Navigating the New Advertising Frontier: The Buyer’s Market
In this dynamic landscape, a compelling value proposition, measurable impact, experimentation with AI and multi-dimensional returns is essential to stand out.
The advertising industry is experiencing a seismic shift. Earlier this year, during the Upfronts and Newfronts – annual showcases where media companies and digital platforms unveil their upcoming content and advertising opportunities to potential buyers – it was made abundantly clear: we’re living in a buyer’s market, not a seller’s world. In a survey of over 300 U.S. marketers and agency executives, only 49% said they’d be making Upfront deals – down from 56% a year ago, indicating softer ad spending. On top of that, spending is expected to rise only slightly, remaining nearly flat moving into the 2024 season. Advertisers are faced with more choices, while budgets are getting tighter. Traditional boundaries that have defined advertising platforms have dissolved, and, as such, opportunities have expanded.
In this era where everyone is grappling for offsite ad spend to support their bottom line and diversify revenue streams—from platforms like Uber, which offers advertising surfaces on its cars and in its app, to retailers like Walmart, which is pushing into in-store advertising, convenience stores like Walgreens, which have turned freezer doors into paid advertising spots and of course, the streamers who all announced their own version of ad-supported tiers—securing your fair share of the advertising pie is imperative. This becomes particularly true as budgets undergo meticulous scrutiny and advertisers are looking to do more with less. In this new, buyer’s world of constrained budgets and limitless options, a sharp value proposition for “why you” over the multitude of alternatives is a necessity.
To stand out as an advertising platform in this dynamic landscape, consider these core tenets for a compelling value proposition that can guide how you market to advertisers, while also helping you focus on how to deliver internally.
Lead With Flexibility to Help Advertisers do More With Less
In this buyer’s market, advertisers are looking to optimize their spends based on performance, seeking the flexibility to move, adjust, or even cancel portions of their budgets as they attempt to do more with fewer resources. They’re looking for partners who can guide them in maximizing investments across all pieces of their interconnected channels. Beyond scaling budgets up or down, they want to be able to move dollars around to effectively allocate over a wider slate of inventory. For example, in NBCUniversal’s pitch, they highlighted that advertisers can easily shift funds between language markets (i.e., English to Spanish) or from sports to entertainment based on real-time performance.
Measure to Win and Connect to Business Impact
Being a flexible partner also means offering flexible measurement options – a critical capability in today’s ad landscape. Advertisers don’t want to scatter their budgets across various platforms and hope for a favorable outcome. They’re increasingly seeking partners who can demonstrate how investments in their channels drive tangible business outcomes, moving beyond traditional forms of currency – the measurement system used to evaluate the performance of a campaign. In particular, they’re looking for partners with a handle on KPIs that advertisers haven’t traditionally been able to measure, like advanced audience targeting, engagement and attention. At this year’s Newfronts, Disney announced its measurement effort with outcomes-based measurement provider Innovid, tying ad exposures in Disney video to specific outcomes such as web visits or app downloads. This approach transforms a platform into an “always-on,” adaptable partner rather than a one-off arrangement.
Embrace Experimentation in a World of Accelerated AI
While proven strategies remain important, embracing experimentation, particularly in the realm of accelerated AI, is equally important. Digital-first platforms have provided inspiration for innovative tactics to boost value for advertisers. At the 2023 Newfronts, Roku debuted a new “Contextual AI” tool that scans the Roku Channel content library for “iconic plot moments,” matching a brand’s message to relevant parts of shows and movies and placing their ads in real-time. Meanwhile, Meta announced a generative AI “Sandbox” for advertisers, helping smaller businesses create alternative copies and backgrounds while keeping the core message of their ads similar. Most recently, YouTube announced new AI-powered solutions for demand gen, allowing for an advertiser’s best-performing video and image assets to be integrated across touchpoints with the highest traffic and optimizing conversions.
Offer Multi-Dimensional Value and Return
In today’s growing retail media landscape, there is no shortage of advertising options. Yet, advertisers and agencies are looking for more with fewer resources. More reach, more return, more measurement – less juggling, less apples-to-oranges conversions, less headaches. With many of the media giants having the ability to sell at a broader portfolio level and offering consolidated buys, across platforms, formats and audiences, individual platforms and channels will be challenged to offer differentiated value based on the status quo. There will need to be a compelling reason, the ability to reach niche audiences, higher ad performance – anything to make the ad buy multi-dimensional in value, return, and overall fit in an ongoing media model mix.
As we navigate this evolving landscape, the key to success lies in crafting a compelling value proposition that aligns with the needs – and excitement—of advertisers in this buyer-centric world. Looking toward the next Upfronts and Newfronts season, striking a balance between adaptability, measurability, and experimentation will be integral to the narratives of those who end up on top.