Harnessing advertising with connected TVs

Yesterday I was invited to join a panel discussion at the Connected TV World summit (conveniently held at the Royal Society of Medicine just down the road).

The panel comprised Oli Newton (Head of Strategic Partnerships, Starcom MediaVest), Olivier Van Wynendaele (Senior Manager, Production Planning & Business Development, Toshiba Europe), Tom Wolfe, Senior Director, Advanced Advertising, Rovi),  Jon Block (Head of Commercial Innovation, ITV) and myself  and was chaired by Nigel Walley (MD of Decipher).

The subject of our debate was ‘Harnessing Connected TV Advertising’:

‘….Connected TV gives broadcasters the chance to present their catch-up TV services where people really want them, on television, independently of Pay TV operators. This session will analyse what the advertising industry thinks of Connected TV and how Connected TV can offer new advertising inventory, the prospect of deeper engagement for brands and more opportunity for interactive and transactional processes.’

A brief summary of what we discussed is below.

The first thing to clarify was the definition of ‘Connected TVs’ – for the purpose of our discussion we focused on Smart TVs (so the majority of new TVs sold these days by the likes of Samsung, LG, Toshiba etc.) which are Wi-Fi enabled and can connect to the home internet in the same way as your PC, tablet or smartphone. We also included connected X-Boxes in our definition, as X-Box Live currently offers similar ad formats to that of Smart TVs.

Nigel kicked off by stating that often in these ‘new media’ forums there is a perception that the online world is set to ride in to solve the problem of wasteful untargeted TV advertising. I made the point that TV advertising is and has always been targeted, the way viewers self-select their channels and programmes and the proliferation of digital channels spanning a range of genres allows us to be extremely targeted – we also only pay for the audience we are buying (if we buy Men we don’t pay for Women or Kids who watch our ads for example, so the perceived wastage is not actually there) remember also that we do not pay for any of those ads that are fast-forwarded by DTRs.

The panel agreed that this new technology presented exciting opportunities for advertisers, but that it is still very much in its infancy – we predicted a  long period of evolution rather than the revolution some of the tech companies would have us believe. The immediate challenge to Smart TV manufacturers, if they are to deliver any kind of scale of viewing to their apps and portals, is breaking through peoples’ existing viewing patterns. Old habits die hard and the vast majority of people still watch TV in the same way – there is a clear hierarchy to how we choose what to watch: we check out what’s on BBC 1, BBC2 , ITV1 and C4 before perusing a handful of well-known digital stations, we then move to our DTR/planner to see what we have recorded before moving to catch up TV (BBC iplayer, ITVplayer etc.) and finally on demand (Anytime+/Virgin Central e.g.).

With a Smart TV it’s likely that the use of its connected functionality would fall at the bottom of this hierarchy for the time being – a key challenge was identified in taking ownership of the remote control. In most Sky and Virgin households (10.5m and 3.8m UK homes respectively) the remote for the TV is not even used, with all functionality resting with the box remote.  Obviously the rise of Netflix and Lovefilm will help push people in to the Smart TV interface via their TV apps, but any kind of scale is still some way off.

TV is broadly a passively consumed medium and the most successful brand ads are those delivered in a passive way (we’ve talked before about low attention processing…). Bringing traditional online advertising formats such as pop ups to the TV set are likely to jar with the viewer’s preference for passive consumption, so shouldn’t ever really be a consideration.

We talked about the ability to layer social media on top of the broadcast stream (twitter or Facebook feeds for example), however the TV will remain the focal point for the family rather than the individual so it is more likely that social TV experiences will remain on the second screen (something Zeebox have identified and we are starting to have interesting conversations with them already).

In the short to medium term therefore it is unlikely that the way we consume TV and the way it is delivered will change on a mass scale, the power of the TV schedule will remain; the battle of The Voice and BGT or Strictly and X-Factor on Saturday night will remain for a good few years to come.

It is likely therefore that the opportunity for Connected TV advertising will be in less attentive dayparts and the ability to bring online metrics such as CPAs and CTRs to the TV set is an exciting one for clients (particularly direct response) to exploit.

There is also an opportunity to create more immersive branding experiences within the Smart TV environment, but any kind of mass reach will still need to be delivered in the traditional broadcast way.

It was agreed that the convergent age that has been much talked about in the last few years is well and truly upon us (the game has begun as Nigel put it), but that we are still in a test and learn phase.  M&S and Red Bull already have apps on connected TV’s in the UK although it is too early to tell what level of success these are bringing.

It will be a while yet until Connected TVs truly disrupt the broadcast status quo, but they certainly have the capability to change the living room dynamic – it is incumbent on broadcasters, manufacturers, clients and agencies to shape the consumer experience in this early phase in order that they fully realise their potential.

Posted by Tom Blaza (@teblaza)

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