We Live in Interesting and Disruptive Times
The Chinese greeting, ‘may you live in interesting times’ is a metaphor for life in the 21st Century.
Over the past several years we have seen major changes and developments for the in the Television and Advertising industries, the impact of most of those changes are only understood in retrospect by the majority.
The trends indicated by those changes can sometimes be conflicting and contradictory, making any long-term forecasting difficult.
Let’s try to make sense of them.
Media consumption has changed irreversibly
Linear TV viewing is set to fall worldwide for the 1st time in Y 2016, with online video consumption, which grew by 23% in Y 2015, forecast to expand by a further 20% this year.
Today’s audiences do not think of their consumption of media in separate compartments like TV viewing, listening to music, internet surfing, movie watching and so on.
The audience sees them as one simultaneous stream.
Consumers want this content Now. Not only when made available by the content provider, not only on one platform and not broken down into episodes over weeks or months, Now
Traditional advertising is changing as a result
This macro social shift in media consumption is also changing how advertisers attempt to reach their consumers.
Previously, advertisers used mass channels like general entertainment channels to reach female and family audiences, and a combination of print, outdoor, internet, news and premium niche pay channels to reach men.
It was very easy to churn out an optimised media plan that used a combination of media to deliver, focusing on TV as the primary medium.
But now the clichéd model of the entire family clustered around a single TV during prime time has broken.
Viewers are moving to binge watching, on demand, catch up and multi-screen access. This disruptive effect is compounded by easy advert avoidance using the fast forward button on modern day set top boxes and devices.
So while the fundamentals of how to reach consumers via media targeting have not changed and TV remains the primary home entertainment device, the change in consumption is also changing the traditional mind-set of the 30-sec spot and program sponsorship.
TV rating companies all over the world have been very slow to develop new methods of audience measurement that incorporate all these major viewership shifts.
For example: Empire, Fox’s highest-rated TV show, drew an audience of 25-M for the premiere of its 2nd season in September 2015. Only about 20-M of those viewers registered in the 3-day Nielson ratings. The remaining 5-M were not reflected due to the fact they did not watch the show on traditional linear broadcast TV.
Nielsen is now developing a new methodology that will give the industry a show’s total audience on television and online including Smartphones, for more than a month after it airs.
There is a lack of tools that accurately measure the total viewership of TV content across different screens. As a result, advertisers and media agencies are trying to figure out the changes and experimenting with creative ways of using media to reach the target consumer.
The focus is on engagement and experiential communication
Our senses are bombarded with over 11-M bits of data every sec. The average person’s working memory can handle only 40-50 bits. We ignore 10,999,950 bits of data every sec we are awake.
The average resident of any large city gets exposed to around 350 commercial messages every day registering just 150. Few of these adverts make a strong enough impact to be recalled, make an impression and make a sale.
In a world that is becoming ever more cluttered with information and conflicting demands on a person’s time, advertisers are realizing that traditional passive ways of advertising are losing and in many cases have lost their effect.
The focus for advertisers now is to build more participative engagement and a 2-way communication with consumers.
The ‘hook’ is facilitating a dialogue that enables consumers to be closer to the brand and interpret the brand messaging each in their own way. It is about getting the average consumers to be the brand’s Ambassadors, making them believe that this is their brand and that they have the ability to influence or change it.
At one end, this has led to increased investments in social media, while at the other it has also led brands to take more and more interest in physical experiences.
This trend is also making advertisers look at how to integrate their brand message within TV content.
While advertiser-funded programming, brand integration’s in story-lines and the like are nothing new, the significant trend is that they are no longer innovations. They are part of the marketing plans for mainstream brands. And these brands are putting serious marketing money towards using content creatively to seed out their messaging in a subliminal way.
There has been a resurgence of pay TV and content windowing. Recent news about free-to-air channels not being able to sustain their cost structures in the light of low advertising, coupled with rapid developments in the regional pay TV space, point to the fact that premium content will increasingly have a 1st window on pay TV and only then will be available to FTA (free to air broadcasting).
Pay TV markets in Europe and the United States are mature and are ripe for the disruptive technology at their door.
As a result, advertisers will put greater pressure on broadcasters to justify their relevance to a marketing plan. This will also lead to increased competition among broadcasters in an attempt to retain their share of smaller ad budgets.
That said we can therefore expect a downward pressure on rates and increased value-adds given out by broadcasters, which is somewhat negative for the TV industry near term.
But the negativity may be a short-lived trend and the audience and industry sentiment will bounce back once the new forward disruptive services are in place.
Have a terrific week.