Television is a highly cost effective media for large advertisers, Unilever’s global media operations director has said, with new developments in advanced TV further increasing the value of the channel.
Speaking on a panel at the Future of TV Advertising Global, Richard Brooke said: “As a company that sells to 2 billion plus consumers a day on an annualised basis, we look at TV to provide levels of reach. [TV’s] high levels of reach make it very cost effective.
“As people have started to consume media – particularly over the last six to nine months – in a very different way, advanced TV brings something to the party…in terms of adding and driving reach.”
Advanced TV encompasses over-the top (OTT) streaming services, video-on-demand (VoD), connected TV (CTV), audience-based linear advertising, programmatic advertising and addressable TV.
Asked about the role advanced TV can play in a brand’s channel mix compared to traditional TV, Brooke described how “it allows for a level of contextual relevance”, recalling memories from his youth to explain.
“I used to go to a small cinema on Fulham road, [close to] the Hibernian Club. If anyone has been there, you’ll remember that [Hibernian Club] advertised [at the cinema], because it was around the corner. Similarly, advanced TV can expand or bring new advertisers into the medium.”
Chairing the panel, brand, agency and industry relations director at Comcast’s Freewheel, Emmanuel Josserand, explained that in its recent exclusive study, 84% of marketers envisioned growth in advanced TV spend over the next twelve months.
The study suggests that the increased advanced TV spend primarily derives from either an increase in budget, or a shift of spend from linear TV or display – and with the report also finding that the majority of marketers are expecting a decrease in marketing budgets for 2021, it is suggested that the latter is more likely.
Tim Willcox, managing director at Dentsu’s programmatic arm Amnet, explained that although logic would argue that the budget for advanced TV should migrate from traditional TV budgets, the reality is that the value advertisers demand from traditional TV budgets locks all parties in, to the point where it’s difficult to pull budget out.
“In the short term, that [advanced TV] budget is coming from other digital channels, because they’re a little bit more fluid. You’re able to flex them a little bit more without actually harming return on investment,” Willcox added.
On the other hand, Emmanuel Crego, managing director at Values.Media, said: “I’m convinced that addressable TV budget won’t come from other media because addressable capabilities are an incremental targeting on top of socio-demo one in linear TV, a better optimisation of linear TV budget.”
However, for Brooke, it is too early to determine whether the additional spend for advanced TV comes at the cost of linear TV. Rather, “when the content is there, the budget will follow.”
“The reality is that content is always going to be a driver for advertisers’ budget because the content is what people watch, and there is some amazing content available at the moment. In lockdown people have been binge watching on all that’s available.”
More important for Unilever, Brooke added, is that as TV moves away from a singular regulated linear stream, that all actors in the industry remain responsible providers of content.
“The regulation applied to TV is a very good thing. As TV moves away from a singular regulated linear stream, what we as Unilever will be urging the space to do, and what we would expect, is to remain a responsible provider of content.”
John Litster, managing director at Sky Media, considers the need for simplification in media and calls on the industry to start making a change
Mark Twain, Blaise Pascal, Winston Churchill, Dostoevsky – just a few of those who have been credited with variants of the phrase, “sorry for the long letter, I didn’t have time to make it shorter”. But what’s that got to do with TV advertising?
In an article discussing the need for simplicity, you’ll have to excuse the irony of 1500 words to give a little context.
In the last 10 years, the TV industry has experienced more transformation than in the previous 50. Having spent not quite 50 years in the TV advertising industry, there is no doubt that the complexity and pace of change is greater than it ever was.
From three channels to 140, from one device to five, from one broadcast platform to a plethora of choice, TV (in all its forms) has not just evolved, it’s exploded. It shouldn’t be a surprise that with so much flexibility and choice, on average people in the UK are still watching over 3.5 hours of TV a day.
In the last 5 months we have seen record TV viewing And then, a global pandemic hit. With more time spent at home, TV kept the nation entertained, connected and informed with familiar, trusted and escapist content. We saw new viewing records for Sky Sports, Channel 4 and Channel 5.
At Sky, on-demand viewing hit a new high – up 36% YoY, with the 4th of June becoming our biggest ever day for on-demand consumption. It wasn’t just a moment in time. Since the first lockdown, TV viewing has continued to go up across the board (+12% linear, +15% BVOD, +26% SVOD) and in the first weekend of the second lockdown we’ve seen an 11% viewing uplift versus the previous 6 weeks.
As often happens in big transitional moments, emerging behaviours have been accelerated, driven by changing consumer needs and enabled by technology. But this acceleration in behaviour also means an acceleration in complexity for the media industry.
Audience viewing is now truly multi-dimensional At Sky, our unique access to viewing data offers a rich understanding of how viewing is changing and how, with innovations in technology, we are driving a change in viewing habits too. Let’s spend a bit of time unpacking what we know…
Demographic stereotypes are evolving The TV viewing population and the rituals within each group are changing at different speeds, with a narrative previously around an ageing audience. This has shifted with VoD, and accelerated by COVID, we see younger audiences rising again. 2020 currently has the highest total TV set viewing levels on record for 16-34s.
Big screen still beats the best of the rest New habits show TV being viewed across different platforms and devices, but the big TV screen experience still leads the way (92% of viewing) – helped by better connected platforms and players meaning catch-up services are no longer restricted to laptops and tablets.
This year, Netflix became part of the Sky basic package and Disney+ and BT Sport are accessible within Sky Q, alongside a wealth of other on demand content providers.
And with the proliferation of 4K and HDR making the viewing experience even better, as Rory Sutherland posed, ‘the only real threat to lounge TV viewing is if someone bans the comfy sofa’.
This attraction to the biggest screen in the house means the lounge is where the majority of content is still watched (89%). This pattern does change by content type, with a shift to other rooms (mainly bedroom and kitchen) for BVOD (78% lounge) and SVOD services (63% lounge).
Sky Go is also equally Sky ‘stay’ In 2020 we’ve seen the biggest growth for Sky Go across mobile phones (+53%), followed by tables (+28%) and consoles (+28%). Why, with people not ‘GOing’ anywhere much?
With more people under one roof comes either a compromise in content consumption, or (as supported by the numbers) people choosing to watch content on their own terms, on their own devices.
Of all Sky Go viewing, 82% is watched inside of the home.
Different content influences how people choose to watch There is also a dynamic at a channel level where the type of content it provides shifts the way it is consumed.
Sky channels on average are 75% linear viewed, with sports and news 99% live compared to hard-hitting drama on Sky Atlantic, where 63% is viewed on demand.
Some of our new channels, like Sky Comedy and Sky documentaries, launched this year with significant range on demand and a stacked strategy for new releases, driving a more even balance of live and on demand viewing.
This content driven behaviour is supported by Thinkbox’s ‘The Age of Television: the needs that drive us’ research. This outlines 8 need states that define why and how people watch TV – from ‘keeping in touch’ and ‘experience with others’ (which is driven by live content) to ‘distraction’ and ‘escape’ (which lean towards the choice that on-demand gives the consumer).
Dayparts don’t determine platform choice any more When on-demand first arrived on our screens, we treated it as a ‘micro-ritual’ – focused around weekend, ‘appointment to view’ moments, with households choosing something ‘special’ to watch.
But this year we have reached a tipping point for VOD, where people are choosing to watch on demand content during the day too. During lockdown, whilst linear volumes were boosted during the daytime more than peak, for VOD all day parts – both weekdays and weekends – are seeing the impact of behavioural change.
This year the biggest time slot % increase in viewing has been 2-3pm (linear +16% and on-demand +57%). The biggest linear increase has been between 11-12pm (+22%) and the biggest VOD increase (+70%) has been from midnight to 1am (late night viewing not such a problem when you haven’t got the morning commute!)
What more do we know about how VOD is consumed with this 2020 acceleration? We see middle of the day viewing increases more pronounced on a Wednesday and Thursday, with Thursday seeing the overall largest increases in VOD viewing.
With documentaries and hobby and leisure content driving these daytime uplifts, maybe the excuse of ‘edu-tainment’ takes the guilt out of daytime TV.
Increased choice makes planning complicated With such a wealth of data on viewing, we could cut and re-cut this data by audience, channel, device, day part, platform or any other dimension for TV planning.
Then, as new platforms have been bolted on, they have adopted digital metrics rather than TV metrics. This has seen TV plans become fragmented between different platforms and different audience definitions, and the way that a linear TV campaign is measured versus a VOD campaign is different.
Plus, with different systems and approval deadlines, there is a lot of unnecessary admin around campaign management. It used to be digital specialists that spoke in code, but now the vast array of TV terms seems to have surpassed even that.
Different audiences, different prices, different measurement, different processes – it’s all starting to feel a bit too complicated.
All in one place, easy As we explored above, audiences don’t differentiate between whether they are watching content in linear versus on demand. They simply sit down and find great stuff to watch.
Sky Q’s ‘all in one place easy’ approach aggregates all the content people love in one place, so whatever the format it makes it simple to find and watch the content they love. Sky Q customers watch more TV and enjoy their experience more.
With the nation’s viewing evolving at pace and the dimensions for TV planning becoming ever more complicated, what about ‘all in one place easy’ for TV advertising?
We’re spending the time making advertising easier too Making things simpler takes time and needs a change in mindset too. At Sky Media, we’ve spent the last 18 months exploring how we can simplify the TV advertising market.
Our vision is to transform the way TV advertising is planned, measured, traded and managed by focussing on audiences, not platforms. Reach and connect with the right audience whenever and wherever they watch – in the knowledge it has the brand safety and high impact that only TV can provide. All in One Place Easy.
One audience (the audience the advertiser wants to reach), One measurement (measure in a unified way with CFlight allowing cross-platform reach and frequency), One price (unified metrics means prices can be simplified and blended).
And by stripping out the complexity to focus on driving the optimum blend of linear and VOD across BARB and addressable audiences, we hope not to just simplify how campaigns are booked, measured and managed, but to give the greater gift of time – time back to spend where it matters most.
So we’re investing time and money to make campaigns simpler and better. We’re calling it One Campaign, and we believe it will change the future of TV for the better.
TV advertising revenue plummeted as a result of the coronavirus pandemic, prompting broadcasters to slash content budgets and review spending. Tim Dams examines the extent of the decline in ad spend and assesses the likely rate of recovery.
“It could have been worse.” That’s the verdict of advertising giant GroupM in newly published research about the state of the advertising market in 2020.
Nine months into the Covid-19 pandemic, GroupM – whose global media buying agencies include Mindshare, MediaCom and Wavemaker – predicts an ad spend decline of 4.4% for the UK for 2020, which is much improved on its prior expectation of a 12.5% decline that it forecasted in June.
For the US, GroupM says the decline will be closer to 9% rather than a predicted 13% decline.
The figures are surprisingly good given that the advertising industry more or less shut down in March, with commercials production more or less halted as the pandemic took hold.
Advertisers around the world quickly started to reign in spend as lockdowns were announced. In the UK, ITV’s advertising revenue was down 42% in April, while Fox in the US saw revenues halve.
Advertising work then started to pick up in the summer, returning to almost normal in September and October with tech firms leading the charge.
GroupM says the advertising industry is experiencing a K-shaped recovery – the pandemic has seen rapid acceleration for e-commerce and advanced digital services and cratered industries like restaurants, bars, travel, entertainment and traditional retail.
Digital advertising is the “bright spot” in an otherwise dark year for the industry in both the US and the UK, adds GroupM.
In the US, it estimates that pure-play digital advertising will grow by 5% during 2020 on an underlying (ex-political advertising) basis, following on 2019’s 17% rate of growth. During 2021, the firm estimates that digital advertising will account for 55% of all advertising that it tracks.
Political advertising during the US presidential election has proved to be an important source of growth for digital media during 2020. Roughly 4% in total digital advertising was for political candidates and issues advertising, representing around 3% of the year’s gains.
In the UK, GroupM estimates that pure-play digital advertising will grow by 4.9% during 2020, following 2019’s 16% rate of growth.
Television advertising has also fared better than expected. In the UK, GroupM estimates it will fall by 10%, the worst rate of decline since 2009, but better than anticipated earlier this year. Its 2021 forecast now anticipates a 10% gain and a return to 2019 levels in 2022.
“Although streaming services receive much of the industry’s attention, traditional ad-supported television continues to do the bulk of the work supporting marketers’ brand-building efforts,” says GroupM.
National TV advertising in the US will see a decline of 7.9% during 2020 and rebound to grow by 6.6% during 2021 before returning to a flat or slightly declining longer-term trend.
“At this pace, national TV is faring better than every other category of media other than digital,” says GroupM.
The agency’s findings echo reports from the TV industry. At the height of the pandemic, the UK’s Channel 4 saw its revenue fall by half, and cut its programme budget by £150m. Chief executive Alex Mahon recently said the picture has improved and advertisers have returned, and that its content spend will go up “massively” next year to help it compete with streamers such as Netflix.
Last month, ITV’s CEO Carolyn McCall predicted an annual rise in advertising revenues for the final quarter of 2020, saying that “advertising trends are improving.”
Cinema has been most heavily affected advertising medium by the pandemic, with an estimated decline of 80% for 2020 in the UK.
GroupM expects a strong rebound of 160% in 2021 as film studios seek to monetise their backlogs with a surge of highly anticipated launches. “While this rebound may seem optimistic, we note that it only brings cinema back to 52% of pre-pandemic advertising spend.”
GroupM notes that studios are likely to release some upcoming titles on their direct-to-consumer platforms. “Even once the virus has receded, it seems unlikely studios will release as many titles in theatres as they did in pre-pandemic years, meaning admissions are likely to remain below 2019 levels for some time.
Elsewhere, GroupM thinks audio advertising will fall by 16% and 27% in the UK and US respectively.
Print media will fall by 23% this year in the UK. In the US, the figure is 20% for magazine publishers and a 30% decline for newspaper publishers. “It is our view that neither the magazine nor newspaper sectors will ever exceed $10 billion in ad revenue in their current forms, even including existing digital properties.”
Looking ahead, GroupM predicts robust growth for 2021 as vaccines allow normal life to return in the second half of the year. In the US, the ad market will rise 11.8% on an ex-political basis, or 6% including it. “For subsequent years, we anticipate slightly higher growth than we previously forecast—now 5% in 2022 followed by 4% in 2023 and 2024—to reflect what we think will be an accelerated pace of investment in digital media by marketers of all sizes.”
In the UK, Brexit uncertainty still weighs on the British economy. “At a minimum, our forecasts anticipate some degree of disruption to the economy in the early part of 2021 as adjustments are made; however, we think Brexit’s impact on the advertising market will be limited to a shift in spending away from the first quarter rather than meaningful full-year cuts.
More generally, we continue to assume that “normal” activity will return by the second half of the year, which pre-supposes that Brexit will not cause ongoing problems and that an effective vaccine will be widely distributed across the population.”