television is quickly becoming instrumental to campaigning, promising politicians the ability to reach more voters and target them with highly specific ads.

“People are spending more time with streaming than broadcast or cable television,” Contario said. “And the user isn’t discerning between whether they’re watching broadcast TV or streaming. They’re sitting on the couch, watching ads on the big screen in their living room.”

But campaigns’ ability to peer into the television habits of voters alarms privacy advocates, who say voters are not properly informed about what’s on their television.

“Television now watches us more than we watch it,” said Jeff Chester, executive director of the nonprofit Center for Digital Democracy. “The same kinds of strategies used to track and target individuals in order to sell advertising popularized by Google and Meta have been purposely and deliberately exported to the television.”

Televisions that can stream platforms like Hulu or Max usually come loaded with technology that collects information on what viewers are watching, and buyers consent to have their viewing tracked when they open their new TV and click through terms of service agreements. Sometimes, data firms can connect those viewing habits to a voter’s phone or laptop via their IP address, promising a trove of information about an individual and the ability to track them across screens.

Other times, firms focus on dividing households into groups based on what they’re watching, how they use their TVs and how many campaign ads they’re seeing, which is a boon to political campaigns eager to target specific groups of voters. Connecting this data to voter files is increasingly a focus — a move that adds individual voting habits into the mix.

MiQ “is committed to setting and upholding the highest standards of ethics, transparency and respect for privacy” and “adheres to all federal and state regulations around political advertising disclosures,” as well as any disclosures required by platforms, Contario said. The company doesn’t “tie data to specific and identifiable individuals, they anonymize and aggregate their data.”

Campaigns have for decades poured a significant portion of their budgets into buying ads for broadcast and cable television, which was believed to be the best and most powerful way to advertise to voters. But television viewership is rapidly changing. Today, more than half of ads booked on traditional television go to target only 11% of swing voters, according to data collected by Cross Screen Media, an analytics firm started by GOP operative Michael Beach.

Cross Screen Media estimates that close to 40% of video advertising budgets — around $4.2 billion — will go to digital ads this cycle, up from about 27% four years ago.

Because MiQ is essentially a subcontractor hired by advertising firms, the campaigns that hire it don’t have to disclose the use of its services. The company has revealed a few of its clients after the fact, and they show how well-utilized new data analytics firms are: In recent years, MiQ worked to elect former Chicago Mayor Lori Lightfoot, Michigan Gov. Gretchen Whitmer and, in 2020, President Joe Biden.

During Biden’s first election, MiQ analyzed television viewership in Arizona in search of households that hadn’t been hit yet by broadcast advertising and identified 82,000 additional homes for the campaign to target with pro-Biden messaging on streaming and digital. The firm also trolled smart TVs in Pennsylvania to find households targeted with pro-Trump content, then helped the campaign hit back with pro-Biden ads of its own, according to a case study by MiQ.

“We saw that some households were exposed to a Trump ad 163 times,” the firm wrote. “We conquested those same households with Biden digital messaging at a frequency of 73 times to disrupt Trump’s TV messaging and counter it with Biden’s alternative message.”

MiQ isn’t the only service offering data analytics and targeting on streaming; firms on both the left and the right are trying to hone better ways to find and target voters, especially those who don’t watch traditional television.

“This cycle is probably the biggest inflection point we’ve had in media consumption, and just how fast everything’s happening with consumers switching from television to streaming,” said Tim Cameron, founder of the GOP ad-buying firm FlexPoint Media.

In some cases, ad services claim they can follow a single person from their television to their smartphone and even to digital billboards at bus stops. Smart televisions can also help campaigns show fewer ads to frequent viewers while hitting voters who watch less TV with extra doses of messaging.

As anyone who has been relentlessly clobbered with a single political ad while trying to stream a show can attest, the technology is not perfect. But it is rapidly growing more sophisticated, and both critics and many campaign operatives agree it should be more regulated.

“It’s about the ethics, the propriety and the subversion of autonomy that comes along with using data to covertly influence people’s opinion,” said Arielle Garcia, director of intelligence at the advertising watchdog group Check My Ads. “That’s not unique to streaming TV: It applies to any digital environment where that super-invasive targeting is available.”

While the Federal Communications Commission has certain rules that, for example, require television networks to give equal opportunity to run ads to both parties, ads run on streaming networks do not have a clear regulator despite most streaming services running political ads. (One exception is Netflix, which currently does not have a political ad business.)

Lawmakers have debated for years how to regulate digital ads but have failed to come to an agreement; streaming is presenting a host of new problems.

“Regulations that have been put in place around political advertising are completely outdated to our way of doing things,” said Patrick McHugh, partner at the digital media firm Gambit Strategies.

Roku and Google (the parent company of YouTube) voluntarily offer some disclosures of political ads run on their platforms. Roku alone had more than 400 different streaming ads running during the first week of June, according to its disclosures.

Biden’s campaign disclosed airing more than 30 different ads on Roku, including a first-person testimonial from a woman who had to leave her state to get an abortion after learning her fetus would have a fatal medical condition. Pro-Trump super PAC Make America Great Again Inc. aired an ad whose narrator said, “Whether it’s dishonesty or dementia, Biden’s failed.”

Streaming networks develop their own guidelines for what makes it on air, which became an issue during the 2022 midterms when Hulu, a subsidiary of Disney, declined to air Democratic ads focused on guns and abortion — major themes of Democrats’ campaigns. (Disney changed course after public complaints.)

Campaigns often don’t know what their opponents are running. Today, only private monitoring services like AdAnalytics keep tabs on the political ads going up on streaming platforms.

For all these reasons, traditional television will still suck up the majority of the money spent on ads this cycle. But as audiences grow more fragmented and even elderly viewers add streaming to their televisions, it’s unclear how much longer linear TV will dominate.

“It’s hard to even go prime time these days. What’s there?” said longtime ad maker Mark Longabaugh. “Thank goodness we still have ‘60 Minutes.’”

—

This story has been updated with addition comment from MiQ about the company’s practices.

Maggie Severns is a reporter at NOTUS.

Click here to read the full article

Great “Beach” Reading for CTV Ad Buyers & Sellers: After eight years and 360+ editions of the weekly “State of the Screens” newsletter, Michael Beach, CEO of Cross Screen Media, has released his first book, Screen Wars: Win the Battle for Attention with Convergent TV.

Screen Wars is the first-ever guide to survive and thrive through the complexities of convergent TV, and delves into the nuances of video advertising in an era where traditional boundaries have blurred.

With over a decade of expertise in TV and video advertising, Michael's unique perspective is rich with actionable strategies to navigate and capitalize on the opportunities within the convergent TV landscape.

The book is meant to help you “skate to where the puck is going to be” by covering three fundamental topics: 1) How we watch TV; 2) Winning the battle for attention with convergent TV; and 3) How TV advertising will work in the future.

Click here to read the full article

Click here to view the full agenda

Click here to view the full agenda

Apple: https://screenwa.rs/pwh
Spotify: https://screenwa.rs/lds

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2024 Media Highlights with Michael Beach

On Strategy Showcase · Episode

Spotify

Michael was recently featured in the Hollywood Reporter discussing ad-supported streaming:

Click here to read the full article

NBCUniversal, Disney and ViacomCBS, along with tech giants like Amazon, are shifting resources to snap up live programming from major leagues in a new arms race to fuel direct-to-consumer services.

Before NBCUniversal’s Olympic coverage was beamed to its Peacock app, it passed through the streamer’s digital network operations center. The Peacock DNOC, as it’s called, sits in a far corner of NBC Sports’ headquarters in Stamford, Connecticut, with a wall of monitors at the front of the glass-encased room and a two-story window overlooking oversized Olympic rings in the parking lot outside. Rows of desks are stacked with Rokus and Xboxes and PlayStations and Fire TVs, with technical staff making sure the live connection is working on every conceivable device and TV.

Peacock, led by chairman, direct-to-consumer and international Matt Strauss, is NBCU’s big bet on streaming, and it is hoping that live sports will drive users and subscribers. For the Tokyo Games, the company made gymnastics and track and field coverage exclusive and free to Peacock, and men’s basketball exclusive to the paid tier of the service. The Peacock DNOC may as well be a visual representation of that bet.

“This didn’t exist a year and a half ago,” says NBC Sports vp engineering Tim Canary, giving a tour of the space to The Hollywood Reporter in late July. Two years ago, the area was filled with regular office desks and cubicles, but when NBCU decided it needed to go all in on streaming, and that sports would be a cornerstone of the strategy, the space was repurposed into Peacock’s sports hub. While it is too soon to know for sure if Peacock’s Olympic bet has paid off, there are early signs it may be working.

According to research from Antenna Data, the Olympics were the biggest paid signup-driving event for the service so far, driving 151 percent more paid signups than The Office, 108 percent more than the WWE’s WrestleMania and 50 percent more than the film Boss Baby: Family Business. NBCU says that users have streamed more than 4.3 billion minutes of coverage (including on NBC Sports’ website and app), and that the games marked the “best two weeks of usage” in Peacock’s history.

As every major entertainment and media company goes all in on streaming in a bid to dethrone Netflix, they are seeking exclusive content that can drive new subscriptions and make their services a must-have. For Peacock, it’s the Olympics and WWE; for ESPN+, it’s a full suite of sports and UFC premium events; and for Paramount+, it’s March Madness and the Masters.

But with new sports rights becoming a scarce commodity, these same companies are trying to figure out how to make the most of what they already have, trying to get ahead of a pay-TV business in continued decline.

“I think at the moment, everyone is looking at streaming as supplemental to the linear television experience, but five years down the road or three years or 10 years, whenever Disney decides that ESPN+ is a replacement for ESPN … then the bundle falls apart,” says S&P Global senior director Naveen Sarma.

When it comes to streaming sports, Disney has the most mature offering. ESPN+ launched in 2018, featuring leftovers from the company’s bucket of rights packages and a few new deals for smaller sports. But the strategy has changed, and now the company pursues streaming rights alongside all major deals.

As Disney CEO Bob Chapek told a JPMorgan conference May 24, “that flexibility for us as we need to pivot towards a direct-to-consumer ESPN+ platform has been an important component that we insist upon for each one of these deals.”

“When the time is right to really stomp on the gas and go even stronger into our direct-to-consumer platforms for sports, we’ll do that,” Chapek added.

JPMorgan, in a June report about the streaming service, estimated that a premium ESPN+ tier based on the linear channels could reach 15-25 million subscribers at a price point of $15-$25, and that it thinks “fall of 2023 provides an entry point for more sports to be made available DTC given the new NFL agreement and potentially other deals.”

And Disney hasn’t limited its sports streaming aspirations to ESPN+. Its recent deal with the NHL includes 75 games that also will stream on Hulu.

ViacomCBS’ Paramount+, meanwhile, has leaned on CBS’ suite of sports deals, most notably college basketball, the NFL and golf tournaments like the Masters, while adding new soccer and combat sports rights along the way.

Even HBO Max may get into the game, with WarnerMedia news and sports chief Jeff Zucker suggesting NHL games could find their way to the service as part of a newly signed deal with Turner Sports “as the consumer continues to skate to where the puck is.”

And while Netflix remains focused on an ad-free model, most other streaming competitors are embracing ad-supported options.

Sports are a key strategic foothold for ad-supported streaming, because unlike entertainment options, which are either ad-free or ad-light (HBO Max and Peacock each have fewer than 5 minutes of ads per hour, compared to more than 15 minutes on linear TV), they can keep their existing ad loads, which are tucked into breaks in the action, Cross Screen Media CEO Michael Beach says.

“Advertisers are, at the national level, are willing to pay more for sports than just about anything else advertising-wise,” Beach adds.

Even regional sports networks, which air NBA and MLB teams like the Yankees, Dallas Mavericks and Miami Heat, are thinking about streaming. Sinclair Broadcast Group’s RSN holding company, Diamond Sports, is planning an entry into the market. According to an internal presentation the company prepared for potential lenders, “Project Active,” as the streaming effort is called, is built around “gamification,” “sports betting” and “community engagement.” The offering would have multiple tiers, from a free, ad-supported tier built around highlights to a full-suite offering with live games “untethered from the pay-TV ecosystem.”

Sinclair CEO Chris Ripley referred to the company’s plans as “a metaverse or marketplace, where we can serve up a more personalized and optimized experience for the viewer,” during the company’s quarterly earnings call Aug. 4, turning to a buzzword recently trotted out by Facebook and Microsoft. But the strategic undercurrent remains the same: streaming video, with some gaming and betting layered on top.

Still, the future of live sports on streaming revolves around rights and that direct-to-consumer relationship. And whenever a rare rights opportunity arises, there is interest. In Idaho the week after July 4, the investment bank Allen & Co. constructed an outdoor pavilion at the Sun Valley Resort for attendees of its annual mogul-filled conference. Billionaires, world leaders and top executives mingled in the setting, moving from table to table. According to someone familiar with the scene, NFL commissioner Roger Goodell and New England Patriots owner Bob Kraft made the rounds, asking various attendees (including Apple leaders Tim Cook and Eddy Cue and ViacomCBS chair Shari Redstone) whether there was interest in its NFL Sunday Ticket out-of-market streaming package and its NFL Media assets.

Sunday Ticket, which DirecTV has offered exclusively since 1994, is one of the few major sports rights set to become available in the coming months. ESPN chief Jimmy Pitaro has said his company has had “exploratory conversations” with the league about it (likely as an ESPN+ add-on, a la UFC), but the league is trying to bring in tech giants and other media companies as well, hence the meetings at Sun Valley.

But what happens if the leagues decide to cut out their media partners in the future? “Does the NFL want Apple or somebody to pay the premium they are looking for and bake it into their $5-per-month package? Or do they want Apple to buy it and charge $200 a year or whatever the Sunday Ticket incremental cost was before?” Beach says. “For me, it is a total trial balloon for the league [eventually] going to direct-to-consumer.”

Michael was recently featured in the Hollywood Reporter discussing the digital advertising ecosystem:

Click here to read the full article

NBCUniversal views the Games’ yearlong delay as "an advantage" since it now knows the platform’s user base, but even with a "big event" boost it has a long way to go to catch up to rivals.

One of the most anticipated events at the Tokyo Olympics, at least for U.S. viewers, will be women’s gymnastics, with Simone Biles looking to add to her 2016 haul of four gold medals. But if Americans want to watch Biles live, they will have to do so on NBCUniversal streamer Peacock.

NBC is betting that Biles and the rest of the U.S. gymnastics team, as well as the track and field teams and the men’s basketball team, can help Peacock rack up subscribers as athletes keep racking up medals, making live coverage of those events exclusive to the streaming service. “The plan was [for the Olympics] to be part of our launch platform a year ago. That obviously didn’t work out,” Mark Lazarus, chairman of NBCUniversal television and streaming, tells The Hollywood Reporter, adding that the company now looks at the delay “as an advantage.”

He continues, “We have a lot more knowledge about what is working and what is not working on Peacock. We were really flying blind a year ago; now we have a lot more data on our users, we know a lot more about them, and hopefully we can serve them better.”

Hence the move to exclusive live coverage of these key events, paired with exclusive streaming studio segments that are quirky and funny, as opposed to the more serious traditional TV broadcasts. And the time is right for a reset. In April, Comcast reported that Peacock had 42 million “signups,” though according to Bloomberg that translated into about 14 million monthly users and some 3 million paying subscribers (some users get Peacock’s premium tier for free through their pay TV provider).

Those figures would place Peacock far behind streaming leaders like Netflix (200 million subscribers), Disney+ (104 million) and Amazon Prime Video (“over 175 million,” per Amazon), and even smaller competitors like Paramount+ (combined with Showtime, 36 million subscribers). Of course, with Peacock’s strategy of a free base tier and focus on advertising, the company is in many ways pursuing a different model than most of its competitors, which rely more heavily on subscription revenue, and don’t offer free tiers.

“I think what we have seen with all of the streaming services so far is that you need some kind of a big event to drive people to sign up,” says Naveen Sarma, senior director at S&P Global. “Those ‘must-see’ events do drive people to subscribe,” Sarma adds. “What we saw in the last year or so with both HBO Max and Peacock is that they were missing these because of the pandemic.”

The Olympics also present an opportunity for NBCUniversal to bring new advertisers into its digital advertising ecosystem, a critical strategic focus for every major media and entertainment company. “It will be interesting to see how their team executes on it. Will they be able to fill all that inventory? Is it all package deals with TV? Or are they going out beyond the 200 biggest national TV advertisers and really growing the base?” wonders Michael Beach, CEO of marketing analytics firm Cross Screen Media. NBCUniversal says that Peacock secured more than $500 million in upfront commitments this year, with movie studios, technology, travel, financial services and pharmaceuticals among the biggest category buyers.

A year and a half ago, in January 2020, inside 30 Rock’s Studio 8H (the home of Saturday Night Live), NBCUniversal executives first unveiled Peacock to the world. Matt Strauss, chairman of Peacock and the company’s direct-to-consumer efforts, said they wanted to “give a pulse to the world of streaming,” one that was “timely and current” with the addition of NBC News and sports programming alongside a slate of original shows and library fare.

Then the pandemic hit, delaying production on originals and postponing the Olympics. Without that tentpole fare, Peacock leaned on its library of The Office, which aired its series finale eight years ago, hoping that the show’s success on Netflix would translate to new subscribers for Peacock. It also struck a deal with the WWE to merge WWE Network into its offering.

In June 2021, many of those same NBCUniversal executives once again gathered in Studio 8H, this time for a much smaller crowd, and with a more understated message. With production in full swing, the company is hoping it can make up for lost time.

For the Olympics do-over, Peacock will be more freewheeling and raw, with live coverage (mostly in the early mornings because of the time zone differences, with almost all events available for in-demand viewing after they air on TV or stream) as well as studio shows and original programming that skews toward the offbeat.

Stateside, Kevin Hart and Snoop Dogg will front a recap series reacting to highlights with quips. One of the signature shows, Tokyo Tonight, will be co-hosted by Cari Champion and Kenny Mayne. On Her Turf will focus exclusively on women’s sports.

Amber Ruffin, who hosts an eponymous late night show for Peacock, will be on the ground. “We’re going to take a lot of those elements, sketches and that silliness, and we’re going to take it to Tokyo,” Ruffin says.

The strategy “allows us to cater to the super fan with everything streaming all the time, but then you can come over to the network in primetime and get a highly curated show with the most popular sports,” says Molly Solomon, executive producer and president of NBC Olympics production. “Our job is to pick the best platform for each piece of content,” adds Lazarus.

Hence the decision to make those key sports live only on Peacock. But it’s also, in the words of Strauss, an “opportunity to learn.” Critically, while gymnastics and track and field will be free and entirely ad-supported, the basketball games will be exclusive to Peacock’s premium tier, which costs $5 a month.

If Biles and the gymnastics team are meant to get users in the door, then Kevin Durant and the basketball schedule are meant to get them to open their wallets. But once the medals have been awarded and the Olympic torch has been extinguished at the closing ceremonies, Peacock’s real challenge will begin.

For a service with global ambitions, the streaming wars are like a decathlon, with breadth just as important as depth — and, as in a marathon, a long-game strategy is more important than a fast start. “It is a question for everybody: You need to constantly provide justification for people to use your service,” Sarma says. “Peacock is going to have an opportunity to have a lot of new subscribers take a look at it. Can they keep them after the Olympics ends?”