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At this year’s Future TV Advertising Forum there was a sharp focus on getting advanced advertising concepts into the market and making them pay. Sky Media, the sales arm of BSkyB, gave the world’s first public demonstration of the Sky AdSmart solution that will provide targeted linear advertising starting on Sky-owned channels next summer and you can read the full story about that here. ITV also gave a superb presentation of new ad concepts the company is developing, including ‘overlay’ interactive extensions for ITV Player.
Jon Block, Controller of Commercial, Digital Products at ITV drew gasps from the audience when he explained a separate concept for pre-rolls in front of short-form video that invites viewers to answer a multi-choice question about a brand in order to skip the rest of the video ad. If they get the answer wrong, viewers have to try again or watch the full advertisement! But this is definitely getting people to learn the messages from the brand, he reported.
Block also revealed the power of in-app advertisements that are served to people who are already in a second screen show-related experience. An example is a Rimmel advertisement served to people who are enjoying the play-along game in ITV’s X Factor app, with the app advertisement appearing at the same time that the linear ad is broadcast on TV. ITV has used this concept with different campaigns and, depending on the campaign, 5-15% of those in the app have responded to the app-served advertisement by clicking to engage with the brand in some way. Block made it clear that he thought second screen and interactive TV on the same screen were of equal importance moving forwards.
Shazam gave figures for some of its second screen advertising campaigns, including one unnamed, recent campaign that generated 100% brand recall, not just for the name of the advertiser but the message of the campaign, among those people who ‘Shazammed’. 79% of those who linked from the linear TV ad to the Shazam app engaged with the brand in some way when they got there. 55% of those who Shazammed the advertisement spoke about the commercial to someone afterwards, compared to 25% of consumers who did not Shazam it.
LG and Smartclip also delivered some results from their LG Smart TV Advertising trials, where between 1.3% and 13% of viewers (depending on the product being advertised and the placement of the creative) clicked through from an interactive Smart TV advertisement. Smartclip has sold out the available LG inventory in one of its markets.
SevenOneMedia outlined its new performance indicator for TV advertising that delivers a precise Return on Investment figure for brand advertising, taking into account the long-term impact of converting occasional buyers into loyal buyers. Having studied 26 fast moving consumer brands, the average ROI is 1.9 but it can be as high as 2.9, as seen with an alcohol-free drink, and as low as 1.0, as witnessed with an ice cream brand.
All these demonstrations and results – and this is only a selection of them – illustrate the fact that the market has now moved into the trial phase, if not real deployments, for concepts we have been talking about for several years.
Across the two days of this conference there was a long and hard look at what more on-demand viewing means for the industry, and whether we can earn the same advertising revenue from VOD views as from linear. Given the current and projected growth in catch-up viewing, which is now available widely via television sets, this is fundamental to the health of the TV business.
The consensus on a panel that included Virgin Media, UKTV, Discovery, UPC Ireland, TF1 and OmnicomMediaGroup was that more on-demand will have no negative consequences and will actually provide net gains for the industry, partly thanks to the value of targeting and the potential to attract new money that might have gone to other online media. There were no protests from the audience but speaking with delegates afterwards, it was apparent that not everyone is convinced.
When it comes to the potential for second screen advertising to attract serious revenue, the jury is out. At the main conference and during a Breakfast Briefing on the subject, there was a razor-like focus on whether second screen will deliver the audiences and measurement that advertisers need. Although some people think engagement should be used as a new measure, that does not seem to convince the people signing the cheques.
Everyone is taking this new interactive advertising medium very seriously but the message was loud and clear: we are experimenting, we will need hard evidence that it works and the market is currently nascent. We are surprised at how quickly the focus has turned to the need for hard proof when it comes to the use of second screen apps for advertising. We get the impression that pretty much everyone is convinced by the concept of second screen interaction, so we have moved quite quickly to the question of monetisation.
There were discussions at the conference about how the advertising market will evolve and who the winners and losers might be. Nobody seemed remotely worried about what either Google or Apple might do in the TV market. And when it comes to social media, the mood was that Twitter and Facebook are friends of television, driving interest and creating new audience opportunities, rather than threats.
In previous years, as all these concepts have emerged, the discussions at this event have focused on the threats and opportunities and figuring out what impact they would really have for advertisers and for the rest of the TV market. This year the focus was firmly on the hard metrics, like where the audience is and what reporting we have. We are living in tough economic times and brands, and especially agencies who are under huge pressure to deliver on campaign effectiveness, are willing to innovate but not to gamble.
Notably, the whole ecosystem, including the channel owners and platforms, understand this. There was no sense at any point during the two days in London that there is a disconnect between sellers and buyers, with broadcasters or channels trying to drag resistant agencies into the new age, for example. In fact, everyone seems surprisingly aligned and comfortable with the current pace of change. Everyone accepts that the models need to be proved and that this could take time before they either fail or succeed. Obviously it helps that the current pace of change is so fast that it is unprecedented!
The TV industry has also, we think, realised that it has time to introduce these new concepts. Compared to 2010, everyone is more confident about the future of television itself, not just TV advertising. The TV industry has embraced digital and VOD advertising and so expanded its own toolbox considerably, and now it can combine this, as a complementary offering, with the traditional power of linear messaging.
On more than one occasion at Future TV Advertising Forum we were told to stop thinking in terms of digital or television, or television or VOD, and look upon them as part of the same, larger (and increasingly integrated) offering. The new advertising models will be layered onto the old; they will not replace them. Our conclusion is that the TV industry is much better prepared for the future today than it was just a few years ago. Imagine what might happen now if the world economy finally stirred back to life.