CES 2020: What the future holds for advertisers


If you want to know what the future may hold for advertisers, the annual Consumer Electronics Show (CES) in Las Vegas could provide some big clues.

From streaming wars to linear TV and Hollywood to connected TV, marketing bosses are having to learn a whole new approach to spending their budgets in a rapidly changing environment.

Alex Matthews, Marketing Director at global media auditor, ECI Media Management, has just got back from this year’s event.

Below she gives us her insights on how big tech is set to alter the dynamic for advertisers and brands.

Tomorrow’s tech: ECI’s Alex Matthews

CES 2020

“This year’s CES attracted around 180,000 delegates all hoping to discover, quite literally, what the future holds.

For ECI, our interest lies firmly in media, so our time was spent listening to brands, agencies and experts discussing what the future might hold for advertisers.

The New Frontier of Television

Deborah Wahl, Global CMO of General Motors, talked about what developments in TV meant for her brand.

She revealed how GM has reaped huge rewards from the rapidly changing TV landscape – GM’s ad effectiveness has increased by 10% over just three months – and how they are embracing the change by getting their teams comfortable with learning and failing.

She shared her excitement about the future of TV and how the huge amount of data available to advertisers now is helping creativity to become scientific.

It’s delivering faster, better, more measurable results so that creative can be customised in almost real-time, creating content that is better for consumers – and therefore better for brands.

How measurable, provable CTV will attract ad dollars

Lynn Blashford of White Castle, Gustavo Alvarado of Activision and PepsiCo’s Kate Brady discussed scaling success in connected TV (CTV) and what is holding brands back from investing: it receives just 3% of media investment in the US, despite accounting for 30% of media consumption.

CES 2020: Technology is determining the future of advertising and marketing.

Reasons included measurement, high CPMs, a lack of inventory and proven models from linear TV: investment in traditional TV has always led to an increase in sales, and it’s difficult to take money away from something that is proven to work.

Brands are still looking for ways to illustrate success as clearly and quickly for digital devices and CTV so they can start shifting significant ad dollars to these platforms.

What do the streaming wars mean for CMOs?

Innovid’s Tal Chalozin interviewed Rich Greenfield from LightShed Partners about how CMOs can best navigate this new landscape.

Rich noted how numbers for live TV are down by double digit percentages, and even when we do watch live TV we are not as engaged as we used to be, particularly during ad breaks.

That’s true even for live sport, the saving grace of linear TV.

This is partly because the ad experience on traditional TV is not nearly as engaging for viewers as it is on, say, Instagram.

TV advertising has not kept up with the internet and isn’t customisable or shareable.

He went on to discuss how expensive channel bundles are and how they force consumers to pay for channels they are not interested in.

This, combined with a frequently heavy ad load, sends consumers straight into the embrace of the streaming platforms which are cheaper, offer content that they actually want to watch, and allow them to watch it seamlessly across devices.

Rob raised the fact that wealthier consumers are now effectively able to buy themselves out of advertising – so how do we reach them?

Battle of the box sets: Streaming wars are intensifying as we all binge on our fave shows.

The obvious answer is live sport, but there simply isn’t enough to satisfy the demand of the many brands for whom wealthier demographics are their target audience.

It’s a question that has yet to be answered, but integration may be part of the solution.

The future of linear TV

Luma’s inimitable Terry Kawaja took us on a rip-roaring ride through the streaming wars and the future of TV.

He pointed out that the streaming wars have created Nirvana for customers, who have more choice at less cost, and that the future for linear television in the US essentially rests in the hands of NFL.

NFL contracts are up in the next few years, and the big tech companies such as Amazon are getting ready to swoop, as they have already in the UK with their Premier League package – Jeff Bezos himself has said that Amazon wants to use live sports to drive value for prime customers.

The big problem for the linear TV companies? Those big tech companies have a lot more money, and global reach.

In order to defend themselves, the broadcast networks are turning to scale consolidation, direct OTT distribution and CTV tech acquisition – but they need to do it quickly.

An opportunity to bundle streaming service packages

Another key takeaway from Terry’s talk was his prediction that the myriad options available to consumers would in time open up an opportunity for an independent third party to re-aggregate the streaming platforms, bundling up their services in order to make them more manageable – and more affordable – for consumers.

His prediction for who that third party could be? Apple – which could well want to position itself at the top of the TV ‘waterfall’ in the same way that Amazon is for shopping and Google is for search.

Hollywood meets Silicon Valley – but will it work?

One of CES’ flagship corporate keynotes was from Jeffrey Katzenberg, former Disney Chairman and founder of Dreamworks, and Meg Whitman, former President and CEO of eBay and Hewlett Packard.

Hollywood hopes: How will Silicon Valley and La la land converge?

They were unveiling Quibi, the mobile entertainment platform, positioned as the sweet spot where Hollywood meets Silicon Valley.

Quibi offers viewers a ‘revolutionary’ video-streaming technology that delivers portrait and landscape video at the same time and allows creators to take advantage of other mobile capabilities such as GPRS, time, camera and interactivity.

All content is in ‘quick bites’ (hence ‘Quibi’) of 10 minutes or less – so that it can be consumed in those historically hard-to-reach moments on the go.

This means super-short series episodes and splitting movies into ‘chapters’.

A lot of emphasis was placed on the opportunities that this platform represents for advertisers, especially the fact that it specifically targets the hard-to-reach millennial generation.

Their low ad-load will also no doubt appeal to ad-weary generation Y.

Quibi’s first-year advertising inventory, worth $150m, has sold out with many world-famous brands on the roster, including AB InBev, Procter & Gamble, T-Mobile and PepsiCo; the latter was invited on stage to talk about the innovative, collaborative creative process and the brand-safe, brand appropriate environment.

Short form hopes

Quibi is undoubtedly an innovative new streaming platform and the idea of creating short-form video content for the on-the-go generation is a good one, but some questions remain.

In the age of the streaming wars, how will this young start-up fare against established competitors such as Disney, Netflix and Warner?

And will viewers really want to keep flipping their phones while they are watching a show to get the full Quibi experience?

Furthermore, with content costing on average $100,000 a minute to produce and with plans to deliver a huge amount of content, is the business model sustainable?

Quibi launches in April – so time will tell.

Other key themes

More broadly, key themes on everyone’s lips at CES were 5G, consumer experience and privacy.

This was the guiding principle behind much of the innovation that we saw at CES.

The explosion of 5G and focus on the consumer inevitably lead the conversation towards data privacy and security. GDPR and now CCPA (California Consumer Privacy Act) have affected the type of data that marketers have at their disposal, meaning that there is an increased focus on how best to harness first party data and on contextual advertising.

Of course, the focus for all brands is the consumer – but as consumers move from desiring products to valuing experiences brands are also shifting their focus.

The number of non-technology brands in attendance at CES was impressive this year, for P&G, PepsiCo to Delta Airlines and Mastercard – a true indication of how important technology is to all business, and its power to enable them to connect and add value to their customers’ lives.”