Consumers’ adoption of new viewing platforms will reshape Europe’s television advertising market, according to a Forrester report published today based on a survey of more than 22,000 European online adults and interviews with vendors, user companies, and experts, such as Adap.tv,AOL GoViral, the BBC, BSkyB, Virgin Media, and YouTube.
“The bottom line: disruption is coming that will make established TV buying strategies and practices ineffective,” writes Forrester Analyst Jim Nail in his blog post. “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.”
As European TV viewers get used to more choices — with more channels, pay services, and viewing devices — an increasing share of their viewing will fall outside the bounds of established advertising strategies, and proven media planning practices will fail to deliver the audiences and results on which brands depend. Marketers must prepare for this new ecosystem by testing new approaches to TV advertising, planning and piloting innovative formats outside the 30-second spot, and evaluating the ROI potential of the new capabilities of addressable advertising.
In his new report, Jim identifies five new viewing behaviors that are set to disrupt TV advertising in the next five years:
Change 1: On-demand and time-shifted viewing.
Change 2: TV anywhere.
Change 3: Video portals that attract sizable audiences with professionally produced content.
Change 4: Addressable advertising.
Change 5: Programmatic buying.
The study shows that younger adults in Europe are most enthusiastic about these new viewing options. In all countries, the 16-to-24 age group leads in time spent viewing TV on computers and, except in the UK, shows the strongest adoption of viewing on smartphones.
According to the research, industry structures, regulatory schemes, the competitive environment, and the pace of consumer adoption will vary in each country across the region. For example, the UK innovates first. Public-service broadcaster the BBC has played a unique role in triggering the evolution of TV in the UK. Its public license-fee funding model and its charter to provide content to every UK consumer have spurred the BBC to introduce the European TV industry to the idea of “catch-up TV” and on-demand viewing, with its 2007 launch of the iPlayer app.
“Change won’t come overnight, so marketers have time to educate themselves, their teams, and their management,” according to Jim. “Long-form video content will continue to attract the lion’s share of consumers’ viewing time and will remain the anchor of advertising plans. An increasing portion of those viewing activities will happen on new devices and sites. Advertisers must evolve their strategies and processes to take full advantage of new ways to reach and engage viewers.”