2020 in Hindsight: How This Year is Changing the Media Buyer/Seller Dynamic

By Jon Whitticom

The events of 2020 have changed our world in ways that we’re still navigating. As a result of COVID-19, businesses have closed and re-opened, and closed again, all against the backdrop of important social justice movements. In short, there’s a prevailing sense of uncertainty among consumers and businesses alike. In our corner of the world, uncertainty in business means uncertainty in advertising, and I believe this will result in a shifting dynamic that will improve the way media is bought and sold for years to come.

The greatest shift may be in how the buy side and sell side interact. Sellers of premium inventory have historically owned something very valuable that advertisers needed: eyeballs. And they still do. But now, that is not enough. There is greater onus on the sell side to deliver on a product or service that appeals to cautious and under-funded advertisers and agencies. This is where things get interesting.

In this unusual time, I have seen four key truths emerge in how TV media is sold now, and will be sold in years to come:

Efficiency Is Essential and Here to Stay

In a recent survey, 95% of advertisers said that programmatic buying will be an important part of their media strategy for the remainder of 2020.* This is not surprising, as many agencies find themselves in the position of doing more with less, and reaching their audience with minimal waste. Consider advanced TV, which was still in its growth phases in 2019: In April of this year, 91% of marketers FreeWheel surveyed said they were allocating budget to the medium, compared to 79% in late last year**. Many buyers are also turning to pub-direct solutions, where automation plus a direct line to the sellers allows those buyers to double down on efficiency.

Data-driven advertising that reaches the right audiences across channels, devices, and publishers with more accountable reporting is now a reality that will improve the industry for both buyers and sellers.

Flexibility Is Now the Foundation of Partnership

By definition, the Upfronts are about commitment. While in the past, advertisers were comfortable pledging billions of dollars to media partners months in advance, buyers are becoming commitment-phobic. Concern with long-term contracts and media buys in an unpredictable environment have made new solutions critical, and flexibility a must-have.

Today, buyers want to ensure they have solvency with their media deals, so they are leaning on solutions that will allow them to resell inventory without great loss if the need arises. Where does that leave the Upfronts? I expect sellers will continue to evolve to ensure the long-term health of their business above all else through the accelerated adoption of flexibility, technology, data and unique offerings. So while many of this year’s Upfronts events were moved online or cancelled, the deal making continues to flourish.

Industry Cooperation Will Improve Offerings

In today’s uncertain advertising landscape, I’ve noticed more and more companies working together to provide the best solutions for their clients. This was true even before COVID-19, with the introduction of initiatives like OAR, OpenAP and On Addressability. I believe we’ll see more of this type of partnership in TV, with a focus on audience-first, smart solutions that continue to compete with the scale and targeting of digital.

I also think that the use of data clean rooms and technologies like Blockgraph, a joint venture between Charter, Comcast and Viacom that provides a safe way to share data insights over a peer-to-peer platform, will increase, allowing for better data connectivity. We know that data is the key to efficient targeting, and these clean rooms allow multiple partners to work together in a secure way.

Sellers Will Double Down on Their Strengths: Trustworthiness and Transparency

In our current environment there are several factors at play causing buyers to demand more transparency. First, the economic situation that has resulted from COVID-19 has left buyers skittish about wasting a single dollar on fraudulent or low-quality inventory. Second, there is growing concern about proximity to hate speech and other negative content, which has rattled the market recently, especially around social media.

The solution is trust, and trust comes to life through reliable processes and products. Sellers must be able to convince their potential buyers that their inventory is premium, brand safe, and free of ad fraud. This is achieved through constant monitoring of inventory and integrations with IVT measurement and verification companies with the highest standards and the right products to identify problems before they arise.

External conditions have always had an impact on the ad sales market, but 2020 is like nothing the industry (or world) has seen before. The events of the first half of the year have sped up innovation and forced both buyers and sellers to change the way they see the business – changes that I believe will be permanent.

Increasingly, deals are not being made in boardrooms, over dinners or in crowded event spaces. The days of the “handshake deal” are over, both literally and figuratively, and there is much more to come as our industry pushes ahead. As we move forward, buyers will be looking for more efficiency in pricing and processes, greater flexibility with contracts and deals, collective industry problem-solving, and trustworthiness and transparency overall. I believe these changes will shift the buyer and seller dynamic permanently, but in doing so, will move our industry ahead faster than any of us could have predicted – a lasting win for all.

*Source: Advertiser Perceptions, June 2020

**Source: “New Challenges and New Solutions,” Comcast Advertising, May 2020

Appeared first in MediaVillage