The relocation of campaigns in the fall will result in low ad inventory. What do we advise to TV clients?
Even though the viewership of TV stations was growing, TV stations could not monetize it, as several brands in panic disrupted their campaigns. What impact will it have on the market? Should the advertisers be afraid of huge TV inventory sell-out rate in the second half of the year?
Let’s have a second look at what happened in the last few months. Home quarantine and demand for information changed viewer’s behaviour. At the beginning of the year, when TV viewership was slowly increasing and a slight decrease was expected to follow, corona stepped in and caused rapid growth, especially in March. The average time spent in front of TV screens grew by staggering 22.9 %. Meaning that people spent 5 hours per day watching news and series.
During this time, many brands waited to see, whether the economic shutdown will last a few weeks or a few months. No one was panicking yet, campaigns were running, although some clients understood the need to adapt advertising messages to reflect current situation. Growing TV viewership created big volume of available ratings, but there was no one to buy them.
Advertisers got scared
We have had enough of pandemic messaging in April and May and viewership got closer to normal, although it remained above average compared to previous years. That´s when advertisers started cutting budgets. Average number of brands present in commercial breaks decreased by 22% YOY in April and by 36% YOY in May. While there were 12 brands in commercial break on average in the first quarter, in the next two months this volume decreased to eight (situation on RTVS stations was quite different). That is one of the reasons why commercial TV stations kept their planned programs for fall, when there will be bigger chance to monetize them. TV self-promo messages evened out shorter commercial breaks.
In the fall increased viewership is expected, but not higher than by 1%
We have already experienced many situations on the TV market, but this one is – without a doubt – is one of the most peculiar. Advertisers want to know one thing: How will it affect my campaigns in the second half of the year?
TV viewership is slowly returning to normal during June and we do not expect summer to bring anything unusual. Despite concerns, Slovaks will spend their summer away from home (and away from TV screens). According to a Go4Insight survey, 62% Slovaks are planning to go on a holiday.
from TV screens). According to a Go4Insight survey, 62% Slovaks are planning to go on a holiday.
The summer months are off-season not only for TVs, but for majority of advertisers as well. However, this year TV inventory is going to in July already, as many advertisers have committed to move their cancelled spring campaigns to June or July. As a result, seasonality will change this year and TV inventory might already be sold out in the summer.
When the pandemic and quarantine were peaking, no sport news were broadcasted. Major sport events, such as the Tour de France rescheduled for the end of the summer, are supposed to attract much bigger audience than in previous years.
However, TV stations usually experience the strongest period in the autumn, when they also launch their key programs. We expect that viewership will continue to grow, but not at the pace of previous years. In the last quarter, we predict only slight YOY increase of 0.3-0.7%. In our forecast, we took the results of viewership from previous years as well as the trend of media consumption development into account. However, should the second wave of pandemic arrive in the autumn, viewership increase will outperform spring. Shorter days and colder weather are also going to play an important role.
Cluttered commercial breaks
We looked at TV sell-out rate and estimated its development till the end of 2020, comparing availability of TV inventory and the demand for it. During pandemic many advertisers postponed their campaigns to fall, what caused concentration of TV budgets in shorter period of time. We predict the communication to grow stronger from July onwards, with demand peaking in the autumn. Booking priority will be given to big, stable advertisers, who keep their budget commitments. Small clients might not be given the chance to get on TV at all. . There will be a disproportion between available ratings and demand for them. As a result, some campaigns might not be fully accepted by TV stations, and there might be an increased number of underdelivered campaigns.
Of course, a different development of this situation can´t be ruled out. Some advertisers might reconsider further TV communication and decide that dropping it completely till the end of 2020 will be more beneficial for them under current circumstances. As a result, the sector might decrease by 25 %. However, this scenario is unlikely to happen, as advertisers wouldn’t want to throw their money out of the window by paying penalties for not keeping commitments given to TV stations. We also discourage our clients from making such drastic measures, and we hope that the TV market won’t get destabilized this way.
Act faster than before
It is very important that advertisers are aware of the current situation and start planning their campaigns well ahead. Timely information on fall campaigns will be crucial for both TV stations and agencies. Collaboration between creative and media agencies might bring good ideas for effective solutions so that clients will not miss the key sales season of the year.
Although the prediction of available media space does not look good also in other mass- reach media types, such as outdoor or large global platforms (demand for advertising on YouTube grows and it will certainly be even stronger in autumn), an interesting solution can help the message to stand out in difficult circumstances.
Let’s not forget that TV media space offers a wide range options other than just standard spot campaigns. On the other hand, it is no longer just TV that directly influences the sales of products. In Starmedia and Data Science, we can model necessary media channels and investments for achieving the desired sales results or brand awareness. It will undoubtedly be necessary to use these predictive models in the upcoming season.