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This document may not be reproduced or distributed in any manner without the prior permission of MTM
20th October 2015 │Contact [email protected] │ Tel +44 (0) 20 7395 7510
The beginning of the end – or the start of something new?
Opportunities and challenges for commercial broadcasters
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MTM is an international research and strategy consultancy. We help clients understand and respond to digital change
Introduction
Consumer insight• Qual and quant research• Content, brands, ads, technology• Demand and pricing analysis
Market and policy research
• Market and economic analysis• Competitor benchmarking• Market sizing and forecasting
Strategy and growth
• Vision and strategic planning• Opportunity assessments• Commercial growth strategies
Digital transformation
• Organisation/business process design
• Leadership coaching and support• Implementation and action
planning
Service design• User and market needs analysis• Service and experience design• Proposition development
1. Setting the scene
2. Areas of opportunity
3. Key challenges
Challenges and opportunities for broadcasters
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TV distribution is changing – from dumb terminals into connected devices
Analogue TVs
• TV sets• Set-top boxes• TV sets• Integrated apps
• Set-top boxes• Connected sets• Digital media streamers• Gaming consoles• Second-screens
Digital TVs Networked devices
1. Setting the scene
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As a result, overall TV viewing is shifting, gradually – from TV sets (down 4.7%, YoY) to other screens (up 17%, YoY)
1. Setting the scene
Source: (1) Thinkbox (2015)
Overall, there was a decline in total TV viewing of 10 minutes, 30 seconds a day compared to 2013, a fall of 4.5%.
This was entirely down to a drop in TV set viewing, which decreased by 4.7%. Viewing on other screens … grew year on year by 17%.
In 2014, 88% of all TV set viewing was watched live compared to 89% in 2013.
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However, some demos are changing very fast – consumption is becoming more complex
A non-linear world Age of reality
A social soundtrack Rise of OTT services
A new ‘golden age’
The impact of YouTube
Millennial tastes
1. Setting the scene
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Broadcasters face growing competition from online video businesses – the competitive set is expanding
1. Setting the scene
We genuinely believe we will come to think of this, and plan it inside a TV plan, as “The 5th Channel”. A genuinely smart way to target and reach light TV viewers
Chris Locke, Trading Director of Starcom MediaVest Group
Ster
RTL
SBS
BrandDeli
TV
The 5th Channel
AOL OriginalsGoogle PreferredFacebook PremiumMSYahoo
Premium VOD
Programmatic video
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As consumption changes, commercial broadcasters have access to new data sets, supporting new kinds of advertising
Growth of connectivity and mobile
Shift of time/activity
online
Proliferation of OTT
services
Syndication &
distribution
Sophisticated TV
audience measuremen
t
Growth of social media
1. Setting the scene
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At a high level, digital data can be categorised into three broad categories
1. Setting the scene
Traditional (+ multiplatform) measurement
panels
Commercial suppliers
Bespoke research
Media owners …
… and advertisers
Digital services data
Server data Registration Volunteered interactions
Cookies and trackers
Social interactions
Digital networks
Devices and networks
Third-party
Internal data sources -
Panels
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For broadcaster sales houses, advanced data strategies are a strategic priority
1. Setting the scene
vs.
• High reach, with limited relevance
• Data verifiable through measurement panels
• High reach and high relevance due to a variety of targeting options
• Data contaminated by high levels of online fraud
1. Setting the scene
2. Areas of opportunity
3. Key challenges
Digital data – challenges and opportunities for broadcasters
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The proliferation of data is clearly creating many different opportunities for broadcasters
Data opportuniti
es
6. Testing/optimisation
1. Personalisation
2. Mar-comms
4. Advertising
3. Insight and innovation
5. Content acquisition
2. Areas of opportunity
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Good data clearly supports the development of new TV and video ad products – a range of complementary options
2. Areas of opportunity
BroadcastNon-addressable
Multiple segmentsTargetable
DirectAddressable
RelevanceTargeted
messaging
ReachGeneric
messaging
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Let’s explore the experiences of two leading UK broadcasters, leveraging data to deliver new ad products
• Using Dynamic Ad Insertion to deliver addressable advertising
• Using personal registration data to support sales of VOD advertising
• This results in incremental revenue of between 30% to 55% depending on the ad product, compared to current VOD prices.
• By enabling advertisers to better target their campaigns, Sky AdSmart opens TV advertising to brands who may previously have thought TV too broad a medium.
2. Areas of opportunity
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Historically, Channel 4 sold ads on its online video platform in genre packages
55+
45-54
35-44
25-34
16-24
MenWomen
FactualLifestyle
EntertainmentComedy
2. Areas of opportunity
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In 2014, Channel 4 began selling demographically targeted ad packages on its online video offer, 4OD (now, All4)
ABC1
ABC1 Female
ABC1Male
16-34
16-34 Female
16-34 Male
2. Areas of opportunity
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The packages were tested intensively – using big data and survey research, plus anonymous data matching
10,000 surveyed
11 million registered 4oD users
• 1st Party registration data• Survey data• Viewing data
• Household size• Income
• Modelled social grade with 80-100% accuracy
• Audited by PWC
2. Areas of opportunity
182. Areas of opportunity
The results were compelling – greater efficiency and better brand awareness – attracting significant price premiums
We’re continually improving the effectiveness of advertising on
4oD for our agency and client partners. Following these
impressive results from our first commercial data initiative, our
next steps are to look at interest-based and behavioural
targeting which will enable advertisers to target categories such
as food, health and technology.” Gill Whitehead, Director of ATI,
C4
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Sky has a long track record of investment in innovation – as its platform has matured, advertising has become a priority
2. Areas of opportunity
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Developing AdSmart has been challenging – 6+ years to develop and launch
People Systems and processes
Technology Business case
2. Areas of opportunity
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The new offer has been built on advanced data and measurement – viewing, targeting and results
Demographics Interests
Product preferences Ratings
2. Areas of opportunity
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In many markets, the business case for TV platform-based ad products will depend upon gaining share and new clients
2. Areas of opportunity
1. Setting the scene
2. Areas of opportunity
3. Key challenges
Digital data – challenges and opportunities for broadcasters
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The TV industry landscape is complex – making coordination, alignment and rapid progress difficult
3. Key challenges
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Measuring consumption across a growing number of different devices is complicated – and will become more complex• Constantly changing device and on-demand
service landscape
• Very wide range of services, growing fragmentation
• Challenging technical integration of measurement tools
• Little understanding of how many people are watching particular screens
BARB’s Project Dovetail - on-demand services covered by TV Player report (beta):
3. Key challenges
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Technical integration is complex – we are a long way away from unified video ad market
SSPs / exchangesMedia
owners / publishers
Agencies / advertisers
DSPs
Ancillary services – fraud detection, visibility, analytics, audience and real-time data
Programmatic video is developing in the online market, but it’s being driven by agencies, big tech businesses and intermediaries. It’s very difficult to integrate these new buying platforms into traditional TV systems – to link into broadcaster TV inventory management and ad insertion systems. There are big regulatory issues, around compliance – which are really hard to automate – and then there are lots of complex rules about ad placement. We’re a long way away from a unified programmatic TV and video market.
3. Key challenges
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Integrating various different audience data sets is a complex and time-consuming task
10,000 surveyed All4 users
11 million registered All4 users
• Survey data (social grade, interests, spending, HH composition)
• 1st party registration data• Viewing data
• Household size• Income
• 1st party registration data• Viewing data• + Modelled social grade
with 80-100% accuracy (audited by PWC)
Viewing data requires correlating with factors that matter to advertisers before it becomes valuable
3. Key challenges
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Lots of broadcaster data is not that valuable, due to low volumes and limited range and richness
vs.
• Low volume – large no. of registered users, but majority is low frequency
• Few different variables – e.g. views, programme type, genre, duration
• Limited value to advertisers beyond volume and targeting data
• High volume – large no. of people with regular interactions
• Rich data – large no. of items, promotions, shelf and store position, shopping history
• High directly-measureable value
3. Key challenges
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As broadcast content is distributed across more platforms, the availability and quality of data are becoming more uneven
It is increasingly difficult for broadcasters to form a holistic view on their content consumption as their content is increasingly distributed across multiple platforms
Pay TV platforms
Mobile devices
Video aggregators
Smart TVs
3. Key challenges
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Broadcasters need to acquire and develop new skills and capabilities to take advantage of emerging opportunities
• Most current consumer insight teams are focused on overnights and bespoke research
• However, leading broadcasters are setting up strong data-focused analytics teams, with the following skills:
– programming
– statistics and predictive analytics
– data management
3. Key challenges
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Thank you!
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Jon Watts
Director
020 7395 7518
MTM
20-22 Shelton Street
London
WC2H 9JJ
United Kingdom