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Ad Age TV AND TECHNOLOGY
1.
TV AND TECHNOLOGY How the
Shift to a Multiscreen Environment Is Creating More Opportunities for Advertisers
2.
TV AND TECHNOLOGY TV
AND TECHNOLOGY How the Shift to a Multiscreen Environment Is Creating More Opportunities for Advertisers 73.3% of marketing, agency and media execs say they are early adopters of technology © 2014 Crain Communications Inc. 2 n=105 respondents* Technology has dramatically altered the TV viewing habits of marketing and ad agency executives, who are often on the cutting edge of new media trends. With the proliferation of mobile devices—U.S. smartphone penetration will reach 80.0% this year and tablet penetration will reach 64.0%, ac- cording to eMarketer—viewers are now watching content on multiple devices at their own convenience How Industry Execs Use Technology Gone are the days when busy executives rushed home from work to watch their favorite programs at their scheduled airtimes. Now, with DVRs, TiVo, Hulu, on-demand cable TV, Netflix, YouTube and a host of other viewing options, marketing and advertising executives are watch- ing their favorite shows when and where they want, whether that’s at home on a big-screen TV from a menu of prerecorded shows or at the airport on an iPad using a streaming video service. The shift to an on-demand, multiscreen world might seem to indicate the demise of TV ad spending, but that’s not the case. Ad agency executives, media buyers and marketers are still bullish on TV as an ad medium, saying the increase in viewing opportunities across multiple devices and screens gives them more ways than ever to reach consumers and business customers with advertising messages. To find out about how changes in technology are affecting marketing and agency executives’ own viewing habits and what this means for the future of TV advertising, Advertising Age conducted a survey of 191 mar- keting and ad agency executives between Feb. 11 and 25. The following core insights emerged from the study: • The vast majority (91.4%) of executives say their TV viewing habits have shifted over the past two years. • About half (51.0%) of marketers and agency executives are optimistic about TV as an ad medium. • 63.0% of executives believe TV technology provides a better platform to reach targeted consumers than other technologies. • Almost half (46.0%) of advertisers plan to spend money on addressable TV. TV viewing habits have changed dramatically in the past two years Citing changes in technology that have given them more options, 91.4% of marketing and agency executives say their TV viewing habits have changed over the past two years. Linda Boff, executive director-global brand marketing at General ElectricCo.,saysabouthalfofhertotalTVtimeisnowspent“binge-view- ing” favorite shows, including HBO’s “Game of Thrones” and Netflix’s “House of Cards.” “Because of business hours, we do a lot of video-on-demand on cable,” Ms. Boff says, referring to her family’s viewing habits. While Ms. Boff usually watches her favorite shows on a TV screen, she often has a second screen—and sometimes a third—in play. For example, during the fourth-season opener of “Game of Thrones” in April, Ms. Boff watched the program on the big TV screen, kept track of the characters on her iPad and checked her Twitter feed on her smart- phone to see what people were chatting about. I tend to use new technologies somewhat before others do 55.2% I use new technologies at the same time other people do 17.1% I usually avoid using new technologies 1.0% I usually use new technologies before anyone else 18.1% I generally take a while to use new technologies 8.6%
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She’s not alone.
According to the Ad Age survey, while 58.1% of marketing and agency executives said they watch TV content on one screen, 28.6% reported simultaneous viewing, with more than one screen open at a time, and 13.3% reported sequential viewing, watching a program first on one screen, then on another. Marketers and agency executives are optimistic about the future of TV as an ad medium Despite the shift to multiple devices, television still holds currency as a viable ad platform. About half (51.0%) of marketers and ad agency executives said they are optimistic about the future of TV as an ad medium, according to the study. Forty-four percent were flat while only 6.0% said they believe TV as an ad medium will become obsolete. “I’m optimistic,” says Kevin Arsham, strategic media specialist at media agency Assembly, New York. “The variety of channels and the variety of content means more opportunities for advertisers.” Mr. Arsham has handled television and video ad buys for clients such as Dell Inc., Lockheed Martin Corp., Shell Oil Co. and Mentholatum Co.’s OXY skincare. Kathy Button Bell, CMO at engineering company Emerson Electric Co., says the company—which has business units such as climate control and network power—is using traditional TV and expanding it into online ads. Its ongoing TV campaign, “Consider It Solved,” created by DDB Chicago, shows how Emerson is helping companies such as LUKOIL Group, a Russian oil and gas company, and NBN Co, an Australian telecommunications company, operate in remote regions. In addition to the TV spots, Emerson features clips from the TV campaign in banner ads. Users can click through to see longer versions of the spot, as well as video interviews with Emerson executives and other case study information. “We do a ton of video on social networks such as YouTube and also on sites such as Forbes and Atlantic Monthly,” Ms. Button Bell says. When it comes to ad spending plans, advertisers are using a variety of television and video platforms to reach their target audiences—and traditional TV remains the leader. According to the Ad Age survey, 79.0% of marketers and agencies plan to spend on cable TV this year, 71.0% on broadcast and 63.0% on online video, buying time on TV network inventory. As for other video opportunities, 58.0% plan to spend on online video from pure-play video players such as YouTube and Hulu, and 8.0% on other viewing platforms—social media ads, DirecTV/Dish, digital out-of-home retail networks, online digital and behaviorally targeted placement such as YuMe. “Our creative palate has changed dramatically,” Mr. Arsham says. “You can go in and shoot a 60-second commercial on video. The production costs are lower. You can have it broadcast at a faster pace and get it immediately in front of the viewer; and you can interrupt them before they get into the site’s content.” Lockheed Martin uses video advertising on sites such as CNN and Politico—usually in pre-roll video during news segments—to tell the story of its F-35 fighter jet and counter arguments against defense spending while targeting government and business leaders. TV technology provides a better platform to reach targeted consumers Another key finding from the survey is that 63.0% of executives agreed that TV advertising technology provides a better platform to reach tar- geted consumers. “We buy very specific programs—mostly on cable financial news shows or very targeted sports, such as golf channels during the n=105 respondents* TV AND TECHNOLOGY Methods Used to Access TV Content © 2014 Crain Communications Inc. 3 98.1% 76.2% 67.6% 67.6% 63.8% 49.5% 47.6% 28.6% 22.9% 2.9% 4.8% TV iPad Mobile (e.g., iPhone, etc.) Desktop On-demand Streaming Media (Netflix, Hulu Plus) TV Apps (e.g., Showtime, HBO) Consoles (Xbox live, PlayStation 4, Wii) TV Players (Apple TV, Roku) ISP/CPS Applications (e.g., Comcast, FiOS, etc.) Others (Cable app on iPad, Chromecast, EZTV.it, Android-powered tablets, etc.) None of the above
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TV AND TECHNOLOGY ©
2014 Crain Communications Inc. 4 Masters,” Ms. Button Bell says. “Business executives and financial advisers keep the financial news on during the day, and they want it in real time.” Advertisers using broadcast and cable say live television is still the best buy, particularly for must-watch events. “We do a lot of live TV during sports and news—that is where the majority of our advertising is,” GE’s Ms. Boff says. For example, GE was a sponsor of the Sochi 2014 Winter Olympics and ran a TV spot showcasing GE’s businesses—from wind turbines to hospital equipment—as seen through the eyes of a little girl whose mom works at GE. GE also partnered with NBC this year to sponsor a branded content segment on “The Tonight Show Starring Jimmy Fallon” called “Fallonventions,” featuring wacky science projects created by kids. In another encouraging sign for the future of TV as an ad medium, 28.0% of marketers and agency executives said they plan to increase their upfront budgets this year, while only 19.0% said they would decrease upfront budgets. The remainder (53.0%) plan to keep upfront budgets flat, reflecting a firm commitment to TV, given 2013’s stronger year-over-year upfront spending. More advertisers plan to spend on addressable TV A promising area for television advertising is addressable TV, which gives advertisers the ability to target ads to specific households based on demographic and other data. As more cable operators and satellite providers implement addressable TV systems, advertisers will have a greater ability to laser-target ads to specific households that are equipped with the technology. According to the survey, 46.0% of marketers and agency executives plan to spend money this year on addressable TV. Of these, 17.0% plan to increase budgets for addressable TV ads, while 24.0% will keep their budgets flat. Another 5.0% will decrease budgets for addressable TV ads. The survey also found that 35.0% of advertisers currently do not use addressable TV but intend to start. The remaining 19% said they don’t plan to use it in the near future . Assembly’s Mr. Arsham says he currently does not use addressable TV for his clients, but he’ll be watching it to see how technology allows him to target users. “I may be interested in addressable, following other mediums, if I could [target] someone in a shopping center who went to a drugstore and was interested in a particular product,” he says. Some advertisers have already begun using addressable technology to reach viewers. In 2012, Allstate Corp. launched a campaign on DirecTV and Dish Network for its renters insurance that only targeted renters. The insurer used available consumer data from credit bureaus as well as subscriber information from the satellite companies to target ads to 15 million homes. Last year, Volkswagen worked with Experian to pinpoint households whose auto leases were set to expire within the next five months and launched an addressable campaign on DirecTV timed to coincide with its spring sales event. The future of TV and technology As newer technologies such as addressable TV and mobile become widespread, advertisers will have an even wider array of options to choose from when placing ad dollars. As these options grow, so will opportunities for TV companies looking to expand: 78.0% of advertisers and agency executives say integrated media offerings are essential for negotiations. Television as an ad medium is not going away. The ways in which users access TV content may change as technology advances, but the medium will remain attractive to advertisers that want to reach consumers with entertaining, informative and relevant content. About the Survey Advertising Age conducted this online research study in February 2014. The 191 respondents were made up of 44% agencies, 40% marketers and 16% media. Respondents held a variety of job titles, including 35% head of business/C-level, 22% VP level, 38% director/manager level and 5% others. The margin of error, based on 191 respondents, is calculated to be no greater than +/- 6.6 percentage points at the 95% confidence level. *Chart info based on respondents that are currently buying or selling TV media.
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