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CandW discuss the trouble with TV advertising

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The top theme of the Shift conference was that TV needs a better ad experience if it is to stop the audience leaking away to ad-free SVOD. Is there a solution to this intractable problem?

Shift Theme 1: The two big problems for TV advertising (2:00)

Throughout the show, there was a general acceptance that a better ad experience was needed. People are increasingly unwilling to accept the high ad loads and untargeted approach seen in traditional television. The TV ad problem leads to the second big problem. Consumers now have an alternative in SVOD. Services like Netflix and Amazon serve up top quality original content ad-free.

Shift Theme 2: How the two big problems are holding back programmatic (4:50)

At Shift 2016, Lauren Fisher, Principal Analyst at eMarketer, forecast programmatic ad trading would generate $4 billion in 2018. At this year’s show, she halved that forecast, citing SVOD and the fact that the TV ad model was not working. She also pointed out the impact Google and Facebook are having as they bring their huge pools of consumer data to bear on the video model.

Shift Theme 3: Measurable attribution (6:20)

The TV industry has been very poor at connecting an ad seen on television to an action taken by a consumer. For example, an ad for a new car could start a consumer down the path of purchasing it, but Google may end up getting the attribution because the consumer searched for the vehicle online.

Shift Theme 4: Big data (8:45)

The central role of data came up throughout the Shift conference. No media business can be run without it today. Working with large amounts of data is new for TV networks, which have been data-poor for most of their existence.

Nielsen and Adobe data corroborate the show themes (10:30)

Nielsen data shows clearly that young people continue to move away from traditional TV. As well, new Adobe data shows the ad industry is not focusing enough on the experience of the ads. Many are running ads targeted to the browser in mobile apps. Completion rates for these ads are significantly lower than mobile-native ads.

Will makes the point that it is very difficult for a fragmented TV industry to respond to the movements of giant internet companies like Facebook and Google. He sites the slow progress of TV Everywhere against SVOD as an example of the slow progress the pay TV industry has made.

Opportunities for ads in online viewing (18:45)

Many of us are becoming accustomed to watching our premium shows in an ad-free environment. However, there are still opportunities for video advertising outside of that. For example, VRV is a freemium platform that allows users to have a casual relationship with content by watching ads and then to subscribe to an ad-free experience for the content that resonates the most. As well, a lot of TV viewing is in the background and might be best supported by an ad model.

Will says the industry is very fearful of the loss of the premium inventory to ad-free platforms. Certainly, the data suggests this is precisely what is happening.

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One Comment

  1. GOOD Article.
    Viewers are going to continue to move away from “AD TV”
    I have noticed lately the ADS are taking up the majority of the Hour.
    I have QUIT watching the Morning news on my bedroom TV.
    I turn on the TV to see the NEWS and get 25 Minutes of ADS.
    Now I go to my DESKTOP Computer, click an Network, see the NEWS I am interested in FAST. DONE, NO ADS.
    SAME with TV Shows. They CUT most of the show for the ADS.
    Thinking of selling my (3 New 4-K TV’s) Cancelling DirecTV and giving up on TV.
    If they want to Concentrate on ADS, Give them to a DEDICATED CHANEL, “ONLY” for ads, like Home Shopping.
    In the GOOD OLD Days, Antenna TV, they had ADS, NO Cable/Satellite Charges. Made OUT like Bandits.
    What Happened ????????

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