My new report, Convergence Disrupts Europe's TV Ad Market, looks at the fascinating landscape of TV advertising in Europe. The bottom line: disruption is coming that will make established TV buying strategies and practices ineffective. Marketers need to understand this change, and over the next three to five years, adopt new tools and strategies in order to achieve the reach and results they want from their video advertising.
While each country has unique attributes that both drive and hold back this evolution, five trends are unmistakable across the region:
- On-demand viewing — While on-demand is a small percentage of viewing time now, consumers are embracing the ability to catch up on missed favorite programs or discover other content on streaming services like LoveFilms. Younger viewers especially flock to these new viewing options and make up an increasing percentage of the classic 18 to 44 age demographic.
- TV anywhere — As relates to on-demand viewing, consumers find they're not always in their living room when they want to catch up on their favorite show. Programmers, networks, and distributors are all offering apps and services to make viewing on tablets, smartphones, and computers easy.
- Original online professional content — YouTube isn't just cat videos anymore. There is an explosion of high-quality professional content that won't ever be broadcast. I'll be watching these experiments closely to see how well they engage viewers.
- Addressable advertising — The dream of delivering different video ads to different viewers to match their interests is a marketer's dream. Long talked about — and long delayed — we will see the first broad market implementations this fall.
- Programmatic buying — Internet ad buying has had to adopt this more automated, data-driven mechanism to manage the complexity of online advertising. Now, TV buyers want it too. The big agency holding companies, distributors, and programmers all see it coming, and while there is some concern about pricing pressure in this kind of transparent, open market, there is optimism that it will actually draw more buyers to the market and thus support prices. And AOL made a big bet in this space last week by buying programmatic buying technology firm Adapt.TV.
As a US-based analyst, one of the most fascinating aspects of the research was the convergence of over-the-air, pay TV, and online TV into hybrid set top boxes. Here, cable and satellite have bundled local stations, so if you have one of those options, you don't watch over-the-air TV. But if you want to watch online, you need a separate set-top box, like an Xbox or a Roku. In the UK and France especially, over-the-air is still the bulk of viewing time, especially since the conversion to digital transmission. PayTV is supplemental, largely for sports or other specialized programming. But set top boxes like YouView and Sky Broadcasting's "kit" in the UK pull multiple program sources into one box, making switching between over the air, PayTV, and online content seamless. I envy them, stuck with my cable box and locked into only Comcast offerings!