An Insider View of the US Advertising Market

How would you summarise 2020 and the beginning of 2021?

Two words: challenging, but incredible. However, despite the turbulence of the socio-political context it was also surprisingly stable – budgets remained very similar from 2020 to this year. This evidently was not the case for all industries – travel massively suffered whilst streaming saw explosive success. One of the big changes we saw was the speed with which projects happened; there was a huge demand for fluidity and flexibility in the world of media because there was a constant need for change.

Media consumption grew across all platforms, but are there any that saw significant benefits?

Streaming saw a huge turnover with numerous people subscribing to accounts, some for only a couple of months to take advantage of the initial deals, whilst others opened several accounts and became ‘multi-streaming channels’.

Did advertisers take advantage of this explosion in streaming?

This depended on the advertiser– older, more traditional industries maintained their established expenditure balance between TV and digital, whilst newer businesses or those with a younger audience, shifted almost completely to streaming. In comparison with the past – when streaming was purchased separately to TV, as an add-on – we have recently seen a shift to the purchase of packages.v

American TV is replete with advertisements – does this affect consumption?

Although it’s true that ad breaks in the US are often longer than the TV segment itself, this doesn’t affect consumption. However, lots of planning is re­quired in order to not show the same advert too frequently in the space of one show. Oversaturation of the same advert negatively affects customer engagement with a product or brand. It is for this reason that smaller brands without the means to access prime advertising spots who are forced to oversaturate their adverts often suffer. This general trend has greatly benefitted streaming services which tend to have a much lower incidence of adverts.

Did the American election impact activity in the advertising industry?

Yes and no. There was a huge but saturated increase in demand for news coverage which meant prices inflated; the Cost per Click for buying advertising space on Twitter practically doubled. However, what had an even larger impact on the industry was the Black Lives Matter (BLM) move­ment. It has completely uprooted the way advertisers think, com­municate and buy. Many brands have changed the way they make purchases in order to support BIPOC communities and funnel money back to black crea­tives – Snapchat insists that a significant part of its digital US budget is spent against BIPOC creators and networks. This revolution is anchored in history, so we hope this shift to ethical consumerism will be a long-term change. OMD has been a champion of diversity for a long time and is at the forefront of this movement that is attempting to reconcile the economic divisions between communities despite political inaction.

What do you predict will be the economic trends for 2022/23?

I reckon that streaming will continue to grow in popularity and will be bought together with TV. The biggest challenge the future holds, which emerged before Covid-19, is the development of new technologies which allow for ‘mass-personalisa­tion’. Big brands can access the tools needed to gain nuanced insight into their consumers’ habits allowing for closely targeted ads. Small businesses without the funding to access these new trends will suffer.

What is the average split between investment in TV and digital by advertisers?

This depends on a multitude of things, but in general, older, more traditional establishments main­tain a 50/50 split. Meanwhile, new emerging companies tend to have a split of up to 80% balance to digital. It completely depends on who is advertising and how they access their clients.

What new media has the potential to emerge and be successful?

Streaming will obviously grow, but in general it is quite difficult to say. Without wanting to toot my own horn, Snapchat is one of the current leaders in the industry. It is moving away from being just a social media platform to become a multi­faceted platform, streaming its own content and introducing new technologies and experiences to users. For example, the company is launching a new technology that will act as the future image search engine, and new lenses that let the users try clothes from famous stores and then buy them online (a new interactive shopping experience). In fact, what we will likely see happen is that new media will not emerge, but the certain current players will triumph and become global powerhouses.

What are the main challenges and top priorities of brands today and how do they need to evolve?

The key for brands today is to catch up and keep up. Successful brands, like Snapchat need to consolidate their audiences in places where they are already popular and try and obtain a greater market share in places where they don’t have the same audiences. In the last year businesses have suffered massive economic losses. Going forwards, brands need to adopt a policy of adaptability to effectively respond to any crisis.

How have you adapted to overcome these challenges?

New challenges are constantly emerging, so the OMD strategy teams have developed new processes that allow us to rapidly analyse and understand crises in less than 24 hours to update our buys and strategies that are currently in-market; bringing us immediate flexibility when needed. /