How TV networks are addressing the evolving demands of marketers and audiences
US digital ad spend surpassed the amount spent on TV last year and has led many to declare ‘the death of TV’. But, such proclamations are premature, according to participants on the opening day of this year’s Beet.TV conference hosted in Miami.
Here, attendees sat in on panel discussions where participants from leading US TV networks shared insights on how drop-offs in the perceived norms of TV viewing are often misconstrued.
A decline in viewer growth
Event co-host Ashley Swartz, chief executive officer at Furious Corp, kicked off proceedings by pointing out that “the big screen in the living room isn’t going anywhere,” but noted some of the challenges facing TV networks.
The multitude of challenges mounting in front of traditional TV players can be attributed to one main cause: the saturation of TV viewing time, with some of the largest tech brands in the business waiting eagerly by the sidelines to take a piece of this business.
Looming threat of the internet oligopoly
“The jig is up,” Swartz told attendees. Going on to cite research figures from eMarketer, she explained how, between 2017 and 2018, the average amount of time US audiences spend with video content will be 12 hours and eight minutes per day.
“Well, with 24 hours in a day, we’re simply not going to [be able to] make any more time [for audiences to consume video] so now, all of a sudden, we’re in a point in time where there’s no more elasticity.”
Combine this with the fact that advertisers have (for the most part) used technology to help drag down the cost of media – along with the looming interests of the internet oligopoly such as Amazon, Apple, Facebook and Google – and the pressing need to evolve their media monetization strategy is clear.
Amazon, which itself was rumored to be working on an ad-supported version of its Prime video offering, is increasingly vocal over its ambitions to rival the duopoly of Facebook and Google (to advertisers, if not in public at least) illustrating that the apparent threat is clear.
For its part, Facebook is also honing in on traditional TV ad dollars by pairing with the traditional TV media currency provider Nielsen. And, late last month, Google declared the full extent of its current interest in the TV advertising game with the unveiling of TV Content Explorer.
TV’s appeal is still rooted in social
According to on-stage participants at the event, the time for ‘evolve or die’ thinking is clearly in the past and the time for action is nigh. It’s a topic that wasn’t lost on Anna Bager, IAB senior vice president and general manager, who joined Swartz to discuss findings in the trade body’s recent research study exploring contemporary viewing habits of TV audiences.
The IAB found that more than 90% of the US population aged 13-to-64 watch TV in groups of two or more people, which is known as 'co-viewing.' A key behavior observed in the study found that over-the-top (OTT) TV audiences engage in “brand-related multitasking," with many discussing brands they see on screen on social media, or ending up searching for them online.
While such findings clearly demonstrate that TV audiences – be they viewing content on linear TV or via OTT services – are still essentially a ‘social entity’ and advertisers and content providers are now faced with challenges on how to engage audiences, as well as place a value on this type of engagement.
New paradigm, new definitions
Addressing the latter point, Bager said: “I don’t have a number or percentage, but what I would say is that clearly there should be a higher value on OTT, in my opinion, because if you look at it, the viewer went through quite a lot of steps to get through to the content.”
She went on to state that this new paradigm poses advertisers with questions such as ‘what is primetime?’
For instance, is someone watching an episode of their favorite program on catch-up during the middle of the day now worth the same value to an advertiser as the same viewer watching during ‘traditional prime time?’
“It’s someone that deliberately turned on to that content, not just someone that turned the TV on, and then started walking around their house,” she added.
Bager later went on to compare the current state of addressable TV, or ads on OTT, to that of mobile advertising five years ago, and implored attendees to improve their cooperation.
“What we’re seeing in the OTT space is very much like what we saw in mobile media five years ago, where there was huge confusion, and no one ever thought we’d work it out, or understand how we’d make money. But now we’ve kind of figured it out,” she added.
A new approach to engagement
Bager’s point that advertising audiences are still in the ‘test-and-learn’ phase was demonstrated in recent consumer research conducted by fellow Beet Retreat participants Disney-ABC Television Group and Omnicom Media Group.
The study, conducted in late 2016, strikes a chord with the IAB’s assessment that TV viewing is still fundamentally a social pastime, with over 86% of participants reporting that word-of-mouth is an important means of content discovery.
Furthermore, one-in-three of the 2,000-plus participants reported that a primary reason for choosing certain TV programs was a desire to discuss them with friends and family.
Speaking with The Drum, Marco Forte, senior vice president, Disney-ABC Group TV, said: “Content is still king, and one of the reasons that we conducted this study is that clients want the affirmation that they’re purchasing premium video that consumers want.”
Another key finding in the joint study was that, while audiences are still actively seeking out quality content, the means of how they do this is rapidly evolving, such as via digital video recorders (DVR), video-on-demand (VoD) or apps and websites.
‘The new watercooler’
This thinking features prominently in Disney-ABC’s offering to clients, according to Forte, with the network creating opportunities for clients to feature in its earned properties, such as its Facebook and Snapchat channels.
Disney-ABC executives are terming such earned opportunities as ‘the new watercooler’ where people organically pick up on new concepts, according to Forte, of Disney-ABC.
“A lot of our programs like Good Morning America are so conversational and shared, that plays a huge role in it,” he added. “Wherever we are, we always try to wrap social into it for our clients.”
For advertisers, these emerging viewing patterns are present a new challenge as audience expectations of how brands communicate with them; hence the emergence of the six-second ad slot on TV screens.
Forte told The Drum that Disney-ABC is “very much open to testing and learning” when it comes to adapting its paid-for media opportunities in such a new paradigm, adding that a key area of focus is to be as least disruptive as possible.
“We’ve really been exploring integrations across the portfolio [a byproduct of Disney-ABC’s sales team reorganization earlier in 2017] more than ever now.”
This includes a more sophisticated means of brand integrations into the narrative of TV programing.
For example, the broadcaster has worked with brands like Google Home to include it in relevant hit TV shows such as Modern Family, as well as other household brands including Coke Zero and American Family Insurance during its recent Jimmy Kimmel programming.
Forte explained: “We have worked with Mitsubishi during our ABC News coverage of the recent once-in-a-lifetime solar eclipse, and they were launching their new Eclipse model, so that was a great fit, we love when those kinds of synergies come together. There’s a lot more we have on the horizon.”