May 2019 - Cluevest

Who Watched the Oscars? A Close Up on This Premium Audience

Television’s tentpole live events, such as the Super Bowl and The Oscars, continue to reliably attract top advertisers. TV viewership may be facing headwinds, but brands still see these broadcasts as a compelling opportunity to reach large and engaged audiences.

At the same time, marketers have been conditioned by the speed and richness of data available to them in digital advertising. Increasingly, they are pushing TV networks and agencies to provide the same speed and granularity of data for their spending on TV ads, enabling a move from post-mortem analysis to real-time optimization. Networks are responding by investing in new capabilities to meet their advertisers’ needs, in the hopes that this will help them reclaim the narrative for TV advertising and pull back dollars from digital budgets. This dynamic is likely to shape the way TV ads and sponsorships are bought and sold in the very near future.

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AI Makes the Call: These Brands Scored in Super Bowl Exposure

With more than 100 million Americans tuned in from homes, bars and viewing parties across the country, the Super Bowl offers unparalleled reach to marketers seeking exposure for their brands.

Objectives of Super Bowl advertising vary. This year, Super Bowl ads drew awareness to new or recently launched brands, products and offers (for example, Disney’s Captain Marvel and Audi’s e-tron GT); they also built brand affinity through new messages (such as Budweiser announcing that its beer is now brewed with 100% renewable electricity from wind power).

Measures of success are equally varied. Surveys and polls have long crowned winners by recall and favorability. In a multiscreen world, the metrics have expanded to include views, tweets, likes and shares. For the C-suite, however, the most meaningful measures are the outcomes that marketers hope these ads influence—namely, website traffic, store visits and ultimately sales. The lack of a definitive linkage between individual TV advertisements and outcomes, however, remains a barrier to a better understanding of the returns on these investments.

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Four Ways Traditional TV Can Compete with “Chewbacca Mom”

Why should a viral video of a giggling mom in a Chewbacca mask frighten television executives? Because digital video is encroaching on traditional television’s biggest and last remaining advantage: the mass audience.

With more than 155 million views and counting, the four-minute Facebook video of “Chewbacca Mom” Candace Payne cracking herself up in her car while donning a mask of the Star Wars Wookiee might even eclipse the total U.S. viewership of the London 2012 Olympics, one of TV’s most watched sporting events. But while NBC made just a small profit on the games, after shelling out more than $1 billion for the right to air them, Facebook will scoop up 45% of ad revenue associated with Payne’s delightfully goofy viral hit—and the company didn’t spend a penny to produce it.

Digital video is delivering superior results in the areas that advertisers care about most, such as targeting, engagement and measurement. And while digital ad spending still doesn’t approach the total spent on broadcast commercials, major brands are shifting their advertising dollars away from TV faster than most people realize. In a brief that I wrote with my colleague Danny Hong last year, we discuss findings from a recent Bain study, which show that fewer marketers consider TV to be among their top five advertising channels—the first time that has ever happened.

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Executive Conversations: Fairfax Media CEO Greg Hywood

Greg Hywood, CEO of Fairfax Media, discusses how the Australian media giant transformed its business to thrive in a rapidly changing market. Hywood touches on the value of a future-back perspective that forces rethinking of appropriate metrics, how the culture had to change and how to keep a transformation on track.

Hywood, who became CEO in 2011, recognized that the company needed to move away from the traditional approach of focusing on newspaper circulation as a key performance metric to the yardstick of readership, which incorporates the online audiences of the large metro mastheads. This allowed Fairfax to make a significant cut to newspaper production and to focus on a more engaged audience.

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How Media Companies Can Use M&A to Expand Multiples

A host of trends are redefining today’s media landscape. The line between content creators and distributors continues to blur, changes in consumption patterns are accelerating, advanced technologies are being adopted in rapid cycles, and new competitors are constantly emerging. As the industry quickly evolves, we predict that more media companies will turn to mergers and acquisitions and that deal values will continue to rise. In 2012, the total value of media deals was less than $60 billion. That value reached $200 billion in 2016 (see Figure 1). While there will be a few targeted scope deals that merge distributors and content creators, such as the proposed AT&T–Time Warner merger, the majority will be scale deals aimed at combining networks or MSOs to benefit from synergies.

Scale deals make sense. In fact, for a media executive, there often is no more consistent way to spur growth and shareholder returns. When successful, these deals allow media companies to reset their cost base and increase negotiating power. Yet capturing this value is no small task. Bain research shows that most deals fail to deliver the cost synergies assumed at announcement. Systems complexities, increased attrition, cultural differences and lack of focus (among other common issues) can make it difficult to capture anticipated synergies.

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