Future TV Ad Forum: Opening Up TV
OMD’s JP Edwards reveals the key focus of debate at the Future TV Advertising Forum 2018 and explains how TV must adapt if it is to rival digital and avoid declines over the next 10 years
The TV industry has been nervously looking over it as shoulder at the new Digital Players for many years now. 2018 is set to be the first year in which global digital advertising investment (US$197bn) will be greater than TV investment (US$183bn), both being significantly larger than all other forms of advertising investment combined (US$120bn).
This gap between the two leading media channels is set to grow to nearly US$80bn by 2023. TV is by no means dying but it is missing out on potentially huge growth opportunities.
Therefore, TV’s proposition needs to develop, learning lessons and appropriating techniques from the digital platforms whilst protecting and nourishing those attributes that make TV unique.
Exactly how this can happen, was in our view, the key focus of debate at this year’s Future TV Ad Forum in London.
The TV industry has seen steady growth this decade but structural change in the advertiser market means that it must adapt to new realities, otherwise we may see declines over the next 10 years.
A fundamental driver is the size of advertisers and the shape of many advertising sectors. TV is built for a landscape of several national scale advertisers, each competing for share of voice to drive market share. The past 20 years has seen two trends that challenge this situation.
The first is the global consolidation of brands. In many sectors national brands have been bought up by global corporations who are looking for scale efficiencies.
Essentially there are fewer, larger brands competing at the national level. These brands are interested in regional and global partnerships that can reach global audiences.
The second trend goes the other way, fragmentation to serve multiple niches. Start-up and micro brands need to serve niche audiences across territories.
[advert position=”left”]
Digital media targeting capabilities have enabled such approaches, meaning that someone with a good idea and a US$30 Google AdWords voucher can start, and then scale up to, a potentially global business. 70% of Google’s and Facebook’s advertisers are SMEs looking for efficient growth.
Digital media is taking the vast majority of investment from these two directions of growth, and it will continue to do so unless TV ‘opens up’ to new technologies and ways of working.
The good news is that the TV industry is beginning to build solutions to address the needs of these new kinds of advertiser.
The requirements of multi-market brands are being addressed by cross-publisher and cross-border integrations. Examples include Open AP in the US and RTL’s involvement with the netID initiative in Europe.
Measurement across screens is moving forward – examples include NBCU’s CFlight and the industry wide measurement system for the Swedish TV eco-system.
In terms of better scaling, advanced targeting and addressability, Sky’s AdSmart is being rolled out in other European markets as well as on the Virgin Media cable platform in the UK, driving AdSmart household reach to over 50% of UK homes. Income is growing at a healthy 30% per year.
Whilst ITV in the UK say they are unlikely to join the AdSmart platform, they do recognise the need for common definitions across all addressable platforms.
Global data standards, audience taxonomies, measurement metrics and currencies are now a strategic priority for both the buy side and sell side.
Open AP brings these two trends together, driving up scale through integrations across publishers as well as driving capability to target discrete audiences – all with third party verification of delivery.
Advertising’s role has always been a mechanism to scale the best and most innovative ideas. Digital platforms are successfully driving the early stage growth of these businesses. TV has the opportunity to take the most successful of these business to a new level, utilising the inherent scale, impact and trust of TV.
Targeting technologies will enable TV to do this for a wider range of smaller advertisers, whilst standards and partnerships will enable TV to scale across platforms and markets.
On the buy side we also see innovation to enable these practices to both ‘scale up’ and ‘target down’. Across Omnicom we have invested heavily in our global Omni platform to drive ‘people-based precision marketing and insights’.
The Omni platform is rolling out everywhere for OMD clients, driving a globally consistent way of targeting mass, niche and addressable audiences across multiple channels, especially TV.
If we as an industry can properly commit to this new reality, then ‘TV’ (however we understand that term today) has a bright future.
JP Edwards is chief product development officer at OMD EMEA