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Industry Insights Xandr Marketing

The evolution of the TV customer

By Austin Scott, Head of video market development


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March 30, 2021 | 7 min read

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At its conception in the 1930s, TV was considered a novelty with much technical advancement needed to take analog viewing mainstream. Adoption was slow to start with, radio being where consumers’ favorite shows were aired. It wasn’t until the 1950s when many radio programs transitioned into television shows that this format really took off. Major brands were shifting their advertising spend away from audio and into TV to reach the consumer masses with a specific message or promotion of a single product. Consumers were soon glued to their screens, the TV set becoming a ‘way-of-life’ and a dominant form of entertainment.

With the emergence of new content channels, viewers suddenly had an entire universe of programming choices

With the emergence of new content channels, viewers suddenly had an entire universe of programming choices

TV broadcasters saw competition for consumer attention from new cable, premium, independent and public channels. Fast forward to the rapid adoption of the internet, which saw even more change and disruption. As more consumers moved to internet-based content, advancements in technology meant that consumers could bring their favorite shows with them while on the move. Analog TV’s deprecation has been in progress since the early 2000s and in the last 10 years digital transmission was suddenly in everyone’s hands. Across Europe today, there is an estimated 8.9 connected devices[1] per capita, resulting in more data than ever and more individual touch points. With content now so easily accessible, consumers demand a more relevant online advertising experience in return for their attention. The value exchange must improve consumer experiences so how can advertisers achieve this?

From broadcast to choice-first programming

With the emergence of new content channels, viewers suddenly had an entire universe of programming choices, catering to various interests, cultures and desires. Consumer access points expanded, consumption preferences changed, and viewers wanted more control over what they watched and when they watched it. Video cassette recorders (VCRs) were the first devices to allow consumers flexibility to watch a diverse library of content on their TVs at a time that suited them or even record shows before the days of DVR. This paved the way for other devices, more recently the video on demand (VOD) and subscription video on demand (SVOD) channels we enjoy today. The modern-day digital video consumer is now more in control of their viewing experience than ever before.

What does this mean for advertisers?

Once two separate worlds, traditional TV and digital have now collided, transforming the future of TV for viewers, media owners, advertisers and their buying agencies. Traditional linear viewing, while still relevant, is declining, heavily influenced by the popularity of VOD, SVOD and the various internet-connected viewing devices (connected TV, other OTT devices and social platforms). The opportunities for advertisers operating in the new digital video landscape are vast, once they have understood the components of this new world on a local level. The current EMEA digital video landscape is a familiar case study of fragmentation, made up of a diverse patchwork of distinct national media ecosystems and users with multiple device options.

In France, the CTV opportunity has a slower adoption than in other markets given the preference here for IPTV (internet protocol television) among local broadcasters. Germany is a similar evolving market with a strong viewer privacy sentiment and a landscape in which publishers are particularly powerful, while the UK is an accelerated on-demand market where national broadcast networks are striving to create new platforms (BVOD) to attract and retain viewers and advertisers among heavy competition. As this new era progresses, it will be interesting to see what role the options of global OTT services such as apps or buttons on remotes take when it comes to how audiences can access content moving forward in local markets.

The advertising opportunity

With brands eager to reach the right audience, they are beginning to turn their TV strategies towards programmatic – a move accelerated through the eyes and preferences of the consumer. With consumers willing to accept advertisement in traditional TV, CTV brings the ‘best of both worlds’ for marketers, combining the scale of attention that we see in traditional TV with the precision and flexibility of digital. Across Europe’s biggest markets, approximately 40% of all internet-enabled and TV households own a smart TV, increasing to reach 50% CTV viewership when you add streaming devices and gaming consoles[2].

CTV also offers a variety of ‘free-to-view’ content. With subscription fatigue a real threat to ad-free channels, more and more CTV viewers say they are happy to watch ad-supported content versus increasing their subscriptions. This makes it a natural home for advertising and when combined with the effective targeting methods of programmatic, consumer attention is given by default. On-demand viewers in particular who are actively choosing what to watch leads to a higher dwell time for advertising. Driven by real-time data, marketers are able to achieve precision targeting at local, household or even device-level. There are changes coming as we move away from third-party cookies and towards consented data. Marketers can make use of their first-party data from their own customer relationship management (CRM) tools, transaction records and online data, such as website visits, to identify when and where to meet their desired audience in better partnership with publishers and data owners.

The digitization of the TV-buying workflow in time will ease trading and improve ad experience. As we know from the early days of programmatic, overuse of retargeting can be a brand-killer and a waste of valuable advertising budgets. Fortunately, typical video consumption isn’t at the same volume as page view and there are controls available within the CTV landscape that allow ad buyers to cap a specified maximum number of times ads are played to a viewer, maximizing campaign efficiency. With the ability to activate, optimize, report and adjust campaigns in real-time, ad buyers can change their creative messaging or spending commitments far quicker than through traditional TV mechanisms, making it opportunistic on performing media. In light of the recent need to adapt quickly to change due to a global pandemic, this flexibility proves invaluable to marketers being quick to react to public sentiment.

The future is ad supported

According to Xandr’s 2020 Global Relevance Report, at least half of the advertisers around the world are using precise targeting to deliver better video ads. The new TV horizon has a programmatic philosophy of sustainable, optimized marketplaces for TV commercials, transaction models, ad delivery methods and units of measurement, no matter the device, to power an ecosystem built on relevance. To capitalize on growth, marketers must continue to educate themselves not only on the CTV ecosystem but also the value of audience-based buying and the ways in which their technology partners can help them to navigate industry challenges and unlock the full CTV opportunity as their local consumer viewing habits evolve.

While TV’s biggest changes and regulations have all taken years to come about, and the programmatic evolution will be no different, for the first time the people working in the digital advertising industry have a personal interest in improving advertising experiences with technology, looking for a suitable value exchange that brings reward for both sides. Leveraging site, sound and motion’s ability to inform, entertain and build trust between brands and audiences is something we can all relate to.

[1] Cisco’s Western Europe 2021 Forecast

[2] SpotX; CTV is for everyone

Industry Insights Xandr Marketing

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