The Medium Is The Mess

Disney CEO Bob Iger spoke on Thursday to CNBC about the idea that Disney’s television assets (cable networks, the broadcast network and stations) “may be non-core” to his company as “transformative work…dealing with businesses that are no growth businesses” is causing them to “look expansively about opportunities.”  Putting aside that I believe there are natural synergies between the traditional networks at the national level, film studios and national or global streaming services such as Hulu or Disney+ (i.e. they share similar content), I think that the idea that they and others with traditional media assets need to look “expansively” is absolutely correct.

One manner of thinking expansively relates to the very definition of a medium such as television, which is something I’ve been contemplating for several years.  Rather than thinking about “linear TV” vs. “streaming” or “connected TV”, from an advertiser’s perspective it’s been true for a long time that most large advertisers wish they could operate holistically at the level of the medium, rooting themselves in the idea that video is video wherever you find it, whether on a handset, a PC or a large screen in a living room, and regardless of whether it’s delivered by Disney or YouTube or anyone else. 

Of course, the reality has been quite different, as measurement is difficult across platforms (especially where walled gardens are involved) and conceptually most people would agree there is a big difference between sponsoring a new Marvel series vs. sponsoring a cat on a skateboard (unless the cat on a skateboard were a new Marvel super-hero – but I digress).   Nonetheless, cross-device measurement is gradually improving and YouTube, at least, is likely going to be seen as a part of the traditional TV world, at least in the eyes of Nielsen and many large marketers as Nielsen One rolls out.

But even this isn’t expansive enough to reflect how the industry is evolving.

With Meta’s launch of Threads last week we now have a new text-based platform to complement the what is now a video or visually-centric Instagram and Facebook.  I don’t doubt that marketers will be all over Meta and find budgets to support Threads regardless of what its advertising assets are.  However, I think that if Threads recognizes that differences with Instagram are important to maintain, their advertising assets could very well be different, too.  I’m doubtful marketers will spend much time trying to figure out how to categorize Threads: instead they’ll each iterate on the existing metrics they currently use to justify spend with other Meta platforms.  At the same time, TikTok will continue growing.  And what is TikTok in this context, anyways?  It’s video…but it’s social…and now it’s trying to do e-commerce and probably retail media, too?  As is Amazon.  And back to Google, with search, display and video.   And while we’re at it, YouTube is probably the largest audio platform out there, too.

As I pointed out in my interview with NBCU’s Krishan Bhatia this week, it’s notable that NBCU is pushing more aggressively down a path that includes the capacity to sell audiences across multiple types of media beyond television.  In one form or another if Disney – or whomever might want to buy its TV assets should they sell – wants to see growth and overcome the secular decline facing TV-based advertising, including it streaming variants, they’ll want to do more of this sort of thing as well.

By any other name I think we might have called this “cross-media sales” once-upon-a-time.  What might have been aspirational twenty-plus years ago during the era when many media conglomerates were created (think of AOL Time Warner’s with its TV, digital and print businesses or Viacom 1.0’s TV, outdoor and radio aggregation).   But efforts to sell in bundles failed to reflect that marketers had pretty rigid ideas of how to manage budgets within and across media at that point in time.

To oversimplify, larger marketers would historically allocate certain percentages of their advertising budgets to different media in their individual campaigns either because certain combinations are projected to produce desired marketing or business goals or because they have established certain preferred mixes that are changed incrementally over time.   Different media were perceived as possessing certain attributes and rules of thumb were applied to explain why a marketer should use a given medium under a given circumstance.  Consultancy Marketing Evolution has a good overview of media planning here. 

In my own career, building on the pioneering work of McCann-Erickson’s Bob Coen, who began organizing industry-wide data along the lines of TV, radio, magazines, outdoor, etc. in the 1950s, I always tried to account for changes to  implied industry-wide aggregations of media plans into my advertising industry forecasts.   This was also reflected in the models that most Wall Street analysts used in building out their own forecasts for the growth of advertising-related revenue streams for the world’s largest media and technology companies.

However, as I think about the right way to model the world of advertising in years ahead, I am increasingly of the view that historical medium-based models are going to be highly flawed.  Let’s remember: what is a model, if not an abstraction of reality?

As I mention above, it’s true that most marketers still think of television as something different than radio or outdoor or print, but the problem is that digital media can be something different and all of the above at the same time, depending on the advertiser’s idiosyncratic perspectives and preferences.    Far more than was true in the past, there’s no longer a one-size-fits-all definition of a medium, even within a single traditional category of marketers.  Digital media can be and do almost anything a marketer wants it to be, so long as the related advertising products have been appropriately adapted and features such as measurement are appropriately developed.   At long last, “cross-media” sales are now possible, but only because by now almost everything is digital, and so the cross might be easier to bear.

This is more than an academic issue: how marketers think about these things informs how they optimize budgets, and ultimately how they shift spending between different suppliers of advertising inventory.

Going back to the expansiveness that Bob Iger references, this all leads me to conclude that sellers of traditional advertising inventory don’t necessarily need to fight for share of their declining media in order to attempt to grow or avoid decline.   To the extent that they can develop scaled digital portfolios of ad inventory and further develop appropriate cross-media measurement tools, I think they’ll be able to bundle their inventory together and be better positioned to fight for a growing share of a growing overall advertising industry, rather than competing within more narrowly defined and shrinking traditional categories of media.