HOW AUDIENCES AND BRANDS LIVE AND THRIVE IN TODAY'S TV

Neil Mortensen

Director of Audiences

THE FUTURE OF TELEVISION IS ALREADY HERE…

for AUDIENCES

for BROADCASTERS

for ADVERTISERS

We are the voice of the audience for ITV Helping programme makers, schedulers, commissioners, creative, marketers, strategists and the commercial teams in ITV to understand our audiences better

Please direct your attention to the main screens.

Please direct your attention to the main screen

ITV brands

Scripted investments

Acquisitions Associates

Scripted Reality

Factual & Comedy

Digital investments

ITV Nordics

mediacircus

Growing international content business

Diverse content portfolio with global reach

Talent & POD

A GOLDEN AGE FOR TV

Tools that enhance enjoyment, control, involvement, connectivity:

And allows TV into new parts of the house – and out of it.

…Whatever you want, whenever and wherever you want it

Live viewing will continue to dominate

Source: BARB 2003-20th Jan 2015, individuals

DESPITE POTENTIAL FOR DISRUPTION, BARB REPORTED TV VIEWING ON THE TV SET HAS REMAINED RESILIENT

Source: BARB 2003-20th Jan 2015, individuals

Downloadable 47% UK homes with Internet access Commercial

partnership

80% UK homes with Internet access

3.7 3.7 3.7 3.6 3.6 3.7 3.7

4.0 4.0 4.0 3.9

3.7

0

1

2

3

4

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

No

. of

ho

urs

of

TV

vie

we

d p

er

da

y

Source: BARB 2003-20th Jan 2015, individuals

DESPITE POTENTIAL FOR DISRUPTION, BARB REPORTED TV VIEWING ON THE TV SET HAS REMAINED RESILIENT

Downloadable 47% UK homes with Internet access Commercial

partnership

80% UK homes with Internet access

Source: BARB/ AdvantEdge Q4, 2014

MAJORITY OF TV VIEWING IS WATCHED LIVE

DAY 1 88%

of all TV viewing is watched live

6% of all TV viewing is

watched on the same day as live

6% of all TV viewing is

timeshifted

Source: BARB/ AdvantEdge Q4, 2014

THE TV SET IS THE MONITOR OF CHOICE FOR MOST

TV SETS IN UK HOUSEHOLDS

26m

15.2m

6.4m

2.4m

One TV

Two + TVs

Three + TVs

Four + TVs

Sets getting bigger

94.7% of UK households own at least one TV (Fewer second sets)

Lengthening of replacement cycle

Catch-up technology available to almost 70% of homes

Source: BARB Establishment Survey Oct 2013 – Sep 2014 Base: Millions of UK households

-13

0

-11

-22 -25

-20

-15

-10

-5

0Kitchen Kids Bedroom Adults bedroom Study/office

Source: BARB establishment survey

Key

% Change in 2014 v 2010

% change from 2010 to 2014 in actual numbers of TV sets in other rooms in the house…

LESS ABOUT SECOND SETS

LESS ABOUT SECOND SETS

Where people watch television via tablets, laptops and/or smartphones

Bathroom 9% Bedroom 46%

Kitchen 19% Living room 56% Study 24%

Garden 12%

Source: Craft, SL3, Nat Rep Study, September 2014

Therefore the definition of TV will continue to evolve

TOTAL TV SET ACTIVITY YOY IS FLAT IN 2015 But less of it goes into BARB consolidated viewing. But less of it goes into BARB consolidated viewing.

204.5

198.0

28.5

30.2

3.7

4.2

26.7

31.5

0 60 120 180 240 300

Weeks 1-15 14

Weeks 1-15 15

Key

Unmatched

TS 8-28 days

VOSDAL + TS 1-7

LIVE

Ave. minutes spent watching per day

Unmatched viewing via TV sets 29 Days+ Timeshift, DVDs, Gaming, Netflix, Chromecast etc.

Source: BARB Weeks 1-15 All Homes

30%

13%

38%

19%

TOWIE viewing, Week 13 2015

Non TV

2-7 day

VOSDAL

Live

Total 7-day viewing, TOWIE, Week 13 2015

Source: BARB – TV & Comscore - Non TV (Catchup VOD from iOS,

Android, New Android and itv.com)

DEFINITION OF PROGRAMME PERFORMANCE CHANGES It’s not all about the overnights anymore…

12% OF TIME-SHIFTED VIEWING IS DONE AFTER 7 DAYS

% Playback

Source: BARB Jan-Dec 2014 – All recorded viewing , individuals

42%

21%

9% 6% 4% 3% 3%

1%

12%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

ViewingOn SameDay As

Live

Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 8-28 days

% Playback

Key

AND NEW METRICS BECOME PART OF THE ECOSYSTEM

Source: Instar Social, TOWIE. Week 13 2015

IT’S AFFECTING THE MAINSTREAM ACROSS THE UK AND NOT JUST THE NICHE

The growth of Video On Demand will continue to change the viewers’ relationship with TV content

VOD is shifting viewers’ relationship with TV content away from mass and shared to… PERSONAL and PRIVATE

Competitors are challenging viewers relationship with the traditional broadcast model

New user interfaces mean that linear channels are not always the primary filter for content

Subscription video on demand services introduce a new layer to viewing behaviour

Source: SVOD/OTT market, conducted by GFK in partnership with ITV, BBC Worldwide, Sony Pictures and Warner Brothers .July 2014

Only 24% of 16-24’s daily media time is TV on a TV set

A SNAPSHOT OF THE PRESSURES ON VOD TIME

Source: Ofcom Communication Market Report 2014,

Digital Day 7-day diary, All activity records, 16-24 adults

Daily share of media consumption among 16-24 adults

24%

5%

3%

2%

1% 9%

1% 5%

23%

9%

11%

7%

TV/film on TV Set

TV/film on anotherdeviceShort form video clips

Radio on Radio Set

Radio on another device

Other Audio

Print Media

Voice Comms

Text Comms

Gaming

Other Internet Media

Other Non-InternetMedia

BROADCASTERS EVOLVE THEIR PLATFORMS

Family of 7 TV

channels

50+ brand,

channel & programme social media

accounts

is now

available on

24 platforms

Expect to see TV brands building relationships with younger audiences outside of TV

Broadcasters evolve their content

Sponsorship

Ad-funded programming

Product Placement

VOD

Tactical Advertising

Event Breaks

Themed Breaks

Contextual Advertising

Second Screen

THERE ARE SO MANY NEW WAYS FOR BRANDS TO GET ON TO TV…

TOTAL TV REVENUES ARE AT A RECORD HIGH

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

£0

00

's

Includes broadcaster VOD Source: Advertising Association Expenditure Report 2000-2010. 2011-2014 data supplied by the UK broadcasters which includes VOD revenue.

Note: Figures are at current prices and gross. Revenue includes TV spots and sponsorship (Broadcaster VOD from 2011)

Total TV Revenue

TV ADVERTISING GENERATES THE MOST PROFIT AND CONTINUES TO GROW OVER TIME

£1.70 £1.48 £1.40

£1.06

£0.45

£1.79 £1.52 £1.48

£0.91

£0.37 £0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

£1.60

£1.80

£2.00

TV Radio Press Online display Out of Home

2008-2011

2011-2014

Source: Thinkbox, Payback 4 - Ebiquity database 2008-2011 & 2011-2014

Profit ROI

WE ARE ALSO STARTING TO UNCOVER THE PAYBACK OF TV SPONSORSHIP

£1.51

£0.87 £0.70 £0.65

£0.50

£0.00

£0.20

£0.40

£0.60

£0.80

£1.00

£1.20

£1.40

£1.60

TV Spot TV Spon Press Radio OOH

Source: Thinkbox & Ebiquity Database 2008-2014. Base: Limited sample of Retail & FMCG categories only

Profit ROI

BRANDS WILL CONTINUE TO GET CLOSER TO TV CONTENT

BY DOING SO, BRANDS ARE ABLE TO REAP AN ARRAY OF COMMUNICATION BENEFITS

1.2% increase in people

watching the series

TXF was the

3rd most watch commercial

programme for ABC1 Families in

2014

The number of product placements

grew by

20% and increased in

media value

TalkTalk online clip views grew

by

112% YOY

TalkTalk matched Virgin Media’s

share of voice on

half the media spend

A unique money-can’t-buy experience

for over

10,000 employees,

customers and partners across the

series

Entries to the TalkTalk home

viewer comp rose by

59% YOY

E = BC2

FUSION – ITV’S RECIPE FOR POWERFUL PARTNERSHIPS

Strategic Link Creative Effectiveness Real (world) Integration

Participation Value Fifth Element

Creative Effectiveness is crucial • Emotional advertising delivers twice the

profit of rational • Creative campaigns are 10 times more

efficient

New techniques to get to the truth

Audiences, Broadcasters & Advertisers are adapting and evolving together

THE FUTURE OF TELEVISION IS ALREADY HERE…

Thanks!