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STIRRing Up Local TV Advertising

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While many aspects of advertising were hit hard by the COVID-19 shutdowns, streaming advertising (also classified as digital video advertising) is behaving the way Robinhood traders think about the stock market—ever up and to the right. Sinclair Broadcast Group's STIRR is out in front of that trend.

Sinclair created STIRR a couple of years ago. The business idea is brilliant, but the implementation is still buggy. STIRR provides consumers with free, live, local TV news broadcasts (if they're in a Sinclair market), as well as local sports, on-demand movies, and live linear niche channels devoted to cooking, game shows, pranks, old TV series, talk shows, financial news, and lots more to deliver average view times of 51 minutes on CTV and 30 minutes on mobile. 

STIRR advertising targets local viewers, so Boston viewers will see Boston businesses' advertisements, even if they happen to be in Los Angeles when watching Boston content. As viewing on streaming went up, CTV advertising grew. Insider Intelligence research identifies that spending on digital video ads grew at double-digit rates during 2020, and ad spending on CTV in particular will increase by almost 50% this year. Brands are looking to advertise on streaming outlets, and for now, it seems that when they think streaming, they think local TV stations.

"The CPMs on local are so much higher than they are on a national basis for OTT," says Adam Ware, VP and general manager for national networks and platforms at Sinclair. BIA Advisory Services has pegged the 2020 OTT market for local video advertising at $990 million, out of an estimated total local TV ad revenue of $19.7 billion in 2020. While OTT video advertising is a very small percentage of total TV ad spend, it's also nearly $1 billion, which will help pay off the investment that companies like Sinclair have made in local media OTT with STIRR. 

"We're programming STIRR as if it were a television network with local affiliates," says Ware. So live local news runs at the same time the local broadcast does. After the local news, when a broadcast station would go to national network news, STIRR has an open time slot. "What do you put in that half hour? Well, you need to put something that first of all feels right, and second, is an opportunity for an advertiser," says Ware. "There's no way they can buy a half hour of [what] is sitting between newscasts. You could never buy that environment on traditional TV." So there's the potential for a half hour of local programming, sponsored by a local business, for example, but there's also the opportunity to test out something bigger.

STIRR also has fully sponsored stations, like the Horse Shopping Channel (HSC)—think the Home Shopping Network, but all things horse-related. It started locally in Texas for a company that auctions horses and grew to include a lot of adjacent content, like Westerns and reality programming. HSC is now available to viewers all over the U.S. "What STIRR is trying to do is create new types of ad opportunities for advertisers that want to do more," says Ware. 

Another focus of STIRR is an environment to place future content for ATSC 3.0 delivery. When ATSC 3.0-enabled TVs become widely available, the content that's now on STIRR could be found on your new TV. In other words, Sinclair is developing the environment for more TV channels without having to seek the traditional broadcast spectrum and is creating opportunities for advertising revenue that didn't exist before.

A few years ago, a friend of mine said that local news is in danger of being replaced by two guys in a garage with some really good social media skills. Sinclair has created an environment to ensure it is out in front dealing with broadcast viewer declines, FAST channel entrants, and digital-first companies. 

If Sinclair tweaks STIRR and really gets focused (and maybe comes up with a better name), it will have absolutely found a way to crush those two guys in a garage, while providing dollars to the local stations, growing new markets, and preparing for the ATSC 3.0 broadcast future.

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