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Give us bigger ratings and advanced ad-tech, and ad money will flow back to TV, says GroupM chief

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“The so-called Golden Age of TV is pretty much ad-free.” That was the assertion of Neil Johnston, Chief Trading Officer for GroupM Canada, as he bemoaned the fact that must-see content is increasingly appearing on HBO, Netflix and Shomi (the Canadian SVOD offering), services that do not rely on advertising. “Most of the content on Netflix and Shomi was originally shown with advertising but when it shows up on these services there are no advertising messages,” he pointed out, highlighting a concern among marketers that audiences are being taken out of their reach.

Speaking at Future TV Advertising Forum Canada last week, Johnston then called upon the television industry to produce more hit shows to deliver the big audiences advertisers want. Focusing on the Canadian market, he hailed the output in French Canada where Canadian-made programming, he claimed, gets double the ratings you can expect in English Canada – where 15 of the top 20 shows are bought-in from the U.S., where ratings are declining year on year compared to French Canada, and where the U.S. shows will later be destined for Netflix and a life of ad-free catalogue viewing.

“French Canada is delivering pretty much what advertisers are looking for – big ratings content that we can get close to. If you make more and better English – and French – content, that will solve the decline in TV ratings.” He suggested this in turn would make the future of ad-funded television more secure. Johnson said the ability to target discrete audiences using addressable TV is a good thing but fundamentally advertisers want TV to deliver them high reach as cost-effectively as possible and that has become harder in the last 20 years.

He had a warning for the TV industry and then some encouragement. “TV does not always deliver resounding value and that cannot be ignored. Advertisers do not want a high-cost future of TV. TV needs to improve its offering to take on the likes of Facebook and Google who in some areas are dominating the conversation. Those big players want to eat some of television’s lunch.

“Advertisers want a little of the best of digital from TV, like targeting,” he continued. “We want TV to become a little more like the rest of the digital universe that we operate in, and it needs to become a little more programmatic. Buyers and sellers need to react faster to business needs and to the results seen earlier in a campaign.”

Johnston highlighted the need to make trading easier and more electronic, and highlighted the need to introduce richer data and make use of multiple data methodologies without compromising the value of single-source measurement and an established trading currency. But he told the Toronto audience that the opportunity for advanced TV advertising has barely started in Canada, so there is a chance for the TV advertising industry to get ahead of the curve and sort out any difficulties early on.

He noted that addressable TV advertising, when it does arrive in Canada, will not appeal to every advertiser, especially as it comes at a premium. “But there are some advertisers who are raring to go with this,” he added. And he indicated that GroupM, which is one of the world’s most important TV buyers, would increase its budget for TV advertising (he half-agreed to a figure of 7% that was put to him) if increased ratings were combined with more advanced ad-tech like addressable.

“Yes, I believe that could happen. For the last few years money has been coming out of TV and going into digital, directly or indirectly. If TV was a bigger medium, driven by the content side of things, then more advertising revenue would go there. And if it is more addressable and more data-driven and real-time then money would come in from digital to supplement TV budgets.”

The 7% figure was put to Johnston because he outlined what appears to be a correlation between advanced ad-tech and a growth in TV ad revenues in different markets, and TV revenue is up 7% in the UK this year, which is considered the second most advanced in terms of ad-tech developments.

GroupM used Videology data to determine the most advanced ad-tech markets and cross-referenced that against its own ‘Now and Next’ forecasting. The most advanced ad-tech markets were listed as the U.S. (ad revenues up 2.3%), the UK (ad revenues up 7.4%), Australia (up 1.0%), Belgium (up 1.2%), the Netherlands (bucking the trend with a downward trajectory of 1.5%), Ireland (up 6.4%) and Denmark (up 0.7%). The Dutch decline has been attributed by some people to the fact that the country’s football team did not qualify for the UEFA Euro 2016 championships.

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