As TV Viewers Move to Digital Video, Magna Global Plans ‘TV Alternative’ for Upfront
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- Janeiro 26º, 2017
The TV industry is just a few months away from making its most important pitch to Madison Avenue, but one of the biggest buyers of media in the U.S. is already mulling new alternatives to the boob tube.
Magna Global, the large media-investment unit of Interpublic Group, is working on what David Cohen, the company’s president of North America operations, calls “an aggressive kind of television alternative package” in time for the “upfront,” the annual market during which U.S. TV companies try to sell the bulk of their ad inventory. “We are gearing around a comprehensive alternative play, if you will,” Cohen said in an interview. “We are just acknowledging that content is being consumed in other places, and we need other opportunities to move dollars in that direction.”
Cohen’s words may rattle ad-sales honchos at TV networks. Magna oversees $17 billion worth of ad spending in the United States alone for blue-chip advertisers including Coca-Cola, BMW, and Hershey Co., among others. The stance puts another spotlight on advertisers’ desire to align their ad messages with multiple varieties of video content as consumers flock more noticeably to mobile devices and streaming video.
The company took a big step Wednesday when it unveiled a new agreement with Roku, the streaming-video media player, that will give clients access to beneficial rates and pricing when they advertise, along with research and data about how those commercials perform. This deal follows one struck last May between Manga Global and Google that gives the agency’s clients preferred rates on YouTube’s so-called “unskippable” ad inventory. In exchange, Magna was set to move $250 million from budgets allocated for TV to the new ad space.
Magna’s Cohen declined to specify the value of ad inventory expected to be committed to Roku. “This is not a $250 million YouTube deal. This is not that at all,” he said, adding, “I can tell you we are more than doubling our spend from last year. What we spend on Roku is not insignificant.”
Other big Madison Avenue buyers have experimented with digital commitments, and the practice can be tricky to master. Publicis Groupe’s Starcom Mediavest for several years cobbled together agreements that gave big clients favorable terms with venues like Facebook (in 2014) and Google’s YouTube (in 2013). Some of that digital focus proved upsetting to certain clients who felt the efforts didn’t always move the needle on sales. Publicis restructured its media-buying agencies late last year, as a handful of prominent advertisers moved business to rivals.
That dynamic was also at large in TV’s most recent upfront market, when several consumer packaged goods companies were said by senior buyers to have moved money from digital back to TV. On Thursday morning, NBCUniversal CEO predicted his company might experience another strong upfront in 2017.
There’s no denying, however, that couch potatoes have migrated elsewhere. Magna’s Cohen estimates broadcast has over the last four years seen a decline in adult viewers that veers close to 40%. Cable, he says, “is doing slightly less bad. “That’s not to say consumers are not watching TV – but it’s not the way they have in the past,” he added.
Advertisers have to remain flexible, said Cohen, but should be prepared to follow their consumers. “We are not going to stand in the way of what works for clients,” he said, but “there is no end in sight as far as I can tell for the diversification of video platforms in terms of content.”
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