How Marketers Will Reach Their Audiences Amid Marketplace Challenges

Television remains the most effective way to deeply engage viewers. Yet it’s never been more difficult for brands to reach their audiences cost-effectively. In the past three years, average cable TV ratings have declined 24%*, and average CPMs have risen over 31%.**

The TV industry is facing challenges on multiple fronts, including inflationary pricing, audience fragmentation, procurement difficulties and increased ratings pressures. It’s harder than ever for advertisers to reach their audience effectively.

Taking a closer look at declining ratings, we found the following in a study of the ad-supported and measured cable networks we work with:

• In the 18-49 demo, 14% of 88 the networks showed viewership stability or growth in 2018 vs. 2017. Eighty-six percent of networks showed a decline in impressions, and 57% of our available 2018 cable inventory was down double digits over 2017.
• Among adults 25-54, 24% showed viewership stability or growth in 2018 vs. 2017, and 76% of the networks we measured faced impressions declines. Of the declining networks, 40 were down double-digits in delivery – thus, 45% of our available 2018 cable inventory was down double digits over the previous year for the 25-54 age demo.

This is where Cadent comes in – choosing an alternative to the traditional Upfront model can return negotiation power back to marketers and agencies. Below, Cadent Sales President Jim Tricarico spoke with MediaVillage’s Simon Applebaum about easing marketplace challenges during and after the Upfront season and why he’s encouraging marketers and agencies to be strategic, not reactive, as they consider their media plans.

For more on how to rethink your media plan this Upfront season (and beyond), check out our Rethink Calculator. 

This article originally appeared in MediaVillage. 

Back in the first two decades of television’s existence (the late 1940s to the late 1960s) cigarette makers were among the top advertisers, with one sponsor offering this tag line: “It’s what’s up front that counts.” For Cadent President of Sales Jim Tricarico, what counts most for this Upfront season is maximizing viewership of messages for a wider variety of advertisers. That effort comes amid mounting challenges, though, including rating declines for many broadcast and cable TV networks, cutbacks in some network ad minutes and pods (especially in primetime) and growing audiences for content distributed through smart TV sets and TV-connected devices.

“It’s a freight train coming right by every client and ad agency,” Tricarico says. “Trying to maneuver in this environment is very hard.” That’s prompting Cadent to position its appeal for national 2019 Upfront advertising dollars as a natural complement to current strategies among individual agencies and brands, rather than as rivals. “What we are is a solution,” he explains. “We don’t say we’re better than or instead of [networks]. We try to help these [advertisers] manage through whatever networks and dayparts they need help on by getting access to deliver these networks or dayparts at a significant savings versus the networks’ direct pricing.”

With support from 200 multichannel video providers, Cadent transmits commercials from national advertisers inside the two or three minutes per hour many basic cable networks set aside for local sales. Cadent also delivers addressable messages on IP, linear and video-on-demand inventory.

Cadent works with 42% of the Ad Age top 100 brands. For this blue-chip roster, “the secret sauce is in our reach across all these MVPDs,” Tricarico points out. “Why is that important? Marketers require access to a truly national audience in order to reach their customers.”

Another part of Cadent’s 2019 Upfront message urges advertisers and agencies to rethink their media plan and be strategic, not reactive. With added pressure to reach GRP goals in a marketplace with constrained inventory, marketers can complement network direct buys with data-driven, efficient linear TV, reaching GRP goals for less.Then, Tricarico says, marketers can allocate savings toward addressable advertising, a medium capable of providing the premium reach and high-value audiences marketers require to move the needle for their businesses.

“You can’t talk about the Upfront if you’re not talking about the evolution of addressable, and how that is a part of every advertiser’s strategy as they enter 2019 to 2020 and beyond,” Tricarico adds.

This Upfront season, Tricarico wants to distinguish the difference between unsold and remnant inventory. Some companies are easily turned off by the word “remnant,” which carries an assumption of being lower-quality inventory airing during early morning, overnight or on less desirable networks. “We counter the negativity by showing how unsold inventory can be premium inventory,” he explains. The counter: Cadent’s unsold data-driven linear inventory comes from every major network and airs alongside premium content, leveraging historical data and forecasting to know what will be available.

Cadent’s current appeal is also directed at the variety of new advertisers hitting the TV scene this year, from dining establishments to information-oriented websites and mobile applications. As for addressable advertising, Cadent expects a major jump in spending by both agencies and individual brands this Upfront cycle, due to better audience measurement and deeper ability to target specific consumer demographics. 

Tricarico sees a role for Cadent in smart TV advertising sales developing over the next two to three years. Despite estimates of $13-$14 billion in smart TV ad revenue this year and above $20 billion in 2020, he’s waiting for that marketplace to resolve some issues first. “The big question is measurement,” Tricarico insists. “Who will measure? How do you measure this audience? How do you define impressions? All these questions still need to be worked out. The smart TV market is still in its infancy and will be a much bigger player as time goes on.”

Interactive advertising and commercials running on broadcast services powered by ATSC 3.0 technology are two other options Cadent is exploring right now. When both become scalable and measurable, they will be utilized, Tricarico promises.

When this Upfront season wraps, Tricarico has two big messages to communicate throughout the entire ad community: This medium is evolving – not dying – and it’s time for the ad sales business to morph into an ad solutions business.

“We’ve reached the tipping point where agencies and clients are saying enough is enough,” he says. “They need help. You have to solve problems. We’re out to help everyone maneuver through this challenging marketplace.”

* C3 Ratings: key demo ratings (18-34, 18-49, and 25-54) for Cadent Total Day (Mon–Sun, 6a–12 midnight) in 2017/18 vs 2014/15

**Media Dynamics, Inc., www.mediadynamicsinc.com/media-matters/august-1-2018