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The beginning of the end – or the start of
something new?
Opportunities and challenges for commercial
broadcasters
Client
logo
20th October 2015 │Contact jon.watts@mtmlondon.com │ Tel +44 (0) 20 7395 7510
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Introduction
MTM is an international research and strategy consultancy.
We help clients understand and respond to digital change
Consumer insight
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Qual and quant research
Content, brands, ads, technology
Demand and pricing analysis
Market and policy
research
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Market and economic analysis
Competitor benchmarking
Market sizing and forecasting
Strategy and growth
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Vision and strategic planning
Opportunity assessments
Commercial growth strategies
Service design
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User and market needs analysis
Service and experience design
Proposition development
Digital transformation
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Organisation/business process design
Leadership coaching and support
Implementation and action planning
Challenges and opportunities for broadcasters
1. Setting the scene
2. Areas of opportunity
3. Key challenges
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1. Setting the scene
TV distribution is changing – from dumb terminals into
connected devices
Analogue TVs
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TV sets
Digital TVs
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Set-top boxes
TV sets
Integrated apps
Networked devices
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Set-top boxes
Connected sets
Digital media streamers
Gaming consoles
Second-screens
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)
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.
Source:
(1) Thinkbox (2015)
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1. Setting the scene
However, some demos are changing very fast – consumption
is becoming more complex
Millennial tastes
A non-linear world
Age of reality
A new ‘golden age’
A social soundtrack
Rise of OTT services
The impact of YouTube
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1. Setting the scene
Broadcasters face growing competition from online
video businesses – the competitive set is expanding
TV
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
Ster
RTL
SBS
BrandDeli
The 5th
Channel
Chris Locke, Trading Director
of Starcom MediaVest Group
AOL Originals
Google Preferred
Facebook Premium
MS
Yahoo
Premium
VOD
Programmatic
video
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1. Setting the scene
As consumption changes, commercial broadcasters have
access to new data sets, supporting new kinds of advertising
Growth of
connectivity and
mobile
Growth of
social media
Sophisticated
TV audience
measurement
Shift of
time/activity
online
Proliferation of
OTT services
Syndication &
distribution
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1. Setting the scene
At a high level, digital data can be categorised into three
broad categories
Panels
Traditional (+
multiplatform)
measurement
panels
Digital services data
Server data
Social interactions
Registration
Digital networks
Third-party
Volunteered
interactions
Commercial
suppliers
Cookies and
trackers
Bespoke research
Devices and
networks
Media owners …
… and advertisers
Internal data sources -
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1. Setting the scene
For broadcaster sales houses, advanced data strategies are a
strategic priority
vs.
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High reach, with limited relevance
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Data verifiable through measurement
panels
High reach and high relevance due to a
variety of targeting options
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Data contaminated by high levels of
online fraud
Digital data – challenges and opportunities for broadcasters
1. Setting the scene
2. Areas of opportunity
3. Key challenges
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2. Areas of opportunity
The proliferation of data is clearly creating many different
opportunities for broadcasters
1. Personalisation
6. Testing/optimisation
2. Mar-comms
Data
opportunities
5. Content acquisition
3. Insight and innovation
4. Advertising
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2. Areas of opportunity
Good data clearly supports the development of new TV and
video ad products – a range of complementary options
Broadcast
Non-addressable
Reach
Generic
messaging
Multiple segments
Targetable
Direct
Addressable
Relevance
Targeted
messaging
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2. Areas of opportunity
Let’s explore the experiences of two leading UK broadcasters,
leveraging data to deliver new ad products
• Using personal registration
data to support sales of VOD
advertising
• Using Dynamic Ad Insertion to
deliver addressable
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.
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2. Areas of opportunity
Historically, Channel 4 sold ads on its online video platform in
genre packages
Women
Men
55+
45-54
35-44
25-34
16-24
Factual
Lifestyle
Entertainment
Comedy
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2. Areas of opportunity
In 2014, Channel 4 began selling demographically targeted
ad packages on its online video offer, 4OD (now, All4)
ABC1
16-34
16-34
Female
16-34
Male
ABC1
Female
ABC1
Male
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2. Areas of opportunity
The packages were tested intensively – using big data and
survey research, plus anonymous data matching
11 million
registered 4oD
users
10,000
surveyed
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1st Party registration data
Survey data
Viewing data
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Household size
Income
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Modelled social grade with
80-100% accuracy
Audited by PWC
2. 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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2. Areas of opportunity
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Sky has a long track record of investment in innovation – as its
platform has matured, advertising has become a priority
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2. Areas of opportunity
Developing AdSmart has been challenging – 6+ years to
develop and launch
People
Systems and processes
Technology
Business case
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2. Areas of opportunity
The new offer has been built on advanced data and
measurement – viewing, targeting and results
Demographics
Interests
Product preferences
Ratings
2. Areas of opportunity
In many markets, the business case for TV platform-based ad
products will depend upon gaining share and new clients
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Digital data – challenges and opportunities for broadcasters
1. Setting the scene
2. Areas of opportunity
3. Key challenges
3. Key challenges
The TV industry landscape is complex – making coordination,
alignment and rapid progress difficult
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3. Key challenges
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 - ondemand 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
Media owners
/ publishers
SSPs / exchanges
DSPs
Agencies /
advertisers
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.
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3. Key challenges
Integrating various different audience data sets is a complex
and time-consuming task
10,000
surveyed
All4 users
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Survey data (social grade,
interests, spending, HH
composition)
1st party registration data
Viewing data
11 million
registered
All4 users
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Household size
Income
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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
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3. Key challenges
Lots of broadcaster data is not that valuable, due to low
volumes and limited range and richness
vs.
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Low volume – large no. of registered
users, but majority is low frequency
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High volume – large no. of people
with regular interactions
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Few different variables – e.g. views,
programme type, genre, duration
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Limited value to advertisers beyond
volume and targeting data
Rich data – large no. of items,
promotions, shelf and store position,
shopping history
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High directly-measureable value
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3. Key challenges
As broadcast content is distributed across more platforms, the
availability and quality of data are becoming more uneven
Pay TV platforms
Video aggregators
Mobile devices
Smart TVs
It is increasingly difficult for broadcasters to form a holistic view on their content
consumption as their content is increasingly distributed across multiple platforms
3. Key challenges
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
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Thank you!
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Jon Watts
MTM
Director
20-22 Shelton Street
London
020 7395 7518
WC2H 9JJ
jon.watts@mtmlondon.com
United Kingdom