Why addressable TV poses a bigger threat to TV networks than any video streaming service
The future of television has become a ongoing issue for our industry but Paul Wilkinson argues that the medium’s future revenue lies in buyers being able to buy on demographic and behavioural information.
Disruption in the TV sector raises a multitude of questions such as how will the split between linear TV, SVOD and Catch Up etc play out in the next five years? How will we trade TV? What will be our currency when the TARP goes by the wayside? Will we even call it TV?
But one point stands out to me more than any other: “The future of TV advertising is ‘addressable’.” This is something I’ve heard more and more about in recent months, and as a media buyer, I love the concept.
The ability to segment TV audiences and serve different ads within a common program or navigation screen is obviously a game-changing innovation for our industry. Segmentation can occur at geographic, demographic, behavioural, and in some cases, even individual household levels, granting TV buyers the kind of flexibility (and accountability) previously limited to digital channels.
Paul, Could you explain to me why the few shows that manage to get big audiences – often “reality” shows, encourage viewers to tweet etc during the ad breaks (meaning they are not paying attention to the big screen) . Surely that is a slap in the face for advertisers and another nail in the coffin for the traditional “ad break”?
Perhaps it’s because people tweet to get noticed and voice their thoughts – which in turn are broadcast via the TV screen, part of the incentive is to see your tweet on the screen as part of the presentation
there is always the option to run the twitter feed across the advertising breaks so that the ‘interaction’ is maintained, even during ad breaks – maintaining a visual connection for advertisers ?
Hi Geoff – I’d suggest the idea behind this is to keep audiences engaged with the show in question as opposed to channel hopping. I take your point that it may seem as a slap in the face to advertisers, but ultimately, it’s about building viewer loyalty with the content, extending the presence of the show beyond the living room screen and encouraging conversation across social media – which in turn builds momentum for more people to watch.
Thanks Paul, but I disagree respectfully – I know my younger nephews refuse to watch ad breaks, and I must admit I zap through them, or on the rare occasions when I’m watching live, I head for the kitchen or the computer when I know the ad break is on!
RE: driving social interactivity, I always thought part of it was to attract new (particularly light) viewers to event TV programming through the commentary on social networks eg: people wondering ‘what am I missing’ while they see the social buzz happening?
Good article Paul.
One small thing. You say “Still today, no other media in Australia allows me to reach over two million people in 30 seconds.”
In fact the TV medium can reach more like six million people in the five metros and a further three million in the regionals in 30 seconds. If you only include the commercial FTAs we’re talking around 7 million in 30 seconds.
A top program will get you two million in 30 seconds. And for us oldies – if you road-block you’ll easily get one-third of Australia’s population with a few insertions.
Not bad for a dead medium I would say.
And Geoff, I take it that you and the kids sit glued to all the on-line ads.
No John, I avoid on-line ads – couldn’t tell you the last one I looked at !!!! LOL
Geoff, I’m pretty much the same. The only ones I see are the ones that I am basically ‘forced’ to see (such as ones that pop up in the middle of text I am reading).
The irony is that as CTRs drop to miniscule levels, ad-blocker usage rises, more and more people (claim) to simply ignore online ads, and frustration grows with intrusive ads … that increases the ‘value’ of a TV ad.
So then there’s the flip side of the coin.
1) TV gives broadcast scale, which is vitally important to drive sales by converting light users in many categories QSR, FMCG and the like… Ehrenberg Bass model.
2) In the instances where using TV for more niche/ bullseye targeting is applicable; a broader view of basic marketing principles is needed. i.e. the fastest way to ‘cross the chasm’ of influencers/ early adopters and early majority (gladwell’s tipping point) is a two-pronged strategy…. a targeted campaign to influencers; while also creating a critical mass of predisposition with early majority….. effectively it’s about using both targeted addressable media AND broadcast media in unison.
3) Lastly I think you miss the bigger picture of how FTAs operate; if there’s good money (and shareholder returns) to be made in adding addressable advertising to the mix they will be there. The two you mention both happen to be partnered with global ‘digital networks’ so it’s not a stretch to think this play is just a “table stakes” one so long as the cost benefit analysis stacks up.