The AdNews end of year Perspectives, looking back at 2023 and forward to next year.
Now: Fragmentation
What started as a single source of truth with linear TV has undertaken a seismic shift to streaming. Agencies and partners have become submerged in a sea of acronyms. The creation of new jargon to categorise every new model - from SVOD (subscription video on-demand) and AVOD (advertising video on demand) to BVOD (broadcast video on-demand) and FAST (free ad-supported streaming TV) - has taken its toll. And, debates over what services fall into what bucket and which buckets make up Total TV seem to have distracted everyone from the real goal.
To be clear, there’s nothing wrong with the acronyms themselves; we need the silos between the groups for things like content and distribution rights. However, what this year has highlighted is that a fragmented approach to a fragmented audience hasn’t necessarily been the best idea.
TV audiences may be at their most divided to date, but from a planning point of view, advertisers need to start taking a holistic approach when planning any video campaign. Especially as we enter 2024 ankle-deep in a new era of hybridisation - where the lines between SVOD, BVOD, AVOD and FAST are being blurred.
Next: Hybridisation
When it comes to TV, one thing has been crystal clear this year: one size no longer fits all. Some of the world’s biggest players are starting to evolve and merge their offerings, bringing with them a new media ecosystem.
Just a quick glance across today’s landscape and you’ll start to notice Original Equipment Manufacturers (OEMs) offering free ad-supported streaming TV (FAST) solutions while traditional TV broadcasters add live, FAST and subscription video on demand (SVOD) to their service. There’s change happening around every corner.
One of the biggest and boldest changes this year has been the rise of ad-funded streaming, which suggests the future of TV is going to have more in common with the past than we originally expected.
As inflation and other macroeconomic factors take their toll, people are reconsidering how they spend their money in the subscription space. As a result, streaming services are having to rethink their strategies to appeal to a wider set of cost-conscious viewers.
The notion of introducing ads after a decade-long, ad-free streaming experience would have seemed impossible just a few years ago. But as we near the end of 2023 many streaming services that pioneered ‘binge watching’ and exploited their key differentiator of being ad-free have now introduced or defaulted their basic tiers to ads.
The impact across the industry in the last 12 months has been part of every conversation, and we expect to see even faster adoption of ad-funded services in 2024. For advertisers, it’s going to be increasingly important that they understand the insights and behaviours of these evolving streaming audiences.
Later: Convergence
The fast-growing adoption of Smart TVs and the rise of app-based viewing is nothing new. But the impact and challenge ahead is now starting to become evident. For advertisers to truly leverage the changing landscape they need to go beyond the screen and connect the dots across consumer journeys.
During 2024, as retailers continue to understand the value in their owned media, we’re going to see more activity and opportunity on digital out-of-home screens. The expected growth in this sector, as part of a wider, unified media ecosystem, will enable brands to engage their target audiences regardless of whether they’re on the sofa or out shopping.
It’s unlikely there’ll ever be a magic bullet to cross device measurement and a unified currency across total screens. However, seeing multiple players pull in the same direction in a bid to enable currency and measurement that incorporates all forms of video is an incredibly promising sign of things to come.
By Alex Spurzem, Managing Director, Samsung Ads ANZ & SEA
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