The long-promised age of the connected TV will emerge in 2011, creating new narrowcast ways of reaching TV viewers
By Norm Johnston, Mindshare Worldwide
The outlook is good for TV. Viewing figures are up, proving the resilience of the ‘first screen’ in an increasingly multi-screen world. Dual consumption of TV and the internet is popular and the most commonly debated topics on Facebook are TV programmes. TV has also led the rebound in media spend out of recession, even in battered markets such as the US. Kantar’s data for the first half of 2010 indicates that spot TV spending was up by 25%.
Moreover, digital TV has come of age. The emergence of internet-connected TV sets in 2011, together with the momentum of IPTV viewing, is providing advertisers with the opportunity to combine TV’s historical strength in reach and branding with some, if not eventually all, the benefits of addressable media.
According to iSuppli, there are over 85 web-enabled TV models available in the US alone. In the UK, there are two competing IPTV systems that could not be more different. Rupert Murdoch’s Sky TV is putting the final touches to its ‘closed’ AdSmart system, which will enable advertisers to target ads to roughly four million household postcodes using their new Sky High Definition set-top boxes. Meanwhile, a consortium led by the BBC is launching YouView, an ‘open’ IPTV platform that enables advertising to be delivered via the ‘channel’ or site that is being viewed.
Similar competing systems include Google TV and Project Canoe in the US, SES New Skies Satellite in Latin America, Canal+ and Orange TV in France, and SingTel and SARFT’s IPTV initiatives in Asia.
In many ways, today’s IPTV landscape mirrors the early days of the internet – many different open and closed walledgarden systems, layers of non-compatible technologies and a confusing set of choices for advertisers. However, underlying all these systems are some consistent themes, features and opportunities for brands to get much more out of their TV spend.
First, TV will become addressable, enabling greater accuracy in the targeting of TV spots and eliminating wastage. Currently, addressability comes in two main forms. The first approach is based on targeting against postal codes. Thus ‘zone’ targeting will enable advertisers to apply years of direct marketing data analysis and targeting techniques to TV. For example, Ford could target specific neighbourhoods with specific vehicle models based on statistical analysis of its marketing and sales database. According to Visible World, some level of zone targeting will be available in 88% of cable households by the end of 2011.
The second form of targeting is household-based, which is a model closer to today’s online marketing techniques, where an individual’s behaviour is tracked to create a non-personally identifiable set-top box user profile. In this scenario, Ford could decide to target particular ads against consumers who view particular TV content. WPP’s GroupM is actively trialling such a system, called Invidi, which matches TV spots to households, based on behaviour and pre-defined marketing rules.
Layered on top of this targeting capability is versioning technology, such as Visible World, which enables advertisers to determine what assets are actually in the TV spot itself. For example, Ford could use the zone targeting data to alter its TV ad to include a call-toaction to visit the closest Ford dealership. Visible World keeps a library of such variable assets, ranging from different images to altered calls to action, and dynamically updates a brand’s TV spots to make them more relevant to a particular audience.
Arguably, IPTV’s biggest difference is that there are simply more ways for brands to advertise to, and engage with, TV audiences. Thirty-second TV commercials (TVCs) will continue to play a role, but will be more targeted and increasingly portable with TV programmes as viewing becomes less linear and more on-demand. Consequently, time scheduling becomes less important as buying criteria, as planners purchase specific audiences and content associated with them.
While TVCs will continue to remain a strong currency on TV, alternative formats will continue to emerge on IPTV. For example, rich media ads will also be deployed on electronic programme guides (EPGs), which will be a major battleground for companies wishing to be the consumer’s ‘first stop’ in this new, interactive TV experience. Branded content will also become more common. Advertisers will pay to have their own programmes appear in EPG search results on like-minded content that resides within the brand’s territory. Imagine Kraft cookery programmes appearing alongside Google TV search results for a recent Jamie Oliver cookery programme. As Facebook and other social networks are integrated into IPTV platforms, advertisers will have to apply influencer outreach and advocacy building programmes to indirectly target TV ads to particular social graphs. In short, more consumers will see TV ads because they have been ‘liked’ by their friends.
These are just a few examples. The list of what content advertisers can target to future IPTV users is evolving and growing by the day.
Is all this additional effort and technology worth it? Current Mindshare and industry trials around the globe are positive. Quantitative research by Comcast in the US has indicated that homes receiving addressable advertising tuned out 38% less than those with non-addressable ads. Mindshare trials with Invidi and Visible World have demonstrated a double-digit lift in response rates. Mindshare has also launched several successful IPTV initiatives in China for Heineken and Nike that have delivered greater reach, engagement and results than normal TV campaigns. We helped Heineken create its own branded TV channel for its Shanghai ATP tennis tournament sponsorship (Figure 1), which was supported by TVCs targeted in playback and video-on-demand, as well as interactive promotional banners on the EPG. On average, consumers spent 10 minutes engaging with the bespoke Heineken IPTV channel, playing games and watching video footage. Other major brands to successfully experiment in IPTV include Unilever, P&G, and Paramount Pictures.
How will IPTV impact media agencies? In short, tomorrow’s TV and the processes and approach surrounding it will ultimately bear a much closer resemblance to today’s online marketing. Digital data will enable media planners and buyers to precisiontarget specific audiences regardless of time or content. Inferred and modelled viewer information will be replaced by actual viewer data. GRPs may eventually disappear, or at least be redefined. Furthermore, media planners will be able to optimise ads in real-time, shifting budget and tactics instantly, based on actual results and metadata. Realtime bidding on inventory will become more prevalent, similar to Google’s AdWords system and the new Demand Side Platforms (DSPs) now being applied to online video and display inventory. For broadcasters, this will both inflate and deflate prices as the market determines value in real-time. For example, remnant inventory, previously given away as added-value, may in the future have a legitimate price if it is guaranteed to target a specific audience.
Creative agencies will also need to get better at cost-effectively producing multiple digital brand assets as the formats and needs expand on TV. All these changes require a much greater focus on investing in people, technologies and processes to better manage and leverage data.
Insight-driven media planning and buying will never disappear, particularly for clients seeking innovative ‘out-of-the-box’ ideas and programmes. Old fashioned linear TV will still exist, particularly for major sporting events and ‘water-cooler’ programmes, such as Pop Idol. Even the up-front market may continue to exist for a long time, albeit with slightly different rules, as inventory becomes more aligned to specific audiences, rather than time and linear programme schedules. However, agencies will need to move away from traditional planning and buying skillsets to find new talent with strong data and analytic capabilities.
Of course, TV is not alone in being reinvented for a digital age. Next Issue Media is a consortium of major publishers including Condé Nast, Hearst, News Corporation, Meredith and Time Inc. Together, they are combining forces to develop the nextgeneration digital magazine advertising platform. While iPad and eReader numbers are still small and business models are unclear, most major publishers are scrambling to develop interactive and addressable versions of their offline publications.
Eventually, most media will become IP-enabled and connected to the internet, or the ‘cloud’, enabling advertisers to track behaviour across devices and better target advertising based on specific audience nuances, needs and stage in the purchase process. In fact, Google may be best positioned to design, organise and enable this future connected world and deliver on the long-held dream of bringing dog food ads to only dog owners, not just on TV but across all devices.This article originally featured in the March 2011 issue of Admap.