It was announced last week that the BBC and ITV are collaborating on a paid for streaming service (SVOD), to be called BritBox. This is obviously in response to the growing behavioural shifts in regard to how TV is consumed and the growing expectation for programmes on demand.
There has been much debate online about how this change in consumption habits will affect advertising. Some experts such as Gary Vaynerchuk (Gary Vee) are essentially claiming this is only the beginning and that live TV and ad breaks will eventually fade away, with advertisers forced to find other mediums. Others such as Marketing Week columnist, Mark Ritson, claim that this consumption via VOD and SVOD is actually additional, and live TV is still very much the driving force in video/televisual advertising. Others argue, that whilst there is content that can only be truly enjoyed live, such as big sporting events, or a talent show final, there will be a place for TV advertising.
Whatever the case, we ourselves, have started to wonder how these changes will affect the way promotions are advertised. Typically, a ‘promotional tag’ is included at the end of a conventional brand TV advertisement to raise awareness of the promotion. This influences participation rates, as consumers are made aware and are driven to purchase and eventual entry in to the promotion, as a consequence.
When TV advertising is employed to support a promotion, we must factor an increase in to our Fixed-fee to take account of the additional awareness. This increase is based on data from hundreds of comparable Fixed-fee promotions, with and without TV advertising support, where the affect is clear. But our major concern at the moment is how, in the absence of data, we account for what appears an inevitable change of ad use.
Its far more finely targeted than conventional TV advertising, as it doesn’t just target by demographic but is far more personalised; drawing from other data such as; what you’ve viewed previously, what you’ve purchased, what your habits and interests are, etc. This will also undoubtably become more sophisticated as AI is more widely used.
We’ve had a similar issue with social media advertising and VOD advertising (AVOD) recently, each having differing effects on promotional participation in their own right. Currently we’re making allowances with the little data we have but it’s been a steep learning curve.
As this targeting becomes ever more intelligent though, will we require brands to share their metrics in order to accurately gauge the effects of this advertising on the predicted redemptions?
How too, will advertising change on SVOD services; will there be ever more product placement? Will this be a new advertising stream in its own right that promoters will need to declare to us?
Perhaps SVOD subscribers will be made to sit through compulsory adverts, like the AVOD model. How will any of this be used by promoters to raise awareness of a promotion and what will the increases in participation be? I suppose it greatly depends on the platform providers; if they are making sufficient revenues from subscribers, will they even need advertisers?!
Whichever side of the argument you come down on, in regards to how things are going to go, as in all things, change is inevitable, and I think it fair to say TV advertising is not exempt from this. It will be fascinating to see how this unfolds and what the shifts will mean for Fixed-fee promotions and the calculation thereof.