Originally Published in: City A.M.
July 9th, 2018
“There’s no place for TV in advertising.” “People only watch on-demand.” Does this sound familiar? While TV has entertained the public for more than 80 years, its place in modern marketing is in question.
The reason? We’re seeing a generational shift in viewing habits with those aged four to 24 watching a third less broadcast TV than they did in 2010.
In parallel, the popularity of on-demand video is rising due to platforms such as YouTube, ITV Hub, All4, and subscription services like Netflix. Even when viewers are watching broadcast TV, attention is divided, with three quarters of UK consumers simultaneously using a connected device.
When coupled with TV’s continued reliance on measuring performance by exposure, and linear TV unable to deliver accurate audience targeting, leading brands are rethinking TV’s role in advertising strategies.
Ultimately, TV must evolve, or risk irreversible decline.
All is not lost for TV, however. It can be relevant to future generations as part of a broader offering that spans linear and on-demand, preserving the fact that all generations still want superior content.
Broadcasters have always produced great content (a fact not lost on Netflix, which spent $8bn in 2018 on original programming), and TV is also inherently high-quality and brand-safe due to Ofcom regulations.
For TV’s future success, the ad business model that funds it must evolve to ensure that output is maintained.
With budget restrictions, advertisers want to buy specific audiences rather than TV spots, meaning TV must target audiences based on interest, viewing, or demographic data.
While this shift is slow in the UK, there are positive signs. Sky’s AdSmart is leading the way, and its partnership with Virgin Media enables access to over 30m viewers. Channel 4 is offering ad targeting across All4 and partnering with Sorenson Media to enable targeting of linear viewers, while ITV is exploring household targeting across on-demand and linear.
Today’s advertisers expect granular and verifiable measurement to gain an accurate view of campaign performance. In our data-driven world, there’s no place for estimations; TV must evolve to offer digital-style analytics. Sky is overhauling measurement, and the Broadcasters’ Audience Research Board offers revised audience figures to include on-demand viewing, but TV still has a long way to go to deliver real-time performance analytics.
There is a way forward for TV advertising as part of a measurable format that encompasses linear and on-demand viewing. TV monetisation as we’ve known it for the last 80 years is certainly at risk, but there is still a major place for TV (or shall we call it “video content”?) in advertising, and an accelerated evolution will ensure that it remains a crucial element of an advertiser’s strategy, for the next 80 years and beyond.