With more premium content, better connection and data plans, online video watching has skyrocketed over the last decade and is set to continue its upward spiral, but advertisers need to be mindful of what, when and who they’re targeting.
Australians are increasingly using smartphones and tablets to watch their favourite programs as fewer hours each month are spent watching broadcast TV on televisions.
The average person spent just over 85 hours a month watching linear television in the final quarter of 2015, which is five hours less than the comparable period a year earlier, according to OzTAM’s latest quarterly multi-screen report.
While playback viewing was steady at seven hours and 20 minutes, much of linear TV’s loss can be explained by more time spent on portable devices. The amount of time people spent watching content on smartphones increased 154% to four hours and 18 minutes and online video on tablet escalated 147% to just above three hours a month.
“The shift to devices is about more premium content being offered, better connection and data plans – and that should continue to grow,” OzTAM CEO Doug Peiffer told AdNews. Exponential’s head of strategy for APAC, Tyler Greer points to an “explosion” of digital video in recent years.
“The usual way digital video is conceived is as an extension of TV, but TV viewership is declining for various reasons and TV’s reach is not as it once was,” Greer said.
“Therefore, advertisers are looking to place their TVCs elsewhere and what that really means is online.”
Aside from the 55 and over generation, live TV usage dropped across all demographics as TV sets are increasingly being used for other purposes, including video games and streaming services such as Netflix. This shift was strongest in those aged 13 to 18 years, where other TV screen usage increased by 0.6 TARP percentage points at the expense of live TV.
“You can see the usage of the television set, particularly if you look at teenagers, there is a higher proportion using TV for something else and other devices,” Peiffer said.
“I've got one in my household and he's on everything.” Helping drive eyeballs away from linear TV is a growing amount of choice in content that previously never existed.
“We have so many channels that are digital and this isn’t just online now,” Greer said. “We are moving into the living room via Netflix and other digital streamers being funnelled through TV.”
An important trend, noted by most experts AdNews approached, is that content is increasingly user-controlled in ways never previously seen and choice is far greater than ever before. The days of a few media owners having a monopoly on channels and advertising are gone. Or, as Greer puts it: “Now it is completely open, the user decides pretty much everything.”
It’s generally assumed that people prefer longform content, such as Game of Thrones or House of Cards on television – ‘Netflix binge’ will surely be a contender for most over-used phrase of the year soon enough.
Short-form pieces are more commonly viewed on mobile phones and everything in between is the domain of PCs.
Daily media consumption patterns are shifting as people consume TV during set periods in the morning and evening, smartphones on the go, and desktops while at work.
At Channel Nine, explains chief digital and marketing officer Alex Parsons, analysing how viewers consume content throughout the day provides important insights into the type of programming and tone that should be screened.
An example of this is Nine’s Today show, which offers short bite-sized snippets of news, information and entertainment that viewers can consume while getting themselves. Nine’s digital strategy is to eventually replicate all TV content onto its AVOD player Nine Now, which was launched earlier this year.
It’s proving to be popular and only screens content in HD.
Nine hopes the introduction of Nine Now provides viewers with more choice to watch content and catch-up TV when they choose – another sign that in today’s media landscape, user control is vitally important.
Follow the money
As media habits change, the impact for advertisers and media owners is huge. These are illustrated by the changing media agency booking figures recorded by the Standard Media Index.
In the 2015 calendar year media agency bookings for digital grew by $117 million (20.3%).
For TV the growth was a marginal $9m, or 0.2%. Newspaper ad bookings declined $132m (-16.4%) and magazines were down $38m (-14.5%).
The four year shift is even more dramatic. During this period, digital advertising bookings grew by 73% to $1.82 billion, while TV advertising grew 1.7% to $3.62bn. Alarmingly, newspaper media agency bookings shrunk by nearly half to $675m.
A more complete picture of online advertising is recorded in the IAB/PwC Online Advertising Expenditure Report 2015.
It found that Australian online advertising grew 25.3% to reach $6bn in 2015, the first time it had broken through that mark in a calendar year. This included the meteoric rise of advertising on mobiles (up 81% YOY to $1.5bn) and video (up 75% to $484 million).
“This is an outstanding result for the industry,” explained outgoing IAB CEO Alice Manners. “When the IAB first started recording online ad expenditure in 2003 it was at $1.3bn and today we have broken the $6bn barrier.”
In this rapidly shifting environment, media owners and brands need a new crossplatform approach to advertising.
Millward Brown advises clients on advertising effectiveness and has carried out research on cross-platform advertising. Mark Henning, head of media and digital in the AMAP region, said although TV is still the dominant screen for video an increasing amount of fragmentation across mobile, tablet and PCs is occurring.
“We’re also finding that in the digital space, one of the big advantages is the ability to target, whether it be demographically or behavioural information or a range of different things,” he revealed.
“Targeting by relevant content and being a relevant brand to the consumer is what gets received well, but there is a bit of a ‘watch out’ in terms of content that is a little bit too targeted and can sometimes be seen as a bit ‘stalky’.”
Association for Data-driven Marketing and Advertising (ADMA) CEO Jodie Sangster told AdNews that of all the ways advertisers can approach digital, video provides the most compelling way to grab eyeballs and drive engagement.
“Everybody is saying video is the way forward, so the challenge for every marketer is how do I make my video stand out? How do I make my video the one consumers stop on and not be lost on myriad videos out there?” Sangster said.
“There’s a realisation that you can’t just have the same content across all channels. There are some channels where you are going to dwell more and others where you are going to get the message across very differently. Each channel needs a different strategy. Are brands doing that yet? Not quite. And part of the reason is that it takes time and resources to be able to deliver on that.”
Getting the cross-platform mix right is challenging and requires a nuanced approach that plays to the strength of each channel.
Consumer reactions to advertising differ greatly between traditional media, such as TV, and personal devices like mobile phones.
TV advertising has been nurtured and adapted over many years so there is a greater acceptance of advertising on the big screen in longer formats Smaller devices, such as smartphones and tablets, are still a relatively recent technology and considered more personal.
“People are much more likely to consume advertising on these devices if they have some level of control. So if I am able to skip over the ads or choose not to play them, that type of ad is better received than if I’m forced to sit through it or it automatically plays on my phone,” Henning said.
It’s a point backed up in research conducted by Exponential. The digital advertising technology company compared viewer reactions to standard pre-roll and banner ads with more interactive ads that allowed user engagement.
“Firstly we found that the experience of interactive ads is a lot more comfortable for the user,” Greer explained.
“It moves from being an interruptive, potentially annoying experience to something that is more comfortable because they get to choose what they look at, for how long, and it replicates the online experience.”
The other benefit is that it paints a more positive image of the brand, improving ad recall, understanding of the message, brand favourability and likelihood to purchase.
Henning said that it’s important for ads on mobiles and tablets to have humour, relevance and interest, while Sangster pointed out that
TV advertising is about selling a product, and on smaller personal devices it is more about engaging content.
“Grabbing attention earlier is really important in the digital space,” Henning said. “In TV you can build the story and let the ad wash over you because it is a different viewing environment.”
In a mobile ad, for example, you have a matter of seconds to make an impact or viewers in a user-controlled environment will skip it.
A good example, Henning pointed out, is a 15-second pre-roll as part of IGA’s ‘Price Match Promise’ campaign.
In this spot, Aussie actor and AdNews Agency of the Year Awards presenter Shane Jacobsen immediately grabs your attention by shouting, “hey, hey, hey”. He then adds, “IGA now has a something, skip the big supermarkets.”
As the transition to a cross-platform approach continues to build steam, there’s little doubt that video content “will be a key pillar on where marketing and advertising is going”, Sangster said.
The challenge for marketers, she added, will be ensuring they’re not placing video content for content’s sake and are delivering on ROI.
It’s a matter of not getting caught up in the clutter and remembering, as Greer puts it, “that content is king, distribution is queen, but the people rule.”
Ratings measurement for dummies
This year, new catch-up ratings have been introduced to the mix to try and quantify the amount of time viewers watch catch-up TV compared to linear.
Traditionally, ratings agencies OzTAM and Regional TAM have used viewing information collected from 3500 homes across Australian capital cities and 1413 subscription TVs to work out the average and peak TV audiences of programs.
This year, Video Player Measurement (VPM) reports have been introduced that note the amount of time viewers spend on catch-up TV. This is then worked out by calculating the total minutes watched and dividing it by the length of a program.
At the launch OzTAM specified that combining the traditional TV ratings with the new online device measurement does not reflect an accurate picture because the methodolologies are different, however, the measurement body changed its stance in less than a week as the TV networks were seemingly doing it anyway.
The VPM reports measure all minutes via participating broadcasters’ video players, providing a more complete picture and look at live and time-shifted up to 28 days.
The next evolution is to introduce demographic data into VPM reports to help them better connect with linear ratings reports.
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