Declining TV ratings and the rise of ad-free streaming services makes it hard for advertisers to maintain the broad reach they've become accustomed to.
Advertisers must strike big deals with streaming platforms and upfront packages with networks, a top exec from Omnicom Media Group said.
Streaming services like NBC's Peacock and WarnerMedia's HBO Max give advertisers new ways to reach consumers, but others that are coming from Disney and Apple are ad-free, said Catherine Sullivan, chief investment officer for North America at Omnicom Media Group. Plus, all these services have different ways of measuring viewing, and some are reluctant to share data.
"Consumers are spending more time than ever with premium video, but trying to stitch all that together is really hard," she said.
Omnicom is working around ad-free platforms by striking product placement and brand integration deals with Netflix and Amazon shows like, respectively, "Stranger Things" and "The Marvelous Mrs. Maisel." In the case of Amazon, Sullivan said that Omnicom has a holding company-level deal with the company.
Sullivan said that while Amazon is newer than Netflix at this work, she thinks there's a big opportunity to insert marketing messages and product placements into Amazon Prime shows. And while Amazon's original shows are ad-free for now, she said she expects those shows to eventually be distributed in Amazon's IMDb TV, which is ad-supported.
"There's no question that they're going to figure it out and be a major force in the next couple of years," she said. "We're impressed with what we've seen so far with some of their content."
Omnicom is shifting money to upfront from scatter markets
Sullivan said Omnicom is also heavying up on upfront buys with TV networks to offset shrinking TV ratings that reduce the ad inventory available to advertisers, and avoiding the more expensive scatter market.
"We've been telling our clients to stay away from the scatter market — I don't want to see them ever doing that," Sullivan said.
As marketers look to move budgets from linear and OTT advertising, agencies are adjusting how they buy. At Omnicom, Sullivan has restructured linear and digital teams so they work closer together, she said.