What Australia can learn from America's Connected TV ecosystem

Nev Hasan, Foxtel Media executive director agency sales
By Nev Hasan, Foxtel Media executive director agency sales | 8 September 2021
Nev Hasan

Australia’s Connected TV (CTV) penetration has seen outstanding growth over the past two years. Xandr research reveals that nearly half of Australians over 14 have viewed content on a TV, with 30% doing so daily. This viewing is across a range of platforms including BVOD, SVOD and AVOD (broadcast, subscription and advertising video-on-demand). Smart TVs are also the device of choice in Australian households, above mobiles, desktops and tablets.

To see where the sector is heading, it’s worthwhile taking a look at the US market which is a few steps ahead in maturity. Connected TV penetration rates in the US rose to an all-time high in 2021 with Strategy Analytics predicting that Smart TVs will be in 90% of North American homes by 2024.

There are several lessons that Australian platforms and operators can draw from the global growth of CTV:

You need a solid differentiator to stand out
CTV is an increasingly crowded space. There’s a plethora of platforms in the US - some familiar to Australians - such as Amazon Prime, Netflix, Disney+, HBO Max and Apple TV. Others may be less familiar, such as Hulu and Peacock Premium, or Pluto TV and Globoplay which cater to Latin American viewers.

Amid this competition, platforms need a really strong differentiator to stand out. This may be exceedingly popular content, exclusive language-specific content or value adds such as freebies for subscription rates.

Native advertising options are increasing
Foxtel Media recently teamed up with LG Ads for a CTV partnership that provides Australian brands with a powerful avenue by which to reach viewers on LG Smart television sets. Our partnership delivers interactive, native display advertising assets across LG Smart TVs. Native advertising has been shown to be less disruptive to the viewer experience, and the options provided through LG Ads work to enhance that experience.

New platforms mean new audiences
Foxtel has just over 4 million subscribers, with Kayo, BINGE and Foxtel Now streaming services boasting a combined 2.1 million subscribers. This is proof that audiences are still very hungry for quality content and the services that provide it.

At the same time, other platforms are helping to build different audiences. Three fourths of Australian consumers are willing to see ads in exchange for free streaming content. Foxtel Media’s AVOD’s offering, Tubi, takes full advantage of this and allows viewers access to a vast content library that continues to grow every day. In July 2021, Tubi viewers consumed an average of 78 minutes, with up to 80% viewing content via CTV. Brands such as Audi, NAB, Spotify and Nestle continue to engage with Tubi to reach a wide and varied audience base.

Advertising must make sense contextually
CTV advertising is a massively powerful tool for marketers in the US, with 49% of advertisers increasing their CTV spend in 2021, a figure which is set to double by 2025. Correspondingly, there was a 14% drop in linear tv advertising.

As more people watch more content across more platforms, the focus needs to shift from advertising tolerance to engagement and effectiveness. Rather than simply tolerating the content (advertising or otherwise), audiences should engage and enjoy it.

This means having advertising that is seamlessly integrated and aligned with content that makes sense contextually.

Innovation in advertising
CTV is a great way to embrace innovation in advertising and give viewers something extra, such as by positioning branded content alongside shows on a home screen, and providing interactivity via QR codes.

Last sports season, McDonald's and Toyota used QR codes during live cricket streaming to enrich viewers’ experience through competitions and cash giveaways. The QR codes amassed over 190,000 scans across five matches. It also made sense in the environment because it embraced the concept of using another device while watching a game. An eye-tracking study by Facebook in the US found that 94% of people kept a smartphone on hand while watching TV.

Contextually, the VB Hard Earned Hub that ran earlier this year was also very successful. NRL viewers could predict which player would win the "Hard Earned Player of the Round" award, receive exclusive content, win weekly cash prizes and enter to win the "Ultimate Grand Final Experience". The goal - which was achieved - was to turn advertising into entertainment. VB crafted their entire campaign around the concept of the NRL game and even capitalised on fan enthusiasm by trying to predict who would win.

Intelligent creative
For marketers, it is worth noting that CTV is one potential click away from a sales conversion. Not all smart TVs have this capability at the moment, but that is certainly the future that we are rapidly heading towards. Eventually we’ll live in a world where we can click into a movie trailer and purchase tickets at our local cinema with a few punches of our remotes.

With this future in mind, there cannot be enough said for a strong creative campaign. Strong creative works harder for brands when it comes to highly engaged audiences Combining this with the invaluable data that brands can utilise via targeting and personalisation can make for an exceedingly powerful message on the expansive ad network that Foxtel Media offers.

We focus on working closely with clients and agencies to ensure that their messages are precisely tailored and our targeting is exact so that all elements come together for our unbeatable offering.

Our CTV offering is TV, but on steroids and we have a plethora of CTV advertising options available to match. Individually each platform is strong, but collectively our intelligent network is unbeatable. It’s an exciting time for the market with big opportunities ahead.

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