Horizon Media exec on why advertisers can’t ignore YouTube and shifting the upfront timeline
Horizon Media Chief Investment Officer David Campanelli also about talks the state of the diverse media marketplace and why streaming CPMs may soon come down in price.
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As media companies’ portfolios grow so rapidly, and some of those portfolios come in package deals that may connect inventory you don’t need with what you actually want, how are you viewing optimizing budgets for clients’ needs?
It’s always been a concern in the black box of the sellers’ data optimization tools—are they optimizing to their benefit or they are optimizing to our benefit? The big difference today is that we’re bringing our data to the table versus relying on their data or a proxy that they would use to mimic who our target is. [Now,] we’re bringing that data to the sellers. We’ve built that out with our own data infrastructures, clients have their own data infrastructures and we have set up connections with virtually every seller out there, whether it be via cleanroom or direct, that we can port that audience to them. They are now optimizing on our data and that’s a protection.
The second part of it is at the end of the day, what matters is the business result and everyone’s getting more sophisticated on measuring what that business result is. What was the outcome? Did it elicit greater sales? And once we get that fully figured out, all the other stuff is a proxy to get there.
We’ve reported some of the high CPMs some of the streamers ask for—is there a thought that could drive more money from TV to the likes of YouTube, TikTok or even the CTV platforms that host the streamers?
All of the streamers, very generally speaking, launch with very small user bases and there’s usually a strong amount of advertiser interest, and that’s why the CPMs start high. But over a fairly short period of time, as their subs grow and their usage grows, the usage starts to way outpace the ad spend. What we’ve seen really across the board in the streaming space is new properties that have been launched the last couple of years is a high starting price, but it comes down year over year over year, and I do think we’ll see a point where the linear CPMs and the streaming CPMs will meet in the middle over time.
But, one of the reasons why the upfront is not as critical as it used to be—it still has value and it’s still important and there are still benefits to participating upfront—advertisers have so many other outlets for video needs and premium video needs that it’s not the be-all-end-all the way that it used to be. Those are YouTube and it’s TikTok and it’s all of those things that you mentioned. And there’s a difference: YouTube is different content, different length than typically what’s on network and streamers, but it’s also reflected in the CPMs that we pay. We pay an appropriate price for the content we’re airing in. You just can’t ignore YouTube. It is the largest CTV streaming entity out there and you just can’t ignore it. The viewers have spoken, so to speak, and are spending time there and that’s something that can’t be avoided anymore—it’s not just short videos on your phone. Now it’s on the TV screen too.
Zooming out from all the money talk, what are the major trends you're seeing across the sellers this year and what they’re bringing to the table?
I knew we couldn’t have this conversation without talking about alternative currencies. I’d say that’s the biggest conversation point that we’ve been having with sellers to date, and it’s an important one. It’s one that we need to see progress on this year. Quite honestly, last year there was a lot of conversation about alternative currencies and very little action when it came time to actually transact. We need to move that forward, and we need to actually put into practice using alternative currencies for our deals.
Second, like I touched on before, the sellers want to maximize their entire portfolio, and I think using data to best reach our audience across their portfolio moves us in the right direction without being too siloed about what we’re buying.
Horizon has made commitments to using alternative currencies in the past. Do you have renewed commitments or what is the outlook for this year?
We’ve worked with all of the companies out there in the alternative currency space as well as with Nielsen. We expect to transact a meaningful amount of deals on alternative currencies this year, both on a demo-guarantee basis, but also on an advanced audience basis, which is really where the alternative currencies excel in that they have a 30 or 40 million household base that we can match our targeting data to versus Nielsen's 40,000 household panel.
And in the diverse-owned and targeted space, that is a space that has been particularly challenged with the Nielsen panel and under-representation and challenges in measuring smaller networks, cable networks in particular. The big datasets do a much better job of that. Allen Media Group announced a VideoAmp partnership and we’re excited to engage with them on VideoAmp for our negotiations.
