Broadcasters are fighting the threat of advertising money being syphoned to the web by converging online advertising technology and techniques with mainstream TV advertising. In doing so, doing they claim to have tapped new revenue streams bolstering TVs future.
There has been considerable buzz about the rise of digital video advertising, a widespread perception that people no longer watch TV and that advertisers will follow the eyeballs online where targeting is apparently so much easier, Jill Hind, COO, Enders Analysis told IBC. We believe that TV will remain the dominant way to view video for many years to come.
Figures from GroupM show that TV revenue is growing in real terms although the year on year increases are slowing. TV spot ads will actually rise 5% in 2015 in contrast to online video advertisments which will rocket 50% in 2015, but from a significantly smaller base.
Enders research reveals a marked decline from 2010 in TV viewing, with decline driven by younger age groups, but predicts that linear TV will still be at 77 % (from todays 98%) in 2020. Another 8% of that total will be from catch-up watching the main TV and Enders also suggests that viewing of video on smartphones and tablets will be dominated by content from the main broadcasters.
Jamie West, Director, Sky AdSmart & Commercial Development, argues that the TV advertising market needs to be shaken up. We can compete on a level footing with digital media that claims to be the only market that can offer addressability, targeting, reporting and understanding return on investment.
TV trading across the world operates just as it did in the days of Mad Men, he suggested. It trades in the UK against a dozen regularly used target audiences. Sky Adsmart turns that on its head.
Sky Adsmart is the payTV broadcasters addressable advertising service.
Adsmart is all about moving the conversation from competing with TV to competing with the full media mix, he explains. TV advertising in the UK is worth £4.3bn he said but Adsmart competes in a £8.3bn market.
This is because the technology which has taken 5 years and £100m investment is able to access new revenue opportunities from online retailers, insurance and banking as well as local businesses like car dealers, estate agencies and regional theatre tours.
Sky is currently ramping up its ability to target advertisements across multiple platforms and this month it is taking a further step by allowing advertisers to deliver advertisements to Sky homes based on the first two letters of their postcode - much more precise than a national or even a regional buy.
This means we compete on a level footing with regional and local media, he stated.
Rikard Steiber, EVP and Chief Digital Officer at Swedens Modern Times Group is also optimistic about attracting new revenue to TV.
We recognise that there is another pile of money from brands who dont advertise on TV, he says. This is an opportunity for broadcasters to offer a chance for those advertisers to connect to their audience through our media.
Programmatic buying the automated trading of video inventory is gaining ground quickly. With programmatic, the brand doesnt talk to media sales people any more. It is like a trade index for stock. There will be a number of new currencies to buy. Broadcasters should be helping advertisers to do realtime bidding, programmatic buys and providing the metrics they need to measure the effectiveness of their advertising.
Doubts are being thrown on the validity of online data. The share price of AIM, listed online advertising company Blinx, fell dramatically in February year when allegations were made in a blog about irregularities inflating Blinx advertisements viewing figures. Although the allegations were proved themselves to be grossly inflated, if not outright false, Blinx attributed a stock warning in July to more general industry-wide issues of efficiency and effectiveness compounded by the accusations.
Hind identified concerns about the quality of digital inventory and the transparency of online ad campaigns as blocks to the growth of online video advertising.
Online has huge a challenge to reach its true potential, she says. There is a knowledge gap where marketers and advertising agencies often dont seem to understand the full potential of online advertising and programmatic buying.
Another challenge is the lack of a shared audience measurement system which enables a shared trading currency.
As viewing and money moves away from the TV set it is incredibly important that both broadcasters and advertisers get to understand their overall audience and how effective their campaigns are, she says. Project Dovetail from UK ratings agency Barb, will be a significant boost to the UK online sector when it is finalised in two years' time. she said.
Will online be fighting TV for every last penny of the ad budgets? They fulfil different functions now and probably always will, she said. TV is about bringing mass audiences and widening the field of opportunity for brands. Online is very different. It reaches audiences at the right moment, it builds relationships and gets them to act.
Steiber concludes: There is an opportunity for broadcasters to bag new money. But the proposition must be about combining TV with the digital to offer advertisers the power they need.
Follow the conversation on IBC VOD: New Advertising, New Money where is the pot of gold at the end of the new-TV rainbow?
Following the Viewer: Audience tracking and measurement in the digital era
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Broadcasters are fighting the threat of advertising money being syphoned to the web by converging online advertising technology and techniques with mainstream TV advertising. In doing so, doing they claim to have tapped new revenue streams bolstering TVs future.
