As the decade draws to a close, ExchangeWire has invited thought leaders from across the industry to share their predictions and insight into what 2020 will hold for the ad tech and martech industries. Under the spotlight today is TV, with the landscape set to change drastically over the coming year with the proliferation of streaming platforms, and the continued growth of CTV viewership and solutions.
AVOD to flourish, but danger for broadcasters
AVOD will get its Pokémon GO moment in 2020, but broadcasters face an existential threat.
Today, it’s difficult in the UK for advertisers to access scaled opportunities to buy Video on Demand programmatically. Broadcasters and other CTV apps have been slow to bring a fully-fledged programmatic offering to market.
YouTube is the only scaled solution that supports the targeting, measurement and first party data use that advertisers expect from a programmatic solution.
But this is all set to change with the UK release of IMDb TV in 2020. This will do for AVOD what Pokémon GO did for AR, giving the lightbulb moment on what's possible. Why?
Firstly, with signed deals with Warner, Sony and MGM, IMDb TV will provide its audience with free premium content on an ad supported model.
Secondly, brands will be able to buy ads via the Amazon DSP using purchase intent data, allowing sophisticated targeting, whilst providing the contextual and demo targeting options favoured by TV buyers.
In contrast, broadcasters slow adoption of programmatic, and especially their very cautious approach to enabling proper measurement, has been frustrating for digital savvy video buyers.
The ITV partnership with Amobee and Roku’s purchase of DataXu have indicated early signs of them taking the digital opportunity more seriously.
But broadcasters are up against increasingly stiff competition in the UK. Especially if, as predicted, Amazon releases the same targeting and measurement functionality for the Premier League games on IMDb TV for the 2020/21 season.
Broadcasters will need to turn this around quickly, or 2020 will see a major shift in ad-dollars to Amazon and Google.
Dan Larden, managing partner, product and partnerships, Infectious Media
Multi-screen use needs to be leveraged
Paid TV streaming services have certainly gained momentum in 2019, and while the trend may be draining advertising revenues, I believe ads can survive if they know how to ride the wave. They need to step up and listen to consumers carefully. Agencies and their brands need to be nimble and need to be able to adapt to this evolving OTT landscape. This means redistributing ad budgets towards sponsorship and advertiser-funded programming, second screen campaigns on social and other awareness mediums that align with a digital model, such as out-of-home and audio.
Brands need to be reassured and reminded of society’s penchant for multiple screens and digital devices, and this needs to be leveraged moving forward. Brands also need to ensure they’re hitting the bull’s eye with their messaging and campaigns by taking advantage of data-driven audience insights. If brands can keep up with how modern audiences consume media, they will be well placed to succeed in 2020.
Hannah Thompson, programmatic account director, Tug
Going hybrid is a win-win
If 2019 was the year of the streaming war, 2020 may be the year of streaming skirmishes. With nearly all the new platforms now having launched in the UK (with the exception of Disney+), it’s now a case of jostling for market share and keeping users interested beyond the big glitzy launches.
After all, competition is fierce, and consumers simply don’t want to keep forking out for subscriptions in order to watch their favourite programs. That doesn’t mean the appetite for content isn’t there – our latest research shows that UK consumers watching almost seven hours of streaming content a week – but the appetite for endless subscriptions is not. The overwhelming majority of consumers (88%) currently don’t have more than two subscriptions.
Ad-funded models could be the answer to providing consumers with the content they want in 2020, without demanding more cash from them. That’s good for consumers, and it also offers streaming platforms a way to stand out in what is an ever-growing, and now very crowded, market.
There’s wider benefits to these hybrid and ad-funded models, too. Our survey shows ads can be a real plus for viewers, with 35% of consumers purchasing an item after seeing an ad for it and 18% discovering new brands online ad that they feel they wouldn’t have found in a store. What’s more, engagement on streaming platforms is significantly higher than elsewhere – with 54% pausing programs to learn more about products or services shown to them.
In essence, going hybrid is a win-win for consumers, broadcasters, and brands alike – funding better content, expanding reach, and offering reliable, brand-safe, privacy compliant access to consumers. Here’s to more of that in 2020.
Gavin Stirrat, VP EMEA, partner services at OpenX
Ads here to stay
2019 has been an eventful year for TV and streaming – but it isn’t over yet, and 2020 is likely to see further consolidation in the space.
With more platforms and providers emerging, broadcasters and streaming services will have to keep pushing for bigger, better content to keep consumer attention firmly on them and not their competitors. Our TGI data shows that while UK consumers are increasingly likely to pay for on-demand TV subscriptions, they’re unlikely to pay for more than three such services.
However, what we are now facing is essentially a billion-dollar content arms race. Broadcasters and streaming platforms are turning their backs on existing licensing agreements and focusing time and investment instead on developing their own proprietary content making it harder or those who aren’t willing to pay for additional subscriptions to access the same breadth of content.
But it’s in the interest of content creators to keep viewers on side, and the drive for value – and for eyeballs – is likely to foster the increasing emergence of so-called ‘hybrid’ models to cater for both those who will and those who won’t pay. According to our DIMENSION report this year, a significant 48% of consumers are willing to subscribe to new services if it means they can get access to premium content – rather than in a bid to avoid advertising.
Media owners are already finding new ways to monetise their platforms, whether ad-funded, fee-based, or even both at once. So looking to the coming years, ads are certainly here to stay – and will keep content free for everyone – but further personalisation will, ideally, make them indistinguishable from other content.
Regardless of what the future holds, accurate measurement will become increasingly crucial in taking all these different types of platforms into account to ensure viewers get what they want, when and how they want it. By approaching measurement in an intelligent, holistic way, and using real consumer insights to tailor content accurately, there’s no reason why the future of streaming can’t be a win-win for all involved, creating a better user experience – and a better ecosystem – for brands and consumers alike.
Mark Inskip, CEO, UK & Ireland, Kantar Media Division
Emergence of unified measurement metrics
Connected TV and video-on-demand (VOD) services grew in 2019, which looks set to continue for the foreseeable future with new entrants such as Disney+ entering the fray. As a result, consumers will increasingly tune in to their favourite shows through these services as well as linear TV. The increase in the number of advertising-video-on-demand (AVOD) services such as Dplay from Discovery channel and Rakuten TV, in particular, will provide plenty of new opportunities for advertisers to find ‘elusive’ new audiences.
The challenge with the proliferation of VOD, and an increasingly fragmented TV ecosystem, is the inconsistent ad measurement metrics between services. While the end of 2019 was defined by VOD divergence, 2020 will likely see some harmonisation between VOD services as they do their best to attract advertising budgets. Media buyers will want audience data comparable between linear, VOD and digital inventory to make informed decisions about planning. This pressure means we may see the emergence of a new unified set of measurement metrics, or reporting data, used by multiple vendors so advertisers can appropriately allocate their budgets.
David Barker, managing director EMEA, Samba TV
Value of CTV advertising opportunity cannot be underestimated
To call 2020 the year of Connected TV may seem like a dis-service to the leaps and bounds the advertising industry has made over the past 12 months. But this is only the beginning. With the entrance of three new players to the streaming market in as many months, the so-called ‘streaming wars’ are set to rage fiercer than ever as we head into the new year. And our research revealed that the majority of UK consumers aren’t willing to spend more than £20 a month on streaming services, meaning it’s only a matter of months until some of the key players will be forced to adopt advertising as a means to funding quality original content.
The value of this advertising opportunity mustn’t be underestimated. How often are advertisers presented with the opportunity to reach brand new, valuable audiences – like Gen Z - at scale, through one of the most powerful advertising channels? It’s a no-brainer for brands. But rather than our favourite shows being broken up into the 15-minute portions we grew up with on linear, we’ll see TV advertising innovate beyond recognition with CGI product placement and branded content developed to complement the viewing experience.
A longer term prediction is, similarly, the culmination of a sentiment that’s been building - not just over the past year, but the past decade. Growing numbers of advertisers are waking up to the importance of objectivity when it comes to advertising and the benefits of investing their spend beyond the walled gardens – whether that’s greater control of their data, more transparent pricing or more objective measurement. Beyond this, the industry is beginning to appreciate just how important advertising on the open web is for society more generally, to preserve and fuel the content required to educate and inspire us all.
For the first time, we’re starting to see large brands, who have experienced the power of programmatic, prioritise the open web and add walled garden inventory to complement their campaigns, rather than the other way around, as we’ve previously been accustomed to.
As we enter a new decade, I believe the next ten years will bear witness to the end of the walled gardens’ unsustainable practices and the flourishing success of the power of the open internet for all – consumers, content providers and advertisers alike.
James Patterson, VP, EMEA client services and global operations, The Trade Desk
The connected decade
2020 will mark the beginning of the connected decade in which consumers will be rewarded with a new wave of internet-delivered TV viewing opportunities. Across Europe, we see different rates of adoption for connected TV based on a number of factors including smart TV penetration, internet speed and consumer awareness. Overall though, connected TV viewing in Europe has shown meaningful growth this year, demonstrating a shift in consumer preference.
Direct-to-consumer apps will evolve next year as businesses such as Pluto TV expand their European services following their launch in the UK and Germany in 2019. Traditional broadcasters will also continue their commitment to developing their OTT products and services.
Device manufacturers are the sleeping giants of advertising-supported VOD services and in 2020 they will make significant moves in the OTT viewing market. Not only do these companies provide a seamless, personalised experience for the viewer via universal navigation and recommendations across OTT apps, they will also drive the category forward with premium experience coupled with unique data opportunities.
Finally, 2020 will be an exciting year for live OTT viewing. The UEFA European Championships and 2020 Olympics in Japan will provide advertisers and their agencies with the perfect opportunity to use server-side ad-insertion technology, allowing them to address specific audiences with tailored messages at scale.
Ed Wale, managing director, SpotX
Watch out for Amazon
Linear TV has been losing advertising dollars to OTT/CTV and the trend is forecast to continue. Amazon will capitalise on the shift like no other platform in 2020.
As the third largest advertising platform in the US behind Google and Facebook, Amazon’s growth has come mainly from its AMS (search) and APP(display) offerings. Lately, it has increased efforts in OTT, including a rumoured licensing agreement for a video ad-serving platform similar to Comcast’s Freewheel.
Digital marketers understand the power of Amazon’s shopping data in combination with its predictable algorithm, but three other factors will make the sight, sound and motion delivery of Amazon OTT more attractive to many advertisers – retailers specifically – than other current offerings including linear TV.
Firstly, multichannel tracking: In 2020 it will be possible to follow audience behavior from programmatic display and OTT to purchases in and out of platform.
Secondly, accurate measurement: Amazon’s consumer data is deterministic, across all screens, not reliant on cookie or IP-mapping. It will also only be available within its platform, maintaining security and exclusivity.
Lastly, increased quality content: Amazon is increasing its original content as well as adding movies and syndicated series.
There is typically an approval process if an advertiser doesn't own the brand it sells, which limits access to specific retailers, but Amazon has taken a different approach and allowed all advertisers to take advantage of their OTT offering.
Ed Camargo, MD US, Incubeta NMPi
Focus on data-driven before addressable
Before addressable, the highest focus for TV must be on data-driven: how to use better data capabilities, and go beyond socio-demo, to better optimise media-planning. TV is still a mass media, in that its effectiveness is due to its capability to reach lots of people very quickly. All eyes are currently on addressable TV, the fanciest topic through 2019, which is certainly a good tool to optimise reach on target, however it simply won’t be the core part of many TV plans, and its development will take years in lots of European countries, whereas data-driven TV could be operational in a shorter time period.
Emmanuel Crego, director general, Values
Streaming optimisation: The new norm
In 2020, the industry will see the impact of the ‘streaming wars’ with new services continuing to enter the market. However, this fragmentation should not be viewed as a challenge, but rather a prime opportunity for advertisers to extend the reach of their campaigns. Ad-support streaming platforms will increasingly be used by advertisers to complement linear, acting as “reach extenders” that allow brands to engage with audiences that they wouldn’t reach with linear alone. The potential to then optimize these multi-channel campaigns will be huge.”
“Although OTT platforms currently attract only 3% of TV media budgets, advertisers can reach 29% of viewers through streaming. The next year will see brands jump on this opportunity in force. Optimising streaming was in its infancy in 2019, but 2020 will see it evolve into the new norm. OTT will become a fully measurable, scalable and accountable part of advertisers’ media mixes, enabling greater reach and ROI as a result.
Mark Hudson, head of business intelligence, TVSquared
Innovation in ad sales and dynamic insertion systems
One of the major trends we expect to accelerate in 2020, is the continued shift towards impression/audience-based selling. We see it happening throughout North America at an urgent pace with content publishers and distributors. Our largest customers throughout Europe and Australia are already allocating a significant percentage of their inventory to audience-based sales, which demonstrates the broad adoption globally.
Next year, expect to see more broadcast ad inventory sold in an audience-based manner, with innovation around cross-platform initiatives. We’ll see content providers really start to aggregate audiences across broadcast, linear, OTT and on-demand. Converged selling across these disparate platforms makes it simpler for advertisers to reach their audiences, at scale, and that’s where the revenue and optimisation opportunities really start to emerge.
To this end, we’re anticipating a lot of innovation and deployments in 2020 around ad sales and dynamic insertion systems that give sellers the ability to aggregate and deliver the desired audience to their buyers, at a premium, without the inefficiency of spot-based models. For our customers the numbers don’t lie. They’ve found that audience-based selling/optimisation can boost inventory efficiency by as much as 20% or more, so they can maximise revenue while consuming the most appropriate inventory. This is a sea change that will play out over the next several years, truly changing the way advertising is bought and sold.
Dave Villano, chief operating officer, AdTech, Imagine Communications
Addressable becoming reality
Addressable TV feels like it is finally building towards being a reality for 2020. With ITV launching its Amobee-powered platform and Channel 4 inventory now available via AdSmart, 2020 will be the year when we have some more serious conversations around CTV. The major hurdles that remain are cross broadcaster collaboration on measurement, the hefty premium attached to targeting today and the lack of flexibility in buying TV. That said, the positives are that all broadcasters now recognise the need to innovate to avoid further downturn in audience and revenue.
The data pools that our commercial broadcasters have started to amass, if enhanced and enabled for activation through an independent addressable buying platform like The Trade Desk, can help TV fend off the American digital platforms. There is a definite demand from brands for more targeting to reduce wastage but today the relative costs of spraying and praying via linear TV vs targeted TV is out of kilter. That will change and as brands recognise the increased ability to target smaller audience cohorts that have a much higher propensity to convert, the premium involved in addressability will become a thing of the past.”
Paul Frampton, President Europe, Control v. Exposed