Nine is coming after Google and Facebook to expand the market for total television.
The media group last week held a total television briefing for market analysts at its head office in North Sydney.
Analysts at Goldman Sachs say the Nine executives provided insight into meaningful BVOD yield.
“Management remains optimistic in continued BVOD audience growth from free-to-air migration,” say the analysts.
This outlook is supported by: Live BVOD viewership; recognition of BVOD co-viewing (75% minutes on connected TV); the launch of measurement VOZ data in February to purchase both FTA/BVOD ads.
Michael Stephenson. chief revenue officer Nine, gave a long briefing in tandem with high profile chief investment officer, Seb Rennie at GroupM AUNZ
Stephenson: “When 9Now we're nine now launched in 2016, we made it mandatory to sign into the platform and people thought we were mad … no one will give you their email address and allow you to target them on the internet, in return for accessing your content.
“Of course, nothing could have been further from the truth. And it's the reason today we have 20 million signed in users.”
And Nine has been building the depth and breadth of its first party data ever since, including deals with Adobe and Salesforce.
In February next year, VOZ will launch, giving audience measurement for total TV. “Every day all of the media buyers around the country will get a daily database that they're able to start analysing,” says Stephenson. “And over time, that will become the currency.”
He says the free-to-air market is valued around $3.4 billion. This is sliding each year by about 3%, or $100 million.
The BVOD market is smaller, around $400 million, but growing at 35% or so.
“And it's the combination of those two marketplaces, the free to air market and the BVOD, market that we have defined as the total television market to this point,” says Stephenson
“But there are two other marketplaces today that we don't operate in. We don't compete in the Foxtel market, they get an enormous free kick.”
And the digital video, a $2.4 billion market, is growing at 7% per year, or about $170 or $190 million a year of revenue.
Stephenson: “Why can't I get more of that money?”
Seb Rennie at GroupM AUNZ: “I think the market dynamics are like that, primarily because we've used each channel for different things traditionally.
“Free-to-air TV has been the big awareness driving platform. And then on the other side of the chart, you've got YouTube and Facebook, which provides more of an immediacy.
“But effectively, the advertising marketers use these things for individual goals. As we see convergence, we think there's an opportunity to bring them together. And that convergence really needs to be driven by measurement. So that's why VOZ becomes so important, we can bring the measurement together, then our ability to optimise dollars across each of these pillars to drive a better outcome to reach audiences.”
Stephenson: “If we include the entire competitive set, not operating in siloed markets anymore, for the very first time we'll be able to compete in the total video market.
“Why? Because the dynamics in that market are changing. And I think we're at the forefront of that. And we need to maintain our position. If we can get this right, then we have the ability to operate in the $7 billion total video market.
“And as a big section of that, dominated by social video, user generated content that is dominated by YouTube and Facebook.
“Of course, I'm not that naive to think that total TV is everything to everybody, because it's not. And there are some reasons why people buy that non professionally produced, user generated unmeasurable, completely skippable advertising.”
However, he says the research shows television delivers more sales volume than any other media channel.
“We've proven it independently. We've proven that total television you get a greater return on your advertising investment in total television than any other platform in particular versus the global platforms, Facebook and Google.
Seb Rennie at GroupM AUNZ: “One of the reasons TV has been so successful over the years is because of the efficacy. Advertisers are looking for effectiveness.
“And the way that we bring these together is going to be all about combining that … the power of the two platforms and connecting the new and to prove that effectiveness.
“That's not to say that other media channels aren't effective. But TV has traditionally been the lead. And it's shown it's been proven to drive a halo effect. So the continuing importance of of TV is going to be driven by effectiveness because that's what advertisers are looking for.”
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