Broadcast television executives issued a wake-up call for the industry during a recent trade show in New York, saying local TV station groups must modernize their advertising sales practices and technology if they want to aggressively compete for dollars and opportunities that are increasingly flowing toward streaming and connected TV platforms.
The comments were made during a panel discussion at NAB Show New York earlier this month, where executives and industry thought leaders discussed what’s working — and, perhaps more interestingly, what isn’t working — when it comes to broadcasters competing for ad dollars.
Streaming and connected TV platforms have made an aggressive play for traditional TV’s ad lunch, launching targeted and interactive features to convince ad buyers that they can reach the right group of people at the right time. As premium content like news and sports moves toward streaming platforms, that message has resonated with marketers who seek ways to target specific consumers across age, income level, ethnic background, gender and non-traditional demographics like sports team loyalty.
Broadcasters have a lot of catching up to do.
“The best thing that we’ve done in this process has been cultural change,” Tom Fleming, the Executive Vice President of Advertising Sales at Fox Television Stations (FTS), said during the panel. While giving props to streaming and connected TV platforms for shaking up the industry, he said FTS recognized things were changing several years ago — before the global coronavirus health pandemic — and Fox worked to adjust their advertising scale and targeting capabilities accordingly.
Over time, that has meant bringing in new platforms like Tubi and restructuring the company’s advertising sales units, so ad opportunities are sold against Fox’s portfolio of broadcast stations, cable networks, Tubi and its new streaming platform Fox One. The company is also incorporating more artificial intelligence technology and solutions into their ad selling practices; earlier this month, Fox Advertising said its AI-powered ad selling agent was being used by WPP, Omnicom and others for live, linear TV ad campaigns.
Even without that type of platform diversity, broadcasters can pull best practices from major tech companies to influence their sales practices moving forward.
Del Parks, the President of Technology at Sinclair, said most local broadcast TV advertising opportunities continue to be sold through traditional methods, depending heavily on sales and scheduling practices that were developed decades ago, when most Americans watched a few channels over broadcast and cable TV.
With hundreds of streaming channels and dozens of premium platforms competing for attention, it has become crucial for broadcasters to adjust their tactics. But they can only do so if the technology is there.
Right now, for broadcast TV, it isn’t. That will change if Sinclair and other broadcasters are successful in convincing federal regulators to wind down the current digital transmission standard, called ATSC 1.0, in favor of NextGen TV, a standard built on ATSC 3.0 that uses a mixture of broadcast signals and broadband infrastructure to deliver video signals to consumers.
By requiring Americans to have Internet-connected devices to receive broadcast signals, local TV station owners like Sinclair can start to adjust their sales pitches to advertisers, offering them comparable targeting capabilities that streaming platforms do today. Even before the technology is widely adopted, Parks said Sinclair is working to connect its advertising systems with newer technologies that would allow agencies and local businesses to purchase inventory more easily.
“Until we can move our system to an impression-based economy that has audience relevance, I think we need to connect those dots,” Parks said. Nearly 80 percent of Sinclair’s business comes from local advertisers, Parks noted, making improved sales capabilities particularly important for smaller businesses operating within individual television markets.
Tom Sly, a former executive with the E. W. Scripps Company who now works as a managing partner at Media Inno, said broadcasters need to move beyond the narrow thought process of advertising exclusively on their over-the-air signal and bring prospective ad buyers a multi-platform solution, one where broadcast is sold alongside connected TV and streaming, not independent from it.
In that respect, Sly’s comments were an endorsement of the way Fox has shifted to selling ad inventories — across local Fox-owned stations bundled with Tubi, Fox One and the cable networks. He went one step further, saying broadcasters needed to ensure that their audience wasn’t segmented out between broadcast and streaming.
“We have to be across all platforms and devices,” Sly said, arguing that broadcasters should sell access to their combined audiences rather than treating individual distribution platforms as separate businesses.
