A rise in new technologies is helping TV keep pace with digital channels
Ever since TV’s inception during the 1980’s and the first TV boxes were propped up in domestic living rooms, the medium has been the go-to for advertisers wishing to drive huge amounts of awareness, create and leave a lasting legacy or earn noise in the press. After all, nobody ever wrote home about a piece of direct mail or a banner ad…
Hundreds of millions, if not billions of global currency has been splashed out on remarkable TV advertising over the last thirty years, launching and building countless brands, driving cultural change and stimulating healthy business and prosperous economic growth.
But TV audience numbers have of course, been consistently dropping. In the case of linear TV, plummeting.
And since the rise of the web and more potently, since the rise of web 2.0, the pendulum has swung. More and more media money has been poured instead into digital alternatives, digital alternatives that can be hyper-targeted, explicitly tracked and ruthlessly optimised. These digital ads have simply accommodated for the digital age, for the digital consumer and provided brands and advertisers with greater transparency on their ROMI (return on marketing investment) and making attribution models increasingly more granular and profitable. Naturally, digital became the answer to almost any commercial question.
Now, that’s not to say that TV ads ever went away, they were always there; even throughout this growing boom of digital impressions and online prospecting, media spend has always found a place for linear TV, even if the spend was depleted. And thanks to it’s close siblings YouTube pre-roll, Video on Demand (VOD) and various targeting servers like AdSmart and Sky Analytics, TV campaigns have remained a consistent comms option for the top brands with hefty budgets.
But the golden age of Television advertising may well be on the return as a series of technologies creeping into streaming infrastructure is enabling brands to do the one thing they could never do before, optimise their TV campaigns. And with a growing consumer appetite for demand side content and streaming services, TV content has never been so in demand. Thank Netflix and co, for that.
For reach and scale, TV could never be rivalled. But the ‘spray and pay’ TV buying approach, with limited targeting, has been competing in a world where programmatic exchanges, hyper-targeted social media campaigns and aggressive retargeting thrives and prospers and this older model could never be as effective at getting the right message in-front of the right person. Not in the same way as the digital options.
But that’s changing.
What if TV could deliver hyper-targeting, optimisation and it’s famous scale; all at once?
Cookies and Connected TV
The first technology to really emerge in the last couple of years is connected TV. Connected TV (CTV) is simply a television that connects to the internet. Unlike traditional TV, CTV includes Smart TV’s, Apple TV’s, devices like Tivo and Roku, gaming consoles like X-Boxes and PlayStations.
CTV is a conduit Over-the-Top (OTT) video content. OTT content is content that is delivered via the internet without multi-system operator (MSO) involvement. Much OTT content mimics the services of a traditional media service, but over the internet – and usually for free or much less expensive.
For example: WhatsApp, the encrypted, free, and wildly-popular text-messaging app for smartphones that uses internet connection instead of a mobile texting plan. WhatsApp is a good example of and OTT messaging application. CTV like Netflix does the same to traditional television.
The concept of connected TV services like Netflix, Now TV and HULU aren’t anything new but companies like TV Squared are ensuring CTV impressions can be cross-referenced with those of digital nature. For example, if a user is served an advert via a digital channel like a banner ad, display ad or social media ad, their cookie data can be transferred over to a connected TV meaning more effective targeting and targeting.
The most contentious point for development when discussing CTV is monitoring impressions. Up until the last business quarter, there’s been differing KPIs and metrics for CTV as there have been for linear TV. But co-impressions (counting multiple people viewing one TV, like in linear) are starting to be recognised and authenticated by media agencies, Advertisers began to accept co-viewing measurement for their connected TV campaigns in the latest upfront cycle. In 2018, connected TV overtook mobile for the largest share of video ad impressions.
“We all know [advertising] costs in linear TV are going up because supply is going down. Suddenly, if you’re adding supply in connected TV [by counting multiple impressions for a single ad exposure], the costs should go down,”
– Mike Piner, svp of video and data-driven investments at MullenLowe’s Mediahub.
As with various above the line mediums, the programmatic tech stack is slowing seeping into TV buying and even linear TV buying, leading to more control for advertisers on optimisation and targeting. Programmatic TV ensures TV retains its mega scale whilst giving more granular control over audience demographics and spot allocations i.e. a particular show can be advertised against and creative variations swapped in and out, in real time.
In essence, programmatic TV replaces a ‘pay and spray’ model with a media inventory that is accessible via an exchange, where TV spots are rewarded to the highest bidder and learnings from creative performance are fed into real-time decision making.
“Five percent of all TV ad spend in the US will be programmatic by 2019, according to research by eMarketer. Though modest-sounding, that’s an extremely rapid expansion from $640 million in 2016 to the $3.8 billion it is expected to become.
Research by PWC predicts that programmatic TV will represent approximately a third of global TV ad revenue by 2021, whereas a study by Videology states the consensus among industry experts to be closer to more than half by that date.
-Marketing Land 2019
As the race to the bottom for cheaper digital impressions only increases and the squeeze of ad-blocking grows in prominence and the restrictions of GDPR compliance tightens, the traditional cost per click model has never faced such jeopardy.
This week, BuzzFeed announced they’d be laying off 15% of staff, another indicator that the triangulation of publisher, advertiser and display network is facing over-saturation.
Connected and programmatic TV opportunities provide advertisers with a TV medium built for the digital environment, one that offers the grandeur of linear TV but also the optimisation of more traditional digital channels. As TV advertising gets smarter and the appetite for streaming platforms only increases, CTV and Prog TV are likely to see an influx in marketing budget as the technologies grow in strength and availability.