Australia is one of the most pro-digital advertising markets on earth, a point that was not lost on the audience at Future TV Advertising Forum Sydney last week when TV and marketing executives gathered to determine whether the ANZ (Australia and New Zealand) television industry over-estimates its worth as an advertising medium or whether marketers in the region are over-valuing, and over-investing, in digital at the expense of TV. Having witnessed two days of private and then public discussions, our conclusion is that most buyers are happy with their digital-TV budget allocation today. There were no ‘P&G moments’ from the major local brands, although agencies were sympathetic to the idea that TV should attract more spend in future and not less. We did get the sense, however, that the region has passed the high-water mark for pro-digital sentiment. ANZ marketers are paying attention to the concerns that P&G, Unilever, Diageo and Lidl have made public, some of which focus on the effectiveness of digital advertising rather than ‘just’ transparency or brand safety issues.
ANZ marketers know that TV is very good at delivering big audiences and fast reach, but they are also ready to make up for any audience losses on TV by finding those consumers in other places. A big challenge for broadcasters is their falling ratings and the reasons for this were debated at length. It is linear ratings that are in decline and the measurement system (OzTAM) does not include broadcaster streaming services in its currency (nor do measurement systems in other countries). The accepted view in Australia is that the ratings decline is partly explained by a shift to SVOD viewing and partly by viewers moving from measured TV (on linear broadcast) into non-measured TV (on broadcaster streaming services, whether catch-up or live). Some broadcasters believe that overall TV audiences will prove to be up once measurement does include multiscreen viewing.
OzTAM already measures streams delivered from broadcaster player services (using the Video Player Measurement – VPM) and these suggest that multiscreen viewing delivers a meaningful boost to total show audiences. Because VPM currently measures streams and not people, it is impossible to prove that the streams represent additional viewers and not consumers who previously watched the programme on broadcast TV. Common sense suggests that most catch-up viewing (or indeed live streaming) represents incremental reach but broadcasters cannot charge advertisers for an embedded simulcast advertisement until they can prove unduplicated audiences. This will only become possible once OzTAM combines the VPM census measurement with its forthcoming multiscreen panel reporting. For the television industry in Australia, total video reporting cannot come quickly enough. This is not just about monetizing online viewers better. It is about getting the credit TV is due and countering the (exaggerated) narrative in Australia that TV is dying.
In Australia, as in other markets, the narrative that develops from press coverage and pronouncements by digital players, is remarkably powerful. We are astonished by the stories (told by agencies privately, in various markets) of how brands/clients declare that they are “now a digital company, so we are focusing more on digital advertising” and how CEOs tell their planners that they must buy more digital simply because they read in a major newspaper that this is the future – without any econometric evidence to decide whether this will be an effective marketing strategy. Sentiment matters – which is why it also matters if pro-digital sentiment has reached its high-water mark in Australia (as it has already in northern Europe and the USA).
Econometrics was on the agenda: there were worthy studies showing how effective TV is as an advertising medium. Discussions often returned to effectiveness, value-for-money and ROI and that will be a comfort to the broadcasters in the room, who are convinced that TV cannot be bettered for delivery of long-term brand awareness, sales and market share. There was very little talk at the event about transparency or brand safety, though they were noted on the margins. Among the larger buying groups, it was effectiveness that was top-of-mind in the debate about where media budget should be spent.
During the last two years, GroupM has made no secret about the importance of commercial TV (and through it, the television content industry) remaining healthy for the sake of media buyers. In Sydney it repeated the message – and its concerns that television needs to update itself and become a more addressable medium. The world’s largest media buyer committed to spending client money on broadcast addressable TV advertising as soon as the technology is deployed – which looks like 2019 with Foxtel/MCN. [Foxtel is the pre-eminent Pay TV operator in Australia and MCN is the sales organisation that sells advertising across 70+ subscription TV channels that air on Foxtel plus Network Ten, one of Australia’s ‘big three’ commercial broadcasters.] GroupM was also predicting that addressable advertising would attract new budget to television.
There are a number of immediate priorities for the ANZ region TV industry. One is automation: the whole process of buying/booking/rescheduling TV advertising is considered clunky and needs an update. There is decent progress on this front. A second priority is to harness first-party, advertiser and other data (like purchase records) to fine-tune media planning on classic linear TV. This means understanding the shows that are most likely to deliver the consumers who are in the market for cars or holidays, for example. This does not require household targeting and can be accomplished in the near-term. MCN is already proving the value of data-enhanced linear buying in the field.
A third near-term priority is monetizing online content better. Seven Network (another of the big three commercial broadcasters) outlined its success in this regard. The company is using dynamic advertising insertion and targeting on its live simulcasts. For a major sports event it can now monetize a multiscreen viewer on the beach as effectively as a broadcast TV viewer who stayed at home to watch. This means the broadcaster can be device-agnostic – which represents a crucial inflection point for any media company today.
A fourth priority in Australia is improved collaboration. This was repeated again and again during the one-day conference at the MCA (Museum of Contemporary Arts) in Sydney. There was not much detail about what form, precisely, the collaboration must take, but the unspoken ‘elephant in the room’ was broadcasters making their linear channels available for addressable advertising once Foxtel implements it. Nine, the third of the ‘big three’ broadcasters, would rule nothing in and nothing out when it comes to addressable partnerships.
Based on what we see in other countries, collaboration could mean any second Pay TV operator in the region pooling its addressable inventory with the first (as Virgin Media has done with Sky in the UK, using AdSmart). It could mean broadcasters agreeing on what their audience segments look like, so that an 18-34 woman who likes outdoor pursuits would mean the same thing wherever you buy that audience target. [The OpenAP initiative from Fox, Viacom and Turner in the U.S. seeks to establish consistency in how consumer segments are defined, for example].
Finecast, the GroupM subsidiary focused on aggregating targeted/addressable television set inventory into a single buying point for the GroupM agency brands, was in town. For them, collaboration would also mean broadcasters and platform owners making inventory available to its system if the concept is introduced in Australia (it was launched in the UK last year with a view to then expand across Europe).
For some, collaboration meant speaking as a single industry about the benefits of TV. Think TV Australia was present, having taken on the challenge to ‘sell’ television to media buyers. It is widely acknowledged that the TV industry in ANZ stood by for a couple of years and let Facebook and Google take control of the agenda, and failed to relay the power of the medium to brands and agencies when under attack. That has now changed: as in other markets (like the UK and Canada) advocacy is firmly on the agenda.
Measurement is the other big priority, which together with collaboration was mentioned more than anything else at the MCA. Connected TV viewing has become a special concern, as this has exploded, meaning living room viewers are switching from broadcast signals to IP streaming of the same content. In doing so, they move into the twilight zone, no longer tracked and counted – and potentially lost as an advertising impression despite sitting on the sofa watching the same prime-time commercial TV, often with their family.
It became clear over the private and public forums at Future TV Advertising Forum Sydney that there is no appetite for very granular targeting of TV audiences in this market. The population size does not allow for micro-segments because the final target audience would be too small. Buyers and sellers seemed to agree that when targeting/addressable does arrive, it will be broad segments they trade against. One example offered was that buyers would target against demographic but then add one or two filters on top – like, for example, chasing an age range and then splitting that into dog owners or cat owners.
Australian TV companies are said to have pursued fierce rivalries in the past – perhaps even more intense than in other markets. They were urged privately to work together to help TV fight against the digital onslaught. This event showed a clear appetite for change but the danger, as ever, is inertia and delegates were urged to ensure that we do not return in a year’s time to find that no progress has been made towards the greater collaboration that will make TV advertising more competitive.
We will be reporting on some of the big individual stories from Future TV Advertising Forum Sydney over the next few weeks. If you are interested in how TV maintains its position as the best advertising medium on earth, in the face of unprecedented disruption, check out our global advertising events here:
Main photo: Guy Bisson at Ampere Analysis kicks off the conference with some competitive analysis for commercial TV – including the impact of Netflix and Amazon in the ANZ region.