Until Google, Facebook and other digital players get away from their “walled garden” approach, advertisers will continue to find it difficult to look at these popular outlets.
That’s the bold view of CBS Corp. Chief Research Officer David Poltrack, who spoke opposite T-Mobile CFO Braxton Carter at the 44th annual UBS Global Media and Communications Conference in New York.
With a packed agenda that saw opening remarks at 7:20 a.m. from UBS Managing Director/Media & Entertainment Doug Mitchelson precede a keynote panel featuring Adam Smith, Futures Director of GroupM; Vincent Letang, EVP/Global Market Intelligence at Magna Global; and Vittorio Bonori, Global Brand President of Zenith, attendees soon learned what CBS Corp. really thinks about its digital competitors.
Poltrack singled out YouTube, in particular. “It has a high CPM, yet we see no evidence to justify that,” he said in response to an attendee’s question on how CBS Corp. can continue to attract advertisers as digital media continues to grab a greater share of CMO’s ad budgets.
Again talking about YouTube, Poltrack said, “The ads work just about the same [as they do on TV], but advertisers are paying extraordinary premiums. There is no justification.”
As far as digital ROI from the use of YouTube, Poltrack believes advertisers can’t tell if there investment is truly as beneficial as it is for television campaigns.
The comments from Poltrack followed his announcement that CBS will experience flat revenue in 2017. This is welcomed news for investors, as Wall Street consensus estimates had CBS seeing low single-digit revenue dips.
Thus, the underlying growth rate for 2017 is expected to be 4%, rather than 5% — matching what was seen minus Olympus-related advertising effects in fiscal 2016.
Why the revisions from Poltrack? Dollars from marketers are going to advertising, rather than promotions.
This makes his digital comments all the more impactful as he said CBS saw substantial benefit from big premiums in the post-Upfront scatter market for 2016-2017.
Meanwhile, Poltrack also addressed a UBS attendees query about programmatic by saying advertisers will embrace the targeted segmentation of viewers afforded by programmatic buying, and use it to more effectively target consumers.
This will help to continue bringing a steady stream of dollars to television without taking it out of the digital budget.
It can also prevent the reverse from happening, Poltrack noted.
“You don’t take money from one and put it in another,” he said.
