The Digiday Podcast: A Postmortem on This Year’s TV and Streaming Upfront Ad Market with UM Worldwide’s Marcy Greenberger

Release Date: October 15, 2024
Host/Author: Digiday
Episode Title: A postmortem on this year’s TV and streaming upfront ad market with UM Worldwide’s Marcy Greenberger

1. Introduction to the Episode

The episode begins with hosts Kimiko McCoy and Tim Peterson setting the stage for an in-depth discussion on the current state of the advertising market, particularly focusing on the TV and streaming upfronts. They touch upon the recent Advertising Week, retail media trends, and the significant legal developments affecting major players like Google.

2. Recap of Advertising Week

Kimiko McCoy ([00:17] to [01:35]):
Kimiko provides an overview of Advertising Week, highlighting key topics such as the balance between performance marketing and brand storytelling, the persistent hype around retail media, and the ongoing conversations about how advertising dollars are being allocated. She mentions her recent story on the tension between performance and brand initiatives, emphasizing the increasing demand for creativity in a crowded digital ecosystem.

Tim Peterson ([02:50] to [04:02]):
Tim connects these themes to the episode's interview with Marcy Greenberger, noting that the emphasis on creativity aligns with the broader industry discussions. He reflects on how creative advertising can mitigate ad fatigue among consumers, citing classic campaigns like Budweiser's frogs as examples of enduring creative success.

3. Retail Media: Growth and Challenges

Kimiko McCoy ([06:05] to [08:23]):
Kimiko delves into the surge of retail media networks, mentioning major players like PayPal, Chase Bank, and Belk. She discusses the competition within the space, noting that while PayPal's venture into retail media, led by former Uber Ads executive Mark Grether, shows promise, many retail media networks face challenges in scaling and sustaining their operations. Kimiko highlights the disparity between "haves" and "have-nots" in the ability to manage retail media effectively, emphasizing issues like data management and proprietary technology.

Tim Peterson ([10:29] to [12:41]):
Tim elaborates on advertisers' growing frustrations with retail media networks, pointing out the "data tax" inherent in paying for shopper data. He draws parallels to Hollywood producers, suggesting that advertisers are increasingly concerned about the return on investment and the transparency of pricing within these networks.

4. U.S. Justice Department's Antitrust Case Against Google

Tim Peterson ([12:46] to [14:10]):
Tim shifts the conversation to a significant development: the U.S. Justice Department's threat to break up Google, particularly its search business. He expresses uncertainty about the specifics of the breakup but speculates on potential outcomes, such as splitting search, Chrome, and Android into separate entities or restricting Google's ability to make default search engine agreements.

Kimiko McCoy ([14:10] to [14:54]):
Kimiko adds that Google's challenges are compounded by emerging competitors in AI-powered search and pressures from social media platforms vying for search dollars. She underscores the multifaceted threats Google faces, both from legal actions and market competition.

5. Interview with Marcy Greenberger: Analyzing the Upfront Market

Introduction to Marcy Greenberger ([15:46] to [16:37]):
Tim introduces Marcy Greenberger, Chief Investment Officer at UM Worldwide, aiming to unpack the nuances of this year’s upfront market. He notes that while the upfront seemed quieter compared to previous years, Marcy provides insights from an insider's perspective.

Market Slowdown and Reset in Digital Video ([16:37] to [17:38]):
Marcy describes the upfront market as a continuation of a slow, buyer’s market, emphasizing a significant reset in digital video pricing. She attributes this to an oversupply from new entrants like Amazon Prime and changes in consumer subscription behaviors, leading publishers to adjust pricing to attract advertisers.

"There was really a reset year from a digital video standpoint... [17:38]" – Marcy Greenberger

Impact of Pricing on Streaming Ad Spend ([17:38] to [18:49]):
Marcy explains that while pricing has reset, the overall spend on streaming ads continues due to increased volume and the presence of new supply. However, she anticipates that further pricing reductions may be limited as the market stabilizes.

Current Streaming Price Points ([19:48] to [21:12]):
Discussing price points, Marcy notes that more established platforms maintain mid-teens CPM rates, whereas newer entrants may charge between $20-$30 CPM. She reveals that UM Worldwide successfully negotiated most streaming CPMs below $30, emphasizing volume as a key negotiation lever.

"The bulk are under that $30 threshold at this point." [20:19] – Marcy Greenberger

Client Commitments and Flexibility ([22:05] to [24:23]):
Marcy highlights improved flexibility in upfront commitments, allowing clients to adjust their ad spend without hefty premiums. She explains that deals are often structured at the agency level, offering clients the ability to fluidly commit based on agency forecasts. This approach mitigates risks for both agencies and advertisers, ensuring sustained relationships even in a soft market.

Pros and Cons of Agency vs. Client-Level Deals ([24:35] to [25:57]):
Exploring the dynamics of agency-level versus client-level deals, Marcy outlines the risks and benefits. Agency deals offer broader flexibility and reduced individual client risk, while client-specific deals can secure better pricing and tailored benefits for high-spend advertisers.

"Doing it at an agency level, you have to sort of take a risk in assuming that the client dollars will be there." [25:31] – Marcy Greenberger

6. Sports Advertising: A Robust Segment

Changes in Sports Upfronts ([26:56] to [28:09]):
Marcy discusses how sports advertising continues to perform strongly, particularly the NFL, which maintains high demand and scarcity in the scatter marketplace. She notes that networks enforced strict upfront deadlines, accelerating the transition to scatter buys, and enhancing the value for advertisers who secured inventory early.

Growth in Non-Football Sports ([28:09] to [29:46]):
Marcy points out the rising prominence of women's sports, such as the WNBA and National Women's Soccer League, which are garnering higher ratings and securing lucrative media rights deals. This growth is creating new opportunities for advertisers who invest early in these expanding markets.

Traditional Sponsorships vs. Ad Spots ([30:24] to [30:55]):
While meaningful advertising presence in sports often requires sponsorships, Marcy notes that many advertisers still opt for traditional ad spots, such as 15-30 second commercials, to maintain visibility without full sponsorship commitments.

7. Digital Video and Measurement Challenges

YouTube's Market Position ([33:02] to [34:09]):
Marcy observes that YouTube remains a dominant player in the online video upfronts, maintaining its unique role compared to other short-form platforms. She discusses the evolving nature of YouTube inventory, including large-screen viewing and new products like Sunday Ticket, which may drive future growth.

Budget Allocation for CTV and Linear TV ([34:55] to [36:13]):
Marcy explains that advertisers are increasingly adopting a holistic approach, starting with an overarching strategy that includes both linear TV and Connected TV (CTV). However, as campaigns are activated, budgets are often segregated to optimize across different platforms, enabling better frequency management and performance tracking.

Measurement and Multi-Currency Challenges ([37:07] to [40:31]):
The conversation shifts to measurement complexities, particularly the Paramount-Nielsen standoff. Marcy highlights that Nielsen remains the primary currency in upfront deals, despite efforts to introduce new big data products. The lack of readiness and difficulty in translating between old and new measurement currencies have hindered widespread adoption. Additionally, the costs associated with new measurement tools are likely to impact sellers more than buyers, as agencies typically cannot pass these costs directly to advertisers.

8. Future Outlook and Q4 Developments

Marcy Greenberger's Predictions ([40:52] to [42:27]):
Looking ahead, Marcy anticipates continued strength in sports advertising, especially NFL, driven by robust viewership and growth in linear TV markets. She expects the entertainment segment to remain softer due to excess supply and fluctuating demand. In the streaming domain, Marcy foresees ongoing evolution in ad innovation, targeting, and consolidation of inventory across platforms, enhancing both advertiser and consumer experiences. She also notes an increased responsibility for content leads to manage both primetime and streaming content cohesively.

9. Conclusion

Tim Peterson ([42:27] to [42:47]): Tim wraps up the interview by expressing gratitude to Marcy for her insightful analysis, noting that listeners now have a clearer understanding of the current upfront landscape and its implications for the advertising market.

Final Remarks ([42:47] to End):
Kimiko and Tim encourage listeners to subscribe and leave reviews, directing them to Digiday’s resources for more information.

Notable Quotes

• Kimiko McCoy ([04:02]):
  "We've got to do more brand storytelling and initiatives without having more money to be able to do it. So I think it forces creativity to kind of come back into the picture."

• Marcy Greenberger ([17:38]):
  "The biggest shift or change this year is it was really a reset year from a digital video standpoint."

• Marcy Greenberger ([20:19]):
  "The bulk are under that $30 threshold at this point."

• Marcy Greenberger ([25:31]):
  "Doing it at an agency level, you have to sort of take a risk in assuming that the client dollars will be there."

• Marcy Greenberger ([40:52]):
  "I think sports is going to continue to be a robust marketplace as Q4 progresses."

Key Takeaways

1. Market Reset: This year's upfront cycle saw a significant reset in digital video pricing due to increased supply from new entrants, benefiting advertisers with more favorable pricing.

2. Retail Media Saturation: The proliferation of retail media networks presents both opportunities and challenges, with data management and pricing transparency being major concerns for advertisers.

3. Legal and Competitive Pressures on Google: The U.S. Justice Department's antitrust actions against Google, combined with rising competition in AI-powered search, threaten Google's market dominance.

4. Sports Advertising Remains Strong: Sports, particularly the NFL and emerging women's sports leagues, continue to be lucrative segments in the advertising market, driving sustained demand and high CPMs.

5. Measurement Challenges: The industry faces ongoing hurdles in adopting new measurement currencies beyond Nielsen, impacting how advertisers evaluate and optimize their ad spend.

6. Holistic Budget Strategies: Advertisers are moving towards holistic strategies that integrate linear TV and CTV, though budget allocation becomes more segmented during campaign activation for optimization purposes.

7. Future Innovations in Streaming: The streaming sector is expected to evolve with continued focus on ad innovation, targeting capabilities, and inventory consolidation, enhancing value for advertisers.

This comprehensive summary encapsulates the episode's discussions, providing listeners with valuable insights into the current state and future trajectory of the TV and streaming upfront ad market.