The death of TV is 'not happening any time soon’: Mediaocean CEO on entertainment amid coronavirus crisis

Mediaocean CEO Bill Wise joins Yahoo Finance’s On The Move panel to address the state of advertising during the coronavirus crisis.

Video Transcript

ADAM SHAPIRO: Bill Wise, CEO of Mediaocean joins us now. And, Bill, I am curious. This shift, I would imagine, has got to be online. Is it accelerating the death not only of newspaper, but maybe even television?

BILL WISE: You know, it's-- it's interesting. TV viewership is up significantly, so up around 21% overall. And, interestingly, I was just looking at the numbers last night. You know, 12 to 17-year-olds viewership is up 43%.

So, you know, people who have been calling for the death of TV, it's not happening anytime soon. We're seeing TV strong, but there certainly is a downturn, which is estimated to be roughly 18% right now in total ad spend. And don't forget, all this great TV content that we have, you know, almost all of it is-- is funded by TV advertising. So, you know, as the market goes down, those media companies suffer.

JULIE HYMAN: Hey, Bill. It's Julie. I wanted to ask you about what you're seeing online as well because I imagine, as we see that decrease in ad spending, there are sort of a lot of ways that's manifesting itself I would imagine, that some of it is companies just cutting back entirely. Some of it is deploying their money in different ways.

So I'm curious what you're seeing on that front. And which industries? One would imagine, for example, that airlines are doing a lot less advertising right now. How are you seeing all of this play out?

BILL WISE: Yeah, yeah, great, great, great question and very interesting dynamics happening. So, obviously, everything in-- in the travel space, airline space, movie studios have all gone down to zero. They've canceled all of their-- their ad buys.

You know, in terms of the budget shifting, we've seen two things. One, all the budgets are shifting to more accountable media, so things where you can measure your return on marketing investment. And the second thing is, you know, kind of cause-based messaging.

So we've seen companies like GM, you know, kind of focused. They're not selling cars right now. Their plants are shut down. But they're now marketing how GM, the great American company, is doing more for the economy now. They're making ventilators. They're going to be back. They're going to be back, you know, just as good as ever. So we've seen a lot of shifts.

You know, two weeks ago we saw a mass flurry in our systems of cancellations, which cause for great alarm. And then what we saw was a lot of those cancellations were just shifting budgets to more direct response-oriented stuff, away from some of the branding. And so we're seeing a lot of shifts. But, overall, the market is still going to be down roughly around 18%.

BRIAN CHEUNG: Hey, Bill. It's Brian Cheung here. Now I'm wondering if you can compare this to what we saw in 2008. Are there certain types of industries that you rely on as kind of the last strongholds to continue the advertising expenditures if you will? Is it often the auto industry? Is it certain types?

I know that this crisis is different than it was last time. So different industries are being hit in different ways. But I'm wondering if there's kind of an inflection point by which you have one industry pulling their advertising, and then everyone else kind of follows suit.

BILL WISE: Yeah, so, if you look at '08, '09, and '10, the market in '09 was down. The advertising market was down roughly 21%. But the Fortune 2000 or, you know, those kind of blue chip brands were only down 8%.

So what we saw in the last downturn are the big brands actually spend through recessions as a way to gain market share pretty efficiently. And, particularly with the growth of Direct-To-Consumer or DTC brands, what we're now seeing is those brands are actually stepping up, continuing to spend, and getting, you know, great media for a highly discounted rate. So that's-- that's kind of what we're seeing.

ADAM SHAPIRO: I am curious. Is there a difference with what you're seeing with the, perhaps, destruction of ad dollars for network TV and local TV? Because a lot of the local TV are now part of larger or smaller chains. Like Scripps is a publicly traded company, Nexstar. What are you seeing at the local level, as far as the ad spend?

BILL WISE: Yeah, so, while as the total ad market looks like it's going to be down around 18%, the local markets are going to be down 40%. So 30% of total ad spend is kind of hyper-local. And that market is almost nonexistent.

So what we're seeing is kind of the national TV is holding strong. A lot of that is bought in an upfront, so a year in advance, quarter in advance. The spot market has taken a lot of hits. And that's pretty much funded by the local market.

ADAM SHAPIRO: A lot of us cut our teeth in local TV, and we appreciate your at least giving us insight into what is a tough situation for a lot of people in a lot of industries. Bill Wise, CEO of Mediaocean, thank you for joining us.