There is high demand from e-commerce and retail advertisers as well as food & beverage producers. The interest in TV advertising is strong, confirms Jan Vlček, CEO of Nova.
The TV Nova group has been reporting a growth in demand for TV advertising since this spring and the interest has been growing every month. For now, Jan Vlček, CEO, does not comment on how the increased demand will be reflected in the price of TV ads on Nova’s channels. However, he indicates that trading the TV ad space for the next year has already started.
Particularly in the second quarter of this year, ad monitoring noticed an increase in the TV ad volume. What is your view of the course of the spring and summer months on Nova’s stations?
We have seen a growth in demand year on year, it has even exceeded our expectations. The trend continues, which means that some TV stations on the market are sold out.
The coronavirus pandemic has made changes in advertisers’ business decision-making and customers’ purchase behaviour. How has this fact mirrored in what advertisers expect from TV advertising?
In terms of market structure, a new business has definitely appeared: a number of clients came from other media types to test TV as a new option. Naturally, e-commerce, predominantly the fashion segment, produced very strong demand. And of course, retail benefited much from the existing situation. Food & beverage has experienced a year-on-year growth, including alcoholic beverages. Operators are also strong as usual.
A new aspect in campaign planning has emerged. The planning time has significantly shortened, we have more ad hoc requirements. Clients were forced to act fast and respond to the existing situation on the market. They expect the same from us. This means that we are markedly more flexible now when planning and booking campaigns.
Advertisers who were more cautious in making year-long agreements for 2021 have already used up all of the yearly capacity. Concluding contracts for additional volumes in the autumn season is more complicated due to the high demand.
What is your solution?
We have no problem with the ad space, there are few of us on the market who have sufficient ad space. But we do not offer any additional bonuses to advertisers who have used up their communication volumes despite the fact that they subsequently provide additional finance. Clients will thus achieve better prices if they guarantee the total amount straightaway. With this approach they get to a more favourable price level.
Has the number of advertisers using TV ads increased compared to the pre-Covid period?
Yes, it has. We see an increased number of entities advertising on TV compared to both 2020 and 2019.
Does this apply to this autumn as well?
The positive trend that started at the end of the first quarter will continue in the autumn.
How can this impact the price of TV advertising for the next year? Information about a double-digit increase is leaking. Can you specify your estimate of price development?
We will announce our business policy for 2022 in October. We certainly notice the signals of market expectations but we are not going to comment on them. Nevertheless, this expectation reflects in the decision of a number of clients to conclude contracts for 2022 now under this year’s price policy.
Will you satisfy the requests?
Of course, deals for 2022 are being made.
What level of sold out ad space do you consider optimal to keep the quality of communication? And what will you do to succeed in maintaining the level?
The optimal level of sold-out ad space is the level that is comfortable for viewers. It is not beneficial for anyone when viewers feel overwhelmed by advertising.
We are doing our best to keep exclusivity of programming and ad space. We are investing in premium content, keeping the planned inflation rate and stable performance. This summer, we were boosting our programme continuously and added a number of premieres. Apart from films, we provided the series Hasiči and premiere episodes of Kameňák. We appreciate that our new owner, the PPF group, supports us in this effort, moving our services to a higher level. It also increases quality and develops content. This year, we have increased our investments in programming by about 30% compared to previous years.
This summer, Nova launched two new paid channels Nova Sport 3 and Nova Sport 4. Will they participate in ad sales? And will the method of selling ads on paid channels change?
Nova Sport 3 and Nova Sport 4 have already been part of the sale and its method has not changed. They are premium paid channels that are not part of TV measurement and are not sold based on GRPs. We are happy to offer our clients exclusive new content including the German, Spanish and Italian football leagues and predominantly the Champions League. We are discussing an increase in the coverage of the stations now. At the same time, we are planning to launch another nationwide free-to-air TV station – Nova Lady. It will be intended mainly for women and will be included in the package of Nova’s measured stations.
What development do you expect in terms of TV ad demand in the first half of 2022?
We have positive expectations concerning next year. TV has long been the strongest ad medium and interest in TV has been growing.