THE ADNEWS NGEN BLOG: What HbbTV could mean for advertisers

2 September 2013

Within our industry we are surrounded by advertisements. We create, we buy and we sell. We live and breathe advertising but how many of us actually enjoy seeing ads within our own personal time?

Our industry is constantly evolving with technological change and consumer behaviour. We have now found ourselves in an era where the consumer has more power than ever. We have developed a love/hate relationship with advertising across all mediums. Consumers complain if they are inundated with ads yet they will travel thousands of kilometres to see Time Square’s Broadway District in New York.

At what point will consumers draw the line with advertising and start opting to pay for something that is already free bar advertisements and where does this lead us in terms of advertising?

HbbTV (Hybrid broadcasting) looks to become the new face of free-to-air TV, aiming to keep itself relevant in times of growing internet users, subscription TV and the long-awaited NBN. Free-to-air TV has, like most of us, adapted to stay relevant within the market. One of the key selling tools of HbbTV is that subscribers have the option to avoid ads.

Channel Seven has already announced its launch of this service by 2014 following the success in Europe, United States and Asia.

The concept seems great, who wouldn’t want to get through an episode of Big Brother or Real Housewives in ABC-style, without ads?

Following a similar approach to Spotify’s business model, consumers have the option to opt in to the premium service for a small monthly fee. Globally, Spotify has 24 million users. 25% of those users actually opt in to pay for the premium packages. Are we able to apply this model from digital audio to free-to-air services or ‘freemium’ and see the strong potentials of shaking up our current models, moving into a strong focus on corporate sponsorships and branding?

In times of economic hardship, the affordable luxuries are usually the first to go. Magazine sales decrease, we spend less on our beauty and even reassess our subscriptions. What happens when another recession comes around the corner and consumers are forced to reassess their budget? Will there be spikes in standard free-to-air viewership and advertising increases and how will this affect our jobs working in the industry?

While digital has been siphoning off TV ad dollars, we must remember the strength of free-to-air TV advertising for reach. Samsung’s marketing director recently warned brands that avoiding TV was a foolish decision to make. Free-to-air TV remains one of our most interactive screens with more than two million Australian homes now owning a smart TV. Consumers are at the peak of their choices with the marriage of internet and TV. Bringing in interactive mobile applications such as Jump-In and Fango pushes consumers to engage with the brand they see on TV even more.

Though with all these choices it seems the consumer gets the final input on what content they want, when they want it and what they unquestionably do not want. So how long will it be before this array of consumer choice takes effect in our industry? And what we now know as 'free' evolve into 'freemium'?

Rinaldi Pandika
Account coordinator

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