The traditional television model is at risk, writes Havas Media Group's Julia Jordan - and so broadcasters must embrace the new dawn for video advertising
The traditional broadcaster business model is being challenged in terms both of competing sources of content provision and the overarching impact of technology on viewing behaviour.
With this, viewer expectations of the video (and advertising) experience will also inevitably evolve over time (how many parents of young children have observed their offspring frustrated that the TV isn't touch screen?)
BARB establishment survey captures the growing take up of OTT services; Enders Analysis estimates that SVOD platforms including Netflix, Amazon and NOW TV achieved a combined reach of 24% UK households at the end of 2015.
Twitter, Yahoo, Facebook and Google are all making inroads into production and rights acquisition with a view to becoming destination platforms for long form video content.
With 90% UK millennials owning smartphones and 60% owning tablets, streaming content on devices is normal and competition for video engagement is high.
Consecutive Ofcom Market Reports show that with the increasing proliferation of devices and broadband penetration a growing proportion of the population are using alternative screens for video viewing. Time spent viewing devices now exceeds time spent viewing TV for all demographics aged under 45.
In the (still strong) traditional TV landscape broadcasters rule the roost and the regulated EPG supports PSB prominence.
In the tech and device-led environment the advantage of the traditional broadcasters is neutralised; the connected/online viewing experience is increasingly sophisticated and the broadcasters are arguably disadvantaged through legacy focus on traditional technology and platforms.
For example, Netflix aims to personalise viewing options compared with a broadcaster "most popular" listings to guide viewing choice. With Snapchat and Facebook Live, content discovery is different, influenced by celebrity, brand and data rather than static navigation devices.
According to Thinkbox, in 2015 of all individuals' (4+) video viewing, 61.6% was to live TV and just 43.5% of 16-24s' viewing was to live TV. Obviously that means that 38.5% all viewing (and over 56% viewing of 16-24s) was NOT.
It would be remiss not to point out that of the remaining viewing a fair chunk (14% for 4+ individuals) was to broadcaster content via playback and their own catch up services, however the point is that for this and all other video viewing it is fair to say that the viewing experience is different.
And the reason for this migration is that viewers have opted for something different to traditional scheduled TV viewing, and the motivation for this is control, convenience, relevancy and sometimes (dare I say) ad avoidance.
So TV or video viewing is becoming increasingly personal with people watching what they want, when they want, how they want.
Online video will increasingly influence expectations and behaviour but as an advertising platform it still needs to mature"
There is no denying that as a device the TV set remains king for video viewing and that TV remains very effective as a mass-reach advertising medium using the accepted currency of consolidated audience figures. But for how long, with a backdrop of continuing evolution of choice and expectation, depends on the industry's ability and inclination to invest and evolve.
Online video advertising does not offer the same mass reach in a simultaneous moment as does the brand-building powerhouse of traditional TV, but by harnessing the opportunities offered by technology and data, it does offer dynamic personalisation, targeting the right creative treatment of the right product to the right person at the right time.
In the same way that TV aggregates 7-day catch up viewing, the aggregation of targeted advertising at scale, mass personalisation, promises a compelling opportunity to advertisers if broadcasters can make it happen.
With connected TVs and set top boxes we have the technology to support addressable advertising in linear TV. Sky, with the benefit of being platform and broadcaster, have made admirable advances for Sky Media channels with Sky AdSmart and Sky Advance, however the broadcast industry is constricted until these opportunities are extended to all broadcasters and other platforms follow suit.
Easier said than done - previous attempts at industry collaboration have failed or been blocked by Competition Commission.
By extending the AdSmart equivalent proposition across all connected set top boxes, linear TV could offer at scale addressable advertising based on location, household demographic, viewing behaviour.
The addition of third party and advertiser data can then offer opportunities that evolve the medium of TV from delivering awareness and mass brand appeal, to also offering full path to purchase. Actively measuring the impact of TV through to sales both off and online is becoming a reality.
Where once the power of TV was the instantaneous reach of a 30" spot in Corrie, whilst this still exists (diminished but still powerful) the medium can and should also embrace and support new models of advertising, offering hybrid advertising models that are more relevant and valued in the digital age, by viewers and advertisers alike.
Online video will increasingly influence expectations and behaviour but as an advertising platform it still needs to mature. Currently there is no consistent metric for ad views between the different platforms and ad formats and ad load are not yet optimal.
So, in the short to medium term, TV remains a powerful and effective medium. However to continue to thrive broadcasters, and the platforms that depend on continued investment in compelling content, must invest and collaborate in the areas of technology, data and strategies to seize the moment and evolve.
A collective acceptance of a smouldering (if not yet burning) platform should provide the impetus to explore.
Broadcasters can evolve to deliver all things to viewers and advertisers. From mass reach to mass personalisation - the future is potentially golden.
Julia Jordan is managing director of Havas Media Group, responsible for investment and solutions