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Industry Contributor 9 Feb 2021 - 4 min read

If they value cheap reach above all else, media agency bosses can't complain about ad loads

By David Roddick

The media marketplace has always valued reach over engagement. Now it is being served low quality, low engagement reach in droves, seeing prices set by companies that deny they are media businesses. In that context, can media agencies really complain about the risk of high ad loads?

What you need to know:
  • Paykel Media MD, Sarah Keith, last week warned DOOH and BVOD platforms risked repeating pay TV's mistakes by failing to manage ad loads.
  • She stated: "The result is poor control over the quantity and even the quality of ads, with both formats being crammed full of ads that risk of turning people off."
  • She suggested: "Foxtel is a good example of bad ad load management," and urged BVOD and DOOH players to take control of ad loads by developing alternative models.
  • But the reality is that media agencies, advertisers and media owners can only improve user experience if they all genuinely want to, and are willing to pay to do so.
  • Alternatively, advertisers and agencies can keep chasing cheap reach.
  • But then they cannot complain about poor outcomes.
My Takeout:

Sarah Keith’s recent piece Ad loads: BVOD and DOOH need to avoid pay TV's mistakes seems sensible enough. 

She argues that excessive ad loads on BVOD and DOOH risk driving away the very audiences that make them attractive to advertisers. If you’ve tried watching tent-pole shows on BVOD services, or assume you’d see your outdoor campaign when driving past the digital panel you bought, you’ll know what she means. There’s a lot of clutter in the way.

The suggestion, though, seems to be that the publishers are in total control of ad load and that the clutter therefore comes from pure greed. But this is unfair.

Publishers are not avaricious fools. They know that good consumer experience holds on to audiences, they know the existential threat that SVOD represents and they know how low share of voice limits the effectiveness of outdoor displays.

The trouble is that the media marketplace values reach over engagement. It always has. And now it is being served low quality, low engagement reach in droves, seeing prices set by companies that deny they are media businesses. It feels a little disingenuous to complain about the risk of high ad load in that context.

Cheap hits

For all the progress in sophisticated planning, targeting, attribution and verification, reach – the sheer volume of humans a campaign can get in front of – is still way out front in consideration for media investment. And reach determines price. Clients and agencies are still pressurised, in some cases contractually, to reduce prices based on cost efficient reach. How many times do we hear that achieving low CPMs are built into the agency’s KPIs with clients?

All too frequently, it doesn’t matter how engaging your platform is, how effectively it changes consumer attitudes, behaviours or purchasing habits, it only matters how many people can be credibly claimed to be in front of it. And as buying becomes increasingly automated, arguments beyond price and audience tonnage are going to get harder to land.  

This is the view that I believe Foxtel’s Mark Frain is challenging in his comments about the importance of experience – influenced by ad loads and by content quality – in effectiveness.

Keith points to Foxtel as ‘a good example of bad ad load management’, in that clutter contrasts the ad-free experience viewers get on subscription alternatives like Netflix and Stan. No doubt this is why Foxtel has chosen to limit its commercial inventory on-demand: running no mid-rolls or post-rolls, and limiting pre-rolls to no more than 30 seconds. 

Far from being a good example of bad ad load management both this and the introduction of a twelve second break format on broadcast channels, show that Foxtel is very aware of managing load to retain audience. Surely, on Keith’s logic, these initiatives should generate a CPM premium over ads that run as, say, one of six in the third mid-roll. The trouble is, they almost certainly don’t. 

Money, mouth

The reality is that high-reach, low-engagement channels set the price for every media owner. Channels showing millions of iPhone-shot cat pratfalls and teenage makeup tutorials set the market rate which buyers apply to event drama and water cooler reality shows on BVOD. At such low prices, the only way to cover production costs is to increase ad loads.

It’s the same in outdoor. Buyers want high traffic displays for reach. But will they pay a surcharge for limiting the number of other advertisers they share them with? The likelihood is that share of voice only becomes important when digital audience measurement makes it a lever to drive down price.

Media companies are under pressure like never before. Commuting and movement outdoors has been severely impacted by the pandemic. Content is becoming more expensive and difficult to generate. Costs have been reduced but only revenue will sustain quality content on our screens and innovation improving advertiser outcomes.

So if media agencies want to see vendors protect the audience experience, they and their clients have to look beyond price and reach as measures of effectiveness to support that endeavour. The alternative leads to gluttony for scale at discount prices, driving up volumes to compensate for rate pressure, which then turns off audience and makes scale harder to achieve.

Surely the pandemic has shown how interdependent the media industry is between client, agency and vendor. Each layer is so influential on the others and relies on them for its own success. So if there’s risk in ad load creep, rather than point fingers and issue warnings, everyone should think what they can do in their role to improve it.

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David Roddick

David Roddick has media experience in more than 20 countries and across print, digital, outdoor and TV businesses.  He is former Chief Sales Officer at Foxtel Media and was Chief Revenue Officer at out-of-home company Adshel.

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