tv

The TV Ad Market’s Uphill Battle

The key to TV advertising’s return to normal = a return to production.
article cover

Francis Scialabba

less than 3 min read

Get marketing news you'll actually want to read

Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.

The key to TV advertising’s return to normal = a return to production. As some shows find creative ways to resume filming (see: The Bachelorette), more viable inventory for advertisers comes into play.

But that return is happening at a snail’s pace, with more stops and starts than a middle school field hockey game with a picky ref.

Media conglomerates such as ABC, Comcast, and AT&T reported Q2 earnings last week. One common thread 🧵 on those earnings calls was the idea that COVID-induced production delays will directly affect the success of future quarters, per CNBC.

  • For instance, AT&T—WarnerMedia’s parent company—blamed $2.8 billion in lost revenue on the lack of theatrical and TV releases during the pandemic.
  • It also attributed that loss to the lack of ad revenue from sports.

Two other ⬇️ factors: cord-cutting and budget-tightening among consumers grappling with lockdown themselves.

+1: Sportsball’s absence resulted in a 31% annual decline in overall U.S. media ad revenue in May, per Variety.

Pause, play, pause, play

When LA relaxed its lockdown restrictions, there was a slight uptick in returns to production.

  • For instance, Restaurant Impossible; Diners, Drive-Ins and Dives; Jeopardy; and Wheel of Fortune all resumed production this summer.
  • But other shows, like (ironically) ABC’s The Good Doctor, postponed plans to restart in August due to testing concerns.

Sure, considerations about COVID-19 safety contributed to the messy decision making here. But there’s a larger inhibitor…

Insurance. It’s arguably the factor making it most difficult for shows to resume production.

  • Between insurance and safety measures on set, production costs have increased by 20% to 30% during the pandemic, per Digiday.
  • Network insurance policies often didn’t cover shutdown costs for production in March, putting the networks and streaming services on the line for cash. Unsurprisingly, insurance companies aren’t eager to cover for coronavirus now either.
  • Plus, it’s difficult to get already pricey insurance to cover all COVID-associated costs in the first place.

Bottom line: Yes, production is resuming in some cases, but it’s happening gradually. That means the TV ad market will return at a similar pace—but remember, important as it is, production is not TV’s only obstacle.

Key word: Gradual.

Get marketing news you'll actually want to read

Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.