Mike Shields, CEO of Shields Strategic Consulting, joins Michael Beach to discuss the convergence of digital and linear advertising, the difficulties in delivering targeted ads, and the challenges surrounding ad frequency. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!
Michael Beach: Hey Mike, welcome to Screen Wars.
Mike Shields: Thanks for having me, Michael.
MB: I’ve been reading your content for a long time, since you were at the Wall Street Journal and then Insider. Can you give our audience more information about the empire you’re building with Mike Shield Inc.?
MS: I started this business on the agency side of things. I was a media planning guy back then. Then I worked as a journalist for about 15 years in places like Adweek and Digiday, the Wall Street Journal, and Insider. And for the last four years, I’ve been on my own, doing all sorts of consulting and helping companies with thought leadership. I also have my own Substack, Next in Marketing, and a podcast with the same name.
MB: What’s the biggest issue you see when you’re consulting with companies? What’s the most common question they ask you?
MS: Everyone wants to do a content strategy, everyone says they need thought leadership, but they don’t know what that means. They think they know what it means, but they have no idea.
There’s a common misconception: Every publication will just take my byline. They think I’ll just write a brilliant column and that’ll be easy to do, but unless you’re Mark Zuckerberg or Sir Martin Sorrell, that’s not the way it works.
If you want to be a “thought leader,” you should read other thought leaders, and get a real sense. With a lot of clients, when they want to start this journey, they don’t really understand what works in this space. They think that their ideas are completely original, when many of them are actually very common. Either those ideas are already outdated, or they don’t have a sharp angle to approach them, and that’s what they would need in this area.
MB: And we know that 99% of the content in the marketing industry is really bad and generic, right?
MS: I hate to say that, but yes.
MB: It’s always the same people who get shares on social media or who write stuff that gets forwards on email. But most of the stuff that comes out of these content marketing teams is just so generic that it never goes anywhere.
MS: And it’s not their fault. Obviously, if you want to be really controversial, that’s going to move the needle, but it’s not necessary. It is really important to have a different point of view, or helping people think about things differently. There’s too much conservatism and fear among a lot of big executives to actually say something that might annoy someone, or make people question the way the business works, but that’s what really helps you break out.
MB: Absolutely. When you look at Next in Marketing, what’s the biggest story or trend you’re following right now?
MS: The hottest stories are obvious. How do we target people online when all the rules are changing? Is there going to be a fundamental rewriting of the rules, and does that change everything, or can we work around it? That’s a huge ongoing story.
The massive shift in television is another big story. A couple of years ago, I wrote about how interruption advertising is over. That was wrong. Advertising is going to play a huge role in streaming and the future of television, but it’s going to change a lot, and the rules are changing. Although there’s a lot of enthusiasm in spending and rushing that way, that’s going to be very messy, and figuring how to make all that work is a massive story.
I was at the IAB PlayFronts some days ago. The metaverse has a lot of potential, and Web3 is crazy. If you look at what’s happening with the younger generations, there is a broad shift to participatory immersive media. I still don’t know if we’re going to live in Facebook’s Metaverse, but, how do the expectations of the newer generation on media, leisure time, and social time, connect to that? Does it have the potential to completely change everything? When will those changes take effect? Those are some really massive stories.
MB: I struggle a lot with that last point. When we talk about video, you can mention user-generated video and narrow it down to mobile, or convergent TV, broadcast cable and streaming. But even the original thing, of just video, could get totally upended because of the younger generation is doing things very differently. When I play video games, I’m totally fine with playing against a computer, but if you look at my kids, they’re always looking to interact with people. They wouldn’t even think about playing an offline game like that.
MS: I’ve seen that with my kids. It’s unthinkable for them to not have a game be social. We haven’t seen that affecting other forms of media yet. There have been a lot of attempts to build co-viewing into things.
We assume that on-demand television and immersive prestige TV is going to be the future, but, will sitting there and just binging a show become dull? It’s a struggle to get my kids to just sit and watch a sporting event with me without them doing something else.
The need of people to have engagement beyond just viewing or consuming is affecting all the media. And this is going to be a challenge to really watch over time. Will this and the next generation’s mindset going to affect the design of everything?
MB: Absolutely. On the TV front, you have a recent piece about the upfronts being messy. How do you think that’s going to look like this year?
MS: An interesting thing in that piece is that, in the last 10 years, linear has been steadily declining, yet the prices kept increasing. It felt like it defied logic, but it was a supply and demand thing. The only way you could reach big groups of people was television, so the CPMs kept going up. It was crazy.
This is just theoretical, but if we ever start using these different new currencies, they’re going to have a pretty wide range. But these buyers have been very affected by those terrible price increases. Are you going to tell them those buyers that the numbers we’ve been basing that pricing on have been undercounting for a long time? Will they feel even more ripped off and ask for some kind of compensation for that? They have been taking a hit for a decade, are they going to be like, “You got to make up for that now?” That’s not going to go well with sellers, and will become a potential source of conflict.
Somebody described it to me this way: Every TV buy is becoming bespoke, which is not the historical way television advertising worked. Buying used to be a relatively easy thing. It worked because you could negotiate deals quickly and scale up fast. If every buy becomes requires you to rely on five different currencies, and work out a really specialized thing, that’s completely different.
My question is, are you looking at a couple of difficult years, where you’re trying to figure out these new currencies, and then everybody figures out and gets into a groove? Or is buying television over time going to become tortuous? I think that’s an open question.
MB: That’s the way digital is, right? You are always trying to gather as much asymmetric information as you could about the seller. If we can buy this inventory for less than what we think it’s worth, that’s a good thing. But with TV, that would break down the scaling, and how easy it is to move so much money.
Another question for you. Do you see new buyers, whether it’s brands or agencies, coming in, or is it the same pool as it was three or four years ago?
MS: It seems to be the same. As much as we talk about the possibility of CTV allowing for the democratization of television, making it like Facebook, and Google, with millions of advertisers instead of the traditional couple hundred that dominate, it seems that the big companies are still dominating. There are direct to consumer brands coming on, and more small & mid-size businesses participating, but it seems like the mechanics of the business are dictated by the big media companies. And now there’s even fewer of them. I think that’s going to change over time, but it’s not easy.
It’s not easy to crack the pool for smaller brands, or for digital brands. Having a creative for television is not something easy that anybody can do. I always wondered if there’s a startup or somebody who could figure out a way to automate the production. There has to be an easier way to make a TV commercial for a small to mid-size brand using AI and the technology we have now, or something like that, that lets more of those guys play in a game where they can’t be in right now.
MB: Agree 100%. They’re on Instagram or social media, where they’re recording with their phone, but they’re not taking that same low production cost to a 15 or 30-second streaming ad.
MS: Right. Instagram, Snapchat, and others, make it very easy to produce a ton of ads at scale, but TV doesn’t work that way right now.
MB: Another thing you and I had a conversation about was YouTube’s earnings. Looking at their end-of-year numbers, we were both surprised that their revenue growth didn’t keep up with their explosive CTV growth. What’s going on there?
MS: I talked to a lot of different people about that and got many different takes on. It still is a head-scratcher to me. The Apple identifier changes have really hit Meta, and they have been very public about it. And it has also hurt Snap in a big way. Some people think that it’s hitting YouTube more than expected. As much as YouTube is trying to push into television dollars, they have a long tail of direct response brands, and maybe they’re feeling the pain from Apple changing the way that you can track people across apps. I’m still not totally sure about that.
YouTube should have a very high ceiling, but it’s hitting an artificial ceiling, where brands are a segment of the advertising world doesn’t think YouTube is on par with television. They’re not benefiting from the shift as fast as they should. Maybe because it’s not thought of as premium to certain advertisers, and there’s still some lingering brand safety fear. It’s puzzling.
The economy is weird and everybody was doing cuts, but broadly, digital advertising is growing. The advertising business and the agencies are all predicting decent growth. It seems severe that the broader pullback hit YouTube this hard. I still think it’s a little bit of a head-scratcher. What do you think?
MB: It’s weird. We’ve done a lot of research and a lot of people put out surveys for a long time about how buying and planning teams are converging. 75% of agencies have converged. We did some recent research that says that around 90% of people are going to increase CTV spend. The answers to these questions are always optimistic, but then you see the results of YouTube, and you see that, in theory, people should cut linear TV at a much greater rate than streaming in this recession. And I’m getting the feeling that, maybe they’re equal, or at the end of the day, people will cut linear less than streaming. Regarding your point about the premium video and how you define YouTube, maybe these teams are not nearly as converged as anyone thinks. The budgets are still isolated.
MS: I think the budgets are isolated. There’s still a lot of talk about being one video group, yet you constantly hear about philosophical and metrics clashes. The people at linear really think a certain way about television, and that point of view is in conflict with the way media seems to be going. It’s still a big issue.
They hang onto the notion that premium is just comedies and dramas, and that’s it, even though someone like MrBeast is absolutely premium to the people that watch it. Whether TikTok belongs in that conversation or not is a different conversation, but there’s definitely a split vote on whether it is really the same thing as watching TV. It’s hard for YouTube to fight those wars.
MB: Absolutely. I got a couple more questions. First, what’s your overall view of the industry? Second, if you could wave a magic wand and change one thing about the video space, what would it be?
MS: We’re constantly talking about this fantasy, with this wonderful convergence of Digital+Television. And maybe that happens at some point, but it’s not realistic right now. You can’t deliver perfectly targeted ads to every individual viewer in every moment. Technology is not even close to being there, and there are so many obstacles in that.
Also, the frequency thing at CTV is terrible. You see the same ad again and again, even on the premium platforms. It’s a mess, and it’s not really well targeted. There’s people throwing up their hands like, “Oh, I wish we could fix this.” But I don’t think most media companies care about it. This is something they could control if they wanted to turn down cash, and they don’t want to do that right now.
They’ll take demand from a bunch of different sources and hope that consumers don’t get too annoyed, but they’re not trying to solve this problem. That’s something that drives me crazy. This seems very fixable if you wanted to have to share some restraint, but most media companies aren’t going to do that right now.
MB: A couple of weeks ago, we talked about the same thing with Howard Shimmel. And he brought up a good point about linear right now, which I don’t hear mentioned often. He said that the frequency and ad repeat process is about to get worse, because there are so many buyers that have a set TRP or GRP goal. And with the ratings declining so fast, they need to buy 20% more spots every year to hit that GRP goal, but there are only so many slots. The CTV problem, is a technology problem right now, but advertisers are repeating it on linear because there aren’t enough spots to hit that GRP target.
MS: Interesting. I wonder if we don’t hear more about that because the people in the industry probably watch a lot of streaming, and complain about CTP, but they don’t watch as much linear, or maybe we just haven’t felt it yet. I’ve definitely sat through many NFL games where you see the same ad over and over again, and it’s annoying. We expect more from CTV. We expect the technology to be able to control it better. It sounds like this problem is going to get even worse than linear.
MB: Excellent. One last question: What’s your favorite question to ask podcast guests?
MS: I ask this question to both podcast guests and with clients on thought leadership. What is driving you crazy about the industry that no one’s talking about that you have a lot of passion for? This is a tricky question. The best stories come when you have a lot of passion or anger, you just really want to get into the subject because you care about it. Those are the best podcast answers, and also you can get somebody to open up. What are you fired up about and what do you want to say? That’s my cheat code.
MB: Excellent. Mike, where can everyone find you?
MS: My podcast is “Next in Marketing.” I have a new partnership with BTV coming up, so you’ll be able to find it there as well. We’re going to do some video pretty soon. And there’s a Substack with the same name available anywhere you are able to receive email. I’m on LinkedIn as well. I’m all over the place if you’re looking for me.
MB: I really appreciate your time. And I know our audience is going to love this conversation.
MS: Thanks so much, Michael, thanks for having me.
See the rest of the Screen Wars Thought Leader Interviews here!
Mike Shields is the founder of Shields Strategic Consulting. Host of Next in Marketing Podcast. Former @BusinessInsider, @WSJ, @Digiday, @Adweek
Cross Screen Media is a leading CTV activation managed service for marketers and agencies, built on a proprietary technology platform that enables advertisers to plan and measure advertising across Connected TV and audience-driven Linear TV at the local level. We seamlessly fit into existing workflows to help agencies scale, differentiate and deliver high-impact campaigns for their clients. For more information, visit CrossScreenMedia.com.
