It was interesting to hear the thoughts of the industry at Future TV Advertising Forum (FTVA) in London in December. The event serves as a useful barometer of progress as the worlds of broadcasting and advertising approach a future where video is largely viewed over OTT. I was pleased to find that much of what was said reflects Yospace’s own findings in a report we published recently on the future of live and linear video.
It was clear at FTVA that broadcasters are rediscovering some of their swagger after several years of nervousness around the threat to their dominance posed by major Internet companies, or GAFAN, as they’re increasing becoming known. This year there was a new sense of bullishness about that threat.
Such bullishness is partly down to the noises coming from some of the biggest advertisers and media buyers who clearly still have a preference for live and linear television, citing its mass reach and single point-of-contact trading and measurement. Where else can an advertiser achieve such mass reach through a single transaction?
TV is also a premium experience for the viewer. The incredibly high standards of content, video delivery and reliability are simply unmatched by any other medium. Advertisers are able to deliver a premium 30-second ad in an environment where levels of viewability are extremely high – and not just of the first few seconds of the ad, but its entire 30-second duration.
Compare that with the likes of Facebook and YouTube where three seconds, in some cases without audio, can be enough to register as a view. This leaves many advertisers feeling compelled to get their key message across in the first second. It is far from ideal, but they’re chasing audiences and, as yet, OTT television does not provide mass concurrency and a single point-of-access for advertisers like traditional TV does.
However, while it’s no secret that overall viewing figures are on the decline, if you drill down into the numbers you find that, for the short-term at least, broadcaster revenues are looking fairly secure. On average, the UK viewer watches five hours of TV per day, with the over-50s being the main contributors to that figure. Over 50s watch a lot of TV. They also hold 40% of consumer wealth.
They are the target demographic for many advertisers, so as long as they continue to watch then broadcasters have some breathing space to get their OTT offering right. Breathing space is all it is though, and there should be, and is, still a sense of urgency about translating traditional TV’s USP to the online world. Don’t underestimate the scale of this task.
Centralised infrastructure is required for OTT advertising to allow buyers to trade and accurately measure their ads. This needs to be achieved across multiple video formats, multiple players and an increasingly fragmented array of platforms and devices, each with their own personality On top of this, there is a breadth of new functionality to consider.
Enhanced transport controls with functions such as live rewind and overlays are unquestionably improving the user experience, but they are making ad-tech integrations more complex. Addressability and interactivity represent brilliant advances for advertising, but they also add a level of complexity. It is imperative that technology such as dynamic ad insertion sits comfortably within this modern user experience – at scale, and with high levels of reliability.
For broadcasters, there is a huge opportunity to match, and significantly enhance, the value of their OTT inventory. Standardisation of trading and measurement infrastructure is essential. So too is a joined-up data strategy that allows broadcasters to compete effectively with GAFAN. Collaborations between some of the most unlikely parties is required to make this happen – it was clear from FTVA that many of these partnerships are already being forged.
Broadcasters know that the GAFAN threat is not going away, with Amazon in particular widely expected to bid for major sports rights at some point. If they do, then the data they have access to would help create an incredibly attractive proposition for advertisers, not to mention the links they could provide from an ad directly to a shopping mall. However, broadcasters also have access to data and if they can manage and use it effectively as a collective in the online world then they, too, will continue to be a prime target for ad spend.
Collaborations are in their early stages and a lot needs to happen if broadcasters are to achieve their goal of offering a straightforward route to mass reach for advertisers, with addressability, in the OTT marketplace. It is essential that these goals are reached if broadcasters are to truly establish themselves in the digital age. However, what they have now is a clear sense of purpose. They know the path they need to take, even if, for now, it remains untrodden.
For this reason, broadcasters are right to feel bullish. I suspect that at future FTVAs their swagger will be in full flow – I’m looking forward to seeing it.
Read Yospace’s findings on the future of live and linear video here: www.yospace.com/mtm