Guest Post: How New TV Models Are Driving The Broadcast Industry Forward
In this guest post, Arjun Arora, FreeWheel commercial director ANZ, delves into how Australian broadcasters are a leading force in developing the TV models of the future – against a challenging backdrop of fragmentation and revenue erosion in the wider industry.
In recent years, media companies have been investing heavily in digital, which now accounts for over half of the total advertising market. Broadcast content watched on TV sets still dominates video consumption, but the average home now contains 6.6 screens connected to a multitude of platforms. As video viewing diversifies, it becomes harder to attract consumer eyeballs and associated ad revenues.
Rather than seeing this evolution as a barrier, Australian broadcasters have embraced changing viewing habits, combining the targeting capabilities of digital with the premium content and brand safe environments of traditional TV. This fortitude is having a positive impact on broadcaster revenues with GroupM forecasting total TV spend will grow by 1.2 per cent in 2019. This has been steered by three key developments in the broadcast industry.
The continued investment in BVOD
Broadcasters are responding to consumer appetite for video streaming by investing heavily in broadcast video-on-demand (BVOD) platforms, that combine catch-up or on-demand video with live streaming. These platforms give viewers access to a far wider range of content than traditional linear TV, across multiple connected devices. Over five million households use BVOD services such as 7Plus, 9Now and Foxtel Now, and an average of 347 million minutes of content are accessed each week nationwide.
Although BVOD services can be used with any connected device, from smartphones to games consoles, they are increasingly accessed via connected TVs, with Seven reporting over 60 per cent of viewing on its 7Plus platform comes from this type of device.
The use of connected TVs to access BVOD is appealing for advertisers as it means viewers are consuming content – and the accompanying ads – on the most effective screen for achieving brand outcomes. The rise in connected TV viewing is just one of the factors driving overall spend on video-on-demand (VOD) advertising, which is expected to increase by 17.5 per cent this year.
The arrival of addressable inventory
One of the key benefits of BVOD for broadcasters is the ability to offer addressable inventory, which can balance revenues with digital channels while also improving the viewer experience. Because users are required to log into BVOD platforms, declared user IDs can be used for identity-based marketing, enabling advertisers to precisely target audiences with relevant messaging according to a range of criteria such as geographic location or demographics, and increase their ROI.
Both 7Plus and 9Now already offer addressable advertising via direct sales and programmatic, with Nine Network intending to roll out deeper and more targeted audience segments this year. Addressability at scale, and in a trusted, brand-safe environment is attractive to advertisers, helping broadcasters boost their revenues.
The development of cross-screen measurability
Today’s advertisers are looking for accountability and the capacity to accurately assess how their ads are performing. The cross-screen measurability of TV is continually improving; for example, OzTAM and Nielsen are about to begin the roll out of Virtual Austalia (VOZ), an integrated database that combines linear and online viewing to provide an all-screen, de-duplicated picture of the TV landscape.
This development will enable advertisers to create media plans spanning multiple channels and devices, and allow broadcasters to optimise their inventory across all platforms. Broadcasters are already using audience insights to tailor their advertising offerings to evolving viewer preferences, with Foxtel looking to reduce ad load to two minutes per hour on certain channels to maintain audience satisfaction.
Broadcasters are rising to industry challenges such as fragmentation of audiences, measurement and technological complexities, and the proliferation of content, and recognising the need to shift to new TV models. These will allow brands to benefit from targeted, measurable advertising, delivered in secure environments where viewers are immersed in premium video content via their screen of choice.
Continued investment in BVOD, addressable advertising and cross-screen measurability will make the industry more competitive, and provide traditional players with a deeper understanding of their audiences, as well as allowing them to take control of their high-quality inventories and revitalise their value, making the most of both digital and linear opportunities. This will help bolster revenues, driving the broadcast industry forward towards a brighter future.
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