When Disney removed itself from the linear television landscape at the start of this month (its Sky Cinema partnership withstanding, for now) it was marked as a move that had a lot of toy industry people asking the same question: Can linear TV sustain the level of spend from toys and games brands as before? Here, Generation Media’s Jonathan Chambers explores the questions and set about looking for an answer
As of October 1st 2020, Disney ceased to have a Linear TV operation in the UK (beyond its Sky Cinema partnership, for now at least). This follows years of double digit audience decline, and the movement to wholly control and monetise their own content via the introduction of Disney+.
It’s a move that now has a lot of people asking: Without the presence of Disney channels during the key season, can Linear TV sustain the level of spend traditionally deployed by Toys and Games brands in Q4 2020?
Before we can begin to answer how important Linear TV will and should be, we need to ascertain what spend levels could be, given the volatility that has been imposed on the market by COVID-19. H1 was significantly disrupted by the initial uncertainty which saw April (-44 per cent) and May (-35 per cent) contribute to a 19 per cent decline in total TV activity from Toys and Games brands (recorded as Actual CH 4-15 TVRs).
While there was an initial display of confidence from the Toys and Games market when lockdown eased in July ( +20 per cent), this did not translate to a positive Q3 with August finishing at down 36 per cent and September reporting a decline of 25 per cent to September 8th.
Pricing mechanics mean that actual expenditure levels are likely to not be as negative as this, but it is certain that Linear TV spend will be down year-on-year. In fact, we are estimating Q4 Linear TV budgets will finish around 13 per cent behind 2019.
When you consider that in H1 of 2020 Disney only accounted for eight per cent of commercial impacts (on children’s commercial channels), it initially appears that Linear TV should be able to sustain the forecast reduced level of spend quite comfortably. However that assumes audiences will maintain year on year, which from studying the trends of recent years and even months, we know will not be the case.
Q3 to date (July 1 to September 8) has seen Sky Kids report a decline of 23 per cent (CH 4-15 equivalent impacts), CITV down 44 per cent, and Turner down 13 per cent. Ironically, Disney actually reported a growth of 11 per cent with September not only proving to be its strongest month of the year to date, but also proving positive for Turner channels.
This is in direct contrast to the pattern of previous months and years, when growth has been the preserve of Free To Air (FTA) channels such as Pop and CITV. The overall prognosis, however, is that there will once again be double digit decline this Q4, meaning that Linear TV alone will not be able to sustain Toys and Games marketing spends.
However this is nothing new. We have been navigating clients through the evolving video landscape throughout the past decade. This journey has been underpinned by the revolutionary viewing data provided by Giraffe Insight’s Kids and the Screen study. 2020’s first wave of data reveals we have now reached a tipping point.
Live TV (23 per cent share of viewing occasions) is no longer the number one way in which children consume content, having been surpassed by both SVOD (Netflix, Disney+, etc.) and Free Online Video (YouTube, TikTok) with a 29 per cent and 23 per cent share respectively.
Netflix and Disney+ are fantastic marketing tools for brands with licensed products, but for the vast majority they remain non-commercial avenues which eat into our commercially viable opportunities. However the thirst for Video On Demand does indicate a potentially bright future for AVOD and BVOD platforms, be that traditional players such as Sky and Virgin, or emerging partners like Kidoodle, Ketchup and Roku.
YouTube though will be the most viable supplement to Linear TV and despite the declines in Linear, we expect more brands than ever to be active on YouTube this Q4. Historically using data to target children on YouTube has been problematic which has reduced targeting efficiency.
To combat this, we are now overlaying Kids and the Screen into our proprietary DMP – Precision. All of the data ingested into this platform (including over 3 billion data points from over 2,000 campaigns) is completely free of personally identifiable information meaning it is fully COPPA and GDPR-K compliant and ensures we can overcome any brand safety concerns whilst still delivering high value inventory at cost efficient rates.
So this Q4, we will reach a tipping point when Linear TV is no longer the number one way in which children consume video content, but the same will not be true of spend. This tipping point could likely come in 2021.
Currently TV and YouTube are comparable in terms of cost (during Q4 at least), but TV commands the higher share of spend due to its history of delivering sales for Toys and Games brands and the ability to deliver mass reach at a faster rate. As more case studies for the effectiveness of YouTube are established, and TV audiences continue to decline, it won’t be long before we see this reversed. Or of course, it could be disrupted entirely which by now we are as an industry well versed in.
TikTok should prove their credentials with a brand safe ad platform as a result of their partnership with data giants Oracle (accurate at time of writing), and rumours will still persist that Netflix will commit to a commercial model of some sorts.
To keep up to date with the latest viewing trends and the impact they will have on your marketing mix this Q4 and beyond, get in touch via firstname.lastname@example.org
Sources: Giraffe Insights Kids and the Screen, BARB