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Google's difficulty is TV's opportunity

News, 29 March 2017
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NEW YORK: As the annual TV upfronts get under way, the expectation is that network executives will be taking full advantage of the brand safety problems that have engulfed Google in recent weeks.

"We don't like to go after any competitor but in a case like this it's so egregious and so obvious," said Bill Abbott, chief executive of Crown Media, which owns the Hallmark Channel and Hallmark Movies & Mysteries channel.

"We would be foolish not to lean into that in some way," he told the Wall Street Journal.

Anecdotal evidence suggests that minimal pressure will have to be applied to what is an open door and which analysts suggest could cost YouTube $750m in lost ad revenue on one estimate.

"Trust is really coming to the forefront" of discussions with media buyers and advertisers, according to Sean Moran, head of marketing and partner solutions at Viacom.

But more dispassionate observers are less convinced, not least as TV ratings continue to fall and as more viewers cut the cable cord (Digital TV Research has predicted a 5% drop in the number of traditional pay-TV subscribers by 2020).

"I don't think it [Google controversy] will have any meaningful benefit [for TV] but we will hear plenty of noise about the problems in digital," stated Brian Wieser, a senior research analyst for Pivotal Research Group, who predicted that prime-time ad spending commitments made during this year's upfronts would fall between 2% and 3% on last year.

A sceptical David Cohen, Magna's president of North America, observed that prime-time TV ratings among 18-49 year olds had "dropped about 32% over the past four years and prices have not dropped 32%.

"There is no part of our business where that math makes sense, except for the linear TV business," he said.

Aside from the economics of network television, one ad buyer noted that "anyone that can provide targeting and high quality content will benefit", a description that could apply equally to an OTT service like Hulu or a publisher such as the New York Times.

Advertisers may also decide to simply wait until Google gets its house in order – something it must surely be rushing to achieve – before recommitting their cash rather than choosing to divert it to television.

Data sourced from Wall Street Journal, MediaPost; additional content by WARC staff

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