Ad Spend: New Programming vs. Repeats
Ad spending on new programming was down 13% in the first half of 2023, while repeats only dropped by 7%. In fact, repeats had a 79% share in spending, the highest since the pandemic. Another bright spot for sellers is live sports, which is a high-demand programming type, with the fall being the busiest as a result of college and professional football.
New programming that was wrapped before the strikes will eventually run out, leading to a lot more unpurchased inventory. What is certain is that consumers will keep tuning in to TV, and the reach it offers for advertisers is impossible to match in other media.
How these companies use their ad dollars is also shifting from national to local.
Why Local Scatter Buys Are More Effective Than Buying National Campaigns
Can a local scatter buy really have a better return than a national ad buy? It depends on the company’s product and audience, but local TV ads often deliver much more value. They allow brands to deliver more personalized content to an audience, and most big brands have this strategy in place because of the differences in markets.
Home improvement chains focus on different products with climate and environment in mind. Fast food eateries often have regional menus, and big-box retailers refine what’s available by location. Additionally, it’s usually less expensive to purchase local inventory.
Organizations may also prefer local because they want to focus on growth in particular cities based on their analysis of competition and other factors.
National Brands Have Many Ad Budget Options: Make Scatter Buys More Attractive with Pay for Performance
Due to strikes and uncertainty, national brands will likely hold back money from the 2023-2024 upfronts. Some may be reallocating those funds to other digital advertising options like OTT/CTV, but streamers aren’t immune from the strikes and a decrease in new programming. Companies could also choose to spend these dollars on radio or print.
One of the best ways to sell this excess inventory so it’s more attractive to advertisers is with pay for performance. It’s the process of delivering impressions (performance) agreed upon by the station and advertiser. It’s different than the standard method of buyers submitting ratings, placing the burden on the seller to do this. A customer accepts the ratings with a guaranteed percentage of impressions.
It’s not specific to programming or dayparts, but advertisers can still include requirements like not running near competitor ads, program quality, and percentages they’ll accept in less desirable spots.
Advertisers like it because it’s more reliable, and makeup weight can happen in flight, which eliminatesmakegoods and credits.
The other question you may have is how to maximize revenue on this inventory left over from upfronts. You can optimize rates with the power of data by using dynamic pricing.
Optimize Scatter Buy Rates with Dynamic Pricing
Dynamic pricing is an approach to rate optimization that delivers pricing based on demand. These tools use real-time avails, timelines and other information to provide the “market” rate for that spot. It does this by using a rate curve that defines the specific scenario, and it all happens automatically without the need to log in to a traffic system.
Dynamic pricing works for any inventory in any situation. It’s flexible and customizable, with the ability to set floors, ceilings and discount tolerances. National TV sellers have been leveraging it for some time, so national brands are already familiar with it.
Scatter Buying Season Continues
Until there is an agreement to end strikes, scatter buys will increase. After the strikes, there will be further delays in recovering from their impact. Using pay for performance and dynamic pricing allows you to make the inventory more attractive and optimize its value.
For more local TV sales content, read these posts.
Local TV Must Do More with Less with Technology to Bridge the Gap
Selling Impressions vs. Ratings in Local TV
TV Advertisers Demand Common Linear and Digital Metrics: Explore the Challenges and Solutions