Wednesday, 15 May 2013

Digtalisation of TV: From SMART to SuperSMART

The Digitalisation of TV – from SMART to SuperSMART

Though compared to on-line the number of ad innovations that TV viewing has had in recent years is small, as the technology behind the screen and the viewers in front of it become more Connected and "SMART"er, the two will undoubtedly become more interconnected.  Whilst Tivo is currently leading the way in terms of innovations from a format perspective, what most are eagerly anticipating is the long awaited use of consumer view habit data that Sky is seeking to soft-roll in Aug next year. 
The notion of targeted TV (TTV) is one that is set to have enormous ramifications on all ad-fronts, and could lead to a complete overhaul of how we buy and consume TV ads; but what’s in store and where could this potentially lead?

Competition and Pricing

Firstly, this will lead to a new way of purchasing ads, likely to be along the lines of Run of Channel (ROC) and the TTV method of Behaviourally targeted ads[1].  Introducing this second method of spot purchase would effectively split a single spot into numerous ones, and for more mainstream spots result in inflated pricing and increased competition - e.g. more people want to buy the “young urban family” viewers for the first in break X factor spot = increased value of that segment.  Whilst conversely, buying a ROC X Factor spot would prevent any higher priced TTV buys, so could also cost more. 
However on the flip side, as more clients would have the potential to reach their audience in a single spot, there would be less competition for the less desirable spots, and consequently lower pricing at the other end of the spectrum, and more spots auto-filled by operators.

Progress in Verification

Whilst all major broadcasters continue to state the high view rate of ad breaks, as familiarisation of skippable TV and 2nd/3rd screen penetration continues to rise, a key question that clients will continue to ask is:  

“Was my ad seen?”

Companies such as DoubleVerify and AdSafe are helping tackle this question on-line through piggybacking adserver tagging, however as clients become used to measuring (and soon paying for) only ads that are actually seen, pressure will continue to rise for TV tech to progress to a more accountable level.

In response to this Sky have confirmed what many have hoped for, in that upon its soft launch this July[2] they will be able to establish whether a TTV ad was seen.  Whilst this makes sense - it naturally follows that to sell specified ad volumes a broadcaster must have the capability of tracking the delivery of said volumes – the importance of this move shouldn't be underestimated.

Digital media has had a swift ascent over the past few years, with progressions in targeting and accountability causing publishers and agencies to stand up and pay attention – indeed over 50% of SMG London’s total billings are now in digital media.  However whilst many clients have begun to appreciate and value the digital space, due to the ease of scale and the ability of providing that “water cooler” moment they’ve typically continued to favour more traditional media[3].  As TV starts to acquire these digital attributes, we can only expect this position to become further entrenched[4].  Whilst without login data[5] TV’s multi-viewer nature results in it being impossible to establish the exact audience present, the use of behavioural data suggests that the intended target will be present for a TTV ad. 

Becoming fully Digital

This progression potentially marks a huge step forward not just for TV but for the media industry in general

However it could lead to ads being purchasable on a CPM level (and eventually a biddable level - though this would be years away).  

In some regard we have already seen a movement towards the digital eventuality, with in-banner and in-app banner activity being purchasable on Xboxes and Smart TVs.  This aspect of the new-era TV has the potential to even move to a CPC or CPE model, though - whilst it'd be grand to say that SMART, interactive (e.g. where you can visit a website straight from an ad) TVCs have the same potential - due to diminished volumes, there lacks the business model to support such a move.  That said, we may see a different sort of engagement for standard TVCs.  As AV and consumers gets ever more connected and Smarter, it is expected that we will be able to draw in internet data to live ads.  Dynamic optimisation of creatives being currently done online through enterprises such as DOT, this sort of auto pulling of relevant data could take engagement of a standard ad to the next level - think Paddy Power "live" odds updated ads, but pulling in browsing data.  Whatever the future holds, as the technology around TV and its accompanying second screen continues to progress we can expect to be able to create immersive  individual experiences; at scale.


Having been one of the more stagnant mediums from an innovations standpoint it's unlikely that this ship will turn that quickly, however over the next few years there lies real scope for a complete overhaul in not only how media buyers purchase TV, but of how consumers interact with and consume TV. Only trouble is, having been promulgating this rollout for some time to no avail, it seems the Sky is still the limit on any substantial progression.

[1] Though as a potential, Experian data could be used as a mid-point between the two extremes for demographical location based targeting, though this may unnecessarily confuse things.
[2] It is expected to be able to reach a maximum of 5% of their total subscription audience.
[3] Creative agencies also favour TV, however this is partially due to it resulting in the highest amount of revenue for them
[4] Though in order to maximise its potential, greater levels of cross media collaboration will be required than currently occur between digital and TV.
[5] Though individual log-ins are unlikely at present, as advances with SkyGo continue this personal data could be mapped to household viewing.