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May 26, 2015
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Regulator tells Canadian television industry it needs STB audience measurement and addressable advertising

The inaugural Future TV Advertising Forum Canada event in Toronto

The Canadian media regulator, CRTC, threw down the gauntlet to the country’s television industry at the recent Future TV Advertising Forum Canada, making it clear that they need to adapt to competition, make more content that can be sold abroad, fight ‘digital’ online video providers on a level playing field, and start innovating more, including adopting advanced advertising technologies that will overcome measurement deficiencies and also enable more addressable advertising. Tom Pentefountas, Vice Chairman, Broadcasting at CRTC, was asked if he was giving the industry a kick up the arse. “I wouldn’t use those words,” he said, but made no effort to counter the assertion.

This was an extraordinary sight: a national regulator telling the broadcast industry that they were leaving money on the table by not measuring their audiences as well as they could, and then listing the technologies it believes will provide the solution.  Pentefountas hailed the virtues of addressable TV advertising including audience segmentation during advertising breaks. He also encouraged the industry to use set-top box return path data to ensure that even very small linear audiences can be measured and therefore monetized. 

The CRTC wants STB data to be made available to broadcasters, not kept behind closed doors as proprietary information that belongs to the platform operators who gather it. Pentefountas said this data should be shared by the industry in the same way that traditional [panel-based] ratings are. The CRTC has ordered a working group whose task is to create the technical standards and work out how the costs of the STB data initiative will be shared.

The Canadian regulator is worried that the broadcasting industry is going to lose revenues to digital challengers and that this will mean less money is available to meet cultural imperatives including home-grown content. Pentefountas noted the challenge for independent broadcasters fighting to get their audiences rated using a panel-based measurement system that is challenged by audience fragmentation in a multichannel world. “Just as the era of ‘Mad Men’ [the television show that epitomizes the old TV advertising world] is passé, so are the measurement tools from the golden age of television when I grew up in Montreal with four channels. 

“We no longer live in a four channel universe and you all know that the 500 channel universe has led to audience fragmentation,” he told the Toronto audience, made up of TV advertising buyers, content owners and platform operators. “Traditional measurement systems are unable to capture these fragmented viewers and how much longer are you going to be able to sell stuff based on an 11,000 home sample? How much longer are you going to be able to sell that idea? Good luck with that one.”

Pentefountas wants broadcaster content to be measured effectively so it can be monetized, which in turn means that advertising dollars can be routed back into Canadian programming and production. It was clear that he thinks the Canadian television industry should have been doing more to tackle audience fragmentation and the danger of under-reporting before now. He pointed to the use of STB return path data in the U.S. “It is out there, it is available so why aren’t we taking advantage of that?” he asked.

“We know that set-top box data is key to the ability of this sector to compete with data-rich [digital] platforms. Why would you not want the same toolbox that the digital world is using and why would you let them eat your lunch when there is this data waiting for you, which would enable you to compete on a level footing with the Facebooks, YouTubes and Twitters of this world? And why does it take so much pressure on the industry to move on this issue?”

He said STB data will enable monetization of previously unmeasured viewership and told the audience: “That is going to benefit people in this room. Think about the money we are all leaving on the table. Why would you leave viewership on the table and not go down the road of addressable and segmented audiences? Linear viewership is down but with these tools revenue does not have to be.”

The comments about advanced measurement and advertising strategies were the most important part of a speech that underlined a determination that Canadian broadcasters should become more innovative. Noting the profound changes in viewing behavior that are affecting Canada the same way as other markets, Pentefountas said the CRTC wanted to foster choice and competition and he encouraged the television industry to embrace change.

He declared: “Protectionism is an anachronism in a world of choice”. He also said it would be unwise of the industry to rely on simsub indefinitely. “The day may come when this is no longer the best tool,” Pentefountas declared. 

Simsub (simultaneous substitution) rules currently mean that if an overseas and a Canadian channel are both showing the same programme at the same time, the distributor (e.g. a Pay TV operator) has to ensure the overseas channel shows the ads from the local Canadian feed for the duration of that show. This means the local broadcasters get to sell the advertising against the show – protecting the Canadian broadcast market. The CRTC has already proposed that simsub should no longer apply to the U.S. Super Bowl, starting in 2017.

 

More information

Do you need to learn more about dynamic advertising insertion, household-level addressable TV advertising and what can be achieved with set-top box return path data as the basis for audience segmentation and programmatic audience aggregation? Check out some of our previous stories below. 

All of these subjects are addressed regularly at the London version of Future TV Advertising Forum, which this year will be at 30 Euston Square on December 2-3. You can find out more information about the London event (which has been running for six years and is the leading strategy conference and networking event in Europe for advanced television advertising) here.

 

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