How do regional restaurant, retail, and casino resorts balance media as they reopen?
With the trend towards greater digital and OTT/CTV investment, how do regional chains and destinations justify the higher CPMs vs linear video costs to attract customers back in?
Every day the media discussions around the upfronts (both linear and digital) continue to feature the movement to connected TV and devices. It’s the hot trend, and while viewership has grown through the pandemic, are these channels actually driving traffic?
OTT/CTV does address the need for local focus, which is another outcome of marketing through the pandemic. More than ever it’s all about local. Local shopping, restaurants, local news, local everything.
Here’s are some good perspectives from HBR from a solid media and brand builder:
10 Truths About Marketing After the Pandemic
by Janet Balis
The Covid-19 crisis has reinforced what we already know: that brands must communicate in very local and precise terms, targeting specific consumers based on their circumstances and what is most relevant to them. That means truly understanding the situation on the ground, country by country, state by state, zip code by zip code. For some businesses, such as banks, restaurants, or retailers, it may even mean tailoring communications store by store. (https://hbr.org/2021/03/10-truths-about-marketing-after-the-pandemic).
While targeting on a local level is relevant, is it scalable for regional players? National upfront pricing is going up, and inventory is tightening, so where do regional media economies of scale fit in? Do OTT/CTV CPM’s – at 4-6 times that of linear video, make sense?
We have several clients that don’t believe the inflated CPM’s are better over linear and will only shift a very small portion of the budget that way.
One of the other challenges on the digital front of course, is fraud. While advertisers are increasing OTT/CTV spend (see recent upfront news), the larger the brand, the bigger the concern over fraud. See this study from Marketing Dive:
Study: Advertisers favor CTV buys with established media outlets over streaming startups
By: Robert Williams
Major advertisers plan to spend more on video in 2021, favoring the connected TV (CTV) options of established networks over streaming startups, according to a survey conducted by researcher Advertiser Perceptions. Most advertisers plan to keep their media allocations consistent, spending 40% for upfront and 60% for scatter, the survey found.
Concerns about advertising fraud, especially in programmatic auctions, are driving the biggest advertisers to favor linear TV and the growing CTV options of established networks. Those advertisers seek the same assurances from CTV that they receive from linear TV, demanding that ads appear on reputable sites (87%), pair with brand-safe content (80%) and run within professionally produced video content (79%), the survey found.
So where does that leave regional brands and scaling for reopening?
One of the sweet spots still remaining is a viable and surprisingly affordable option – local linear video.
Local, regional channels have more flexibility and options than traditional media agencies actually understand or know how to negotiate. The same is true with in-house planners. That said, if you pay attention within your own market, there are some brands and agencies that do understand. These brands typically are around furniture, automotive and other related franchise groups.
So while the media news and focus on local has put much emphasis on OTT/CTV and digital, why is it that the biggest of the brands, including Facebook, Amazon, Apple, Netflix and Google are spending more on linear than ever before? Because it reaches the masses for consistent massive response.
Here’s a post and study on FAANG media spends. Interesting trend.