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Web Exclusive Column: TV Trends — Threats and Opportunities Abound

1 Jun, 2017 By: Peter Koeppel Response

Several recent reports highlight current evolving trends in television — as well as forecasts for the future — that identify both threats and opportunities for current advertisers who rely on this most mass of mass media to get their message across to the public.

For instance, a recent study from IAB — The Changing TV Experience: 2017 — has tracked the growth in streaming-enabled TVs and how audiences are using them. Such televisions are those that can access internet-based video content and they now reach the majority of U.S. online adults: 56 percent have access to them. That also represents growth of 56 percent since 2015 and, amid what many pundits have deemed a “Golden Age of Television,” owners are putting them to good use. The proof: nearly half (46 percent) of such TV owners are streaming content on a daily basis.

While many view these shifts in viewing habits as a potentially fatal threat to the historically interruptive TV advertising model, traditional real-time TV viewing still dominates. The evidence: 77 percent of pay-TV viewers report they participate in linear TV viewing on a daily basis. While this represents a 9-percent drop from 2015, the landscape for an interruptive TV advertising model remains robust.

However, streaming viewers report a higher level of engagement — something that should come as no surprise given it is akin to narrowcasting their preferences. For example, 81 percent of those watching traditional TV indicate they use a second device while watching, with smartphone users leading the way at 56 percent. Meanwhile the overall number of streaming viewers who watch with a second screen is just 72 percent, with roughly the same number using their cellphones. In other words, more of them are watching the screen in front of them versus the one in their hand. This idea of engagement was reinforced by some 42 percent of video streamers who agreed that they are less likely to go online with a second screen when they are streaming a video versus watching regular TV.

Amid these trends, there are encouraging signs for advertisers. As part of their higher degree of engagement while streaming shows, 34 percent of such viewers indicate that their second screen device activity is related primarily to TV content or commercials. This compares to 29 percent for regular TV, where the broadcaster sets the timetable.

Interestingly, half of streamers of digital video would prefer to watch ad-supported content rather than having to pay a premium for commercial-free content. Some 34 percent of this more highly engaged audience also report that the commercials they see while streaming content are “better” than what they see on regular TV, and 32 percent of that crowd indicate such commercials are more “memorable.”

This relevancy could be a function of better or more targeted advertising, or a halo effect of that higher degree of engagement — but, either way, it suggests advertisers need to play in both sandboxes. This idea is reinforced by the immediate cause and effect advertisers now see in terms of online activity in the real time wake of a TV ad run. Furthermore, the emergence of text as a response mechanism gives second-screen users an easy, one-step way to communicate with ads that intrigue them — and something a viewer can park and act upon later while the network returns to its regularly scheduled program.

As for news and sports, among the last bastions of live television that create a sense of urgency and need for real time tune-in, the threats posed by new habits and ways of assimilating information have further implications. The daily newspaper is as good as dead and nightly network news broadcasts — with no Walter Cronkite or Tom Brokaw in sight — aren’t far behind. Clearly, the advent of social media and push notifications as means of getting news immediately are undercutting the relevancy of both.

Despite the fascination with the circus surrounding the current presidential administration in Washington, cable news networks’ focus on relentless punditry — where hosts and guests outshout one another — is becoming wearying. Even stalwart sports programmer ESPN is facing ratings erosion as its over-reliance on endlessly redundant SportsCenter episodes — and the skyrocketing costs of broadcasting live sports — have led to bottom-line hemorrhaging that the network is scrambling to address. Given the quality of dramatic programming that comprises the aforementioned renaissance in TV content, eyeballs may very well turn away from collisions occurring on news sets and on the field of play.

Finally, artificial intelligence (AI) will change the way consumers navigate programming. Consumers who are willing to login to their profile — like they do on Netflix — will get individualized programming suggestions based upon viewing habits and preferences that are even customized by daypart.

Hulu has incorporated such technology and Comcast is working on an X1 set-top box that will deliver the same kind of experience. That may lead to less channel surfing, which, along with the shift to on-demand content, could threaten long-form advertising even further. This suggests that shorter-length advertisements will have a better shot at being discovered. As consumers change the way they change the channel, and what channels they are tuning in, it will be incumbent upon marketers to make equivalent changes themselves.

Peter Koeppel is founder and president of Koeppel Direct, a media firm focused on direct response television (DRTV), online, print, and radio media buying, marketing, and campaign management. He can be reached at (972) 732-6110, via email at [email protected], or on Twitter at @DRTVBUYER.

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