30 MAR 2021
Continued restrictions on our way of life set challenges for global and regional advertisers. Nick Slaymaker, Global Chief Investment Officer at MediaCom, explains how to spot today’s opportunities.
The first thing you should know is that even after a year of COVID, there are no easy answers. The different phases of national lockdowns and opening up, combined with a range of government-powered economic interventions around the world, make it harder to spot broad themes and simple wins for advertisers.
That, of course, doesn’t mean you can’t find great investment opportunities - it’s just that there are no simple lessons that can be applied globally or regionally. I believe the real opportunity lies around continuing to invest for the long-term, while also retaining flexibility to take advantage of short-term tactical opportunities.
However, even short-term deals can be played to a longer-term advantage. If you can commit to a media owner that is struggling in a way that clearly benefits their bottom line and gives them a degree of certainty, then it could help construct a mutually beneficial relationship for the future.
One aspect of lockdown is the increased time we’re all spending on social media. The big success of the last few years has been TikTok, which has grown to 888m monthly users. As a platform, it’s rapidly increased its engagement with our business and now has the capacity to partner at scale in the same manner as the likes of Google and Facebook.
Again, this could be a moment to cultivate a long-term relationship, always remembering that investment will only be fully optimised where content fits with the culture and ethos of the platform.
Rush to digital content
We also need to be mindful of longer-term trends. It’s a cliché but the pandemic has accelerated the rush to digital content. From a media consumption point of view, we see huge increases in all media consumed in home with gaming and streaming leading the way. Old analogue form of media such as print, OOH and, to an extent, radio and linear TV have all come under pressure.
One of the challenges for advertisers is that much of this digital consumption is now going to ad-free platforms. Disney+ has built up to 95m subscribers, while Netflix has topped 200m. The same situation can be found in podcasts and in other forms of digital content. In the US, only NBC’s Peacock has embraced an advertising-supported model.
It’s worth remembering that right now the majority of the content that’s being shown is still owned by the linear channels. The biggest show on Netflix is still Friends, for example. That won’t be the case for much longer as content on streaming platforms separates from the linear broadcasts.
Long term, it’s worth exploring the opportunities for technology that can insert brands into library footage. We work with a company called Ryff that can insert 3D representations into shows and keep brands in ad-free environments.
The best way to avoid the ad-free crunch is to think more closely about what you are trying to achieve. Move away from proof measures that focus on cost per advertising unit and instead ensure you focus on looking at those that demonstrate business benefit. Cost per lead or improving long-term brand health could all be more powerful measures that help you make sustainable choices.
Right here, right now
In markets that are starting to open up, there could be a short-term opportunity in OOH as people take to the streets once more and, maybe, even take a plane. As passenger numbers increase, the value that airports offer, for example, will increase. In line with our belief that you can turn a tactical opportunity into long-term benefit, this could be moment to start to build a mutually beneficial relationship.
As countries open up, it may be that brands invest heavily around key moments and new freedoms. In the UK, for example, GroupM has warned about a big ramp up in activity which will create an inventory bottleneck. In the US, GroupM is predicting at least a 15% rise in spend, which is a net increase on 2019.
For those controlling budgets across markets, the different timings around the relaxing of restrictions also create an opportunity around allocation. If the UK and the US open up faster because of their more rapid vaccination programmes, while Europe, for example, has to delay because the current surge, it may make sense to reallocate budgets to markets where consumers are more able to spend.