Greg Jarvis, Executive Vice President and General Manager at Fincons US
The advent of the ATSC 3.0 standard in the US rings in a new era for broadcasters that are about to find they have a whole new array of tools to leverage to explore the potential of Hybrid TV and to help them become increasingly competitive in an ever more crowded market. Partnering traditional over-the-air broadcast with connected TV is taking the simple activity of watching television to new heights by introducing the choice and control that today’s viewers have become accustomed to. Experience in Europe, where HbbTV has been the standard for a decade now, provides plenty of interesting and successful examples of traditional broadcasters expanding their reach into digital via Hybrid TV.
Savvy broadcasters, cable networks and even content producers have much to gain; despite the range of platforms vying for their attention, from social media to games consoles, consumers still spend almost two hours a day watching TV1. Around 10% of the US population still consume television by flicking from channel to channel. This is why traditional TV remains a significant medium for advertising, regardless of competition from digital channels. Add to this that older viewers with greater spending power are more likely to watch broadcast television, and it is clear that a simple binary OTT vs traditional broadcast division simply does not reflect existing viewer demand.
To ensure lasting loyalty and interest from consumers (and therefore a greater share of ad spending), broadcasters must take advantage of the innovation that ATSC 3.0 unlocks. In this article, we shed light on the top trends shaping the future of US TV content delivery and their potential effect on stickiness and advertising potential.
1. Targeted content
Understanding viewer preferences and targeting will become increasingly important in the drive to minimise switching and improve channel stickiness. One valuable means of keeping viewers on the same channel is offering snippets of content specifically targeted to viewers’ tastes. This is a tool already in use by OTT providers but less so on traditional TV due to obvious technology limitations. Snipes that appear at the bottom of the screen during programming to provide additional information – such as the date the next episode will air – can now be upgraded and made far more powerful; with Next Gen TV broadcasters can insert pop out adverts that appear when one episode comes to an end promoting another episode, an after show or even a similar series selected automatically based on the viewer’s typical preferences.
2. Adressable Advertising
Hybrid TV also importantly unleashes the potential of truly targeted advertising. This type of advertising allows brands to deliver relevant content to individual households, and even to tailor advertising for different viewers within the same household, reducing wasted efforts on indifferent viewers. This is an under-used tool that could be reaching millions of spectators; of the 120 million TV homes in the U.S., more than 65 million have the technology to receive an addressable ad.2 Each resident of a household could be receiving adverts tailored to their age,
gender, location, interests and behaviour. In the UK, for example, where the HbbTV standard has been the norm for 10 years3, 80% of Channel 4’s total digital revenues come from the addressable ads it sells on its video-on-demand service called All 44.
Targeted and addressable advertising can also help to reduce costs as the audiences receiving the advert can be carefully selected on location too. One company that has taken advantage of this is the luxury car brand Maserati. As it is a niche product, traditional TV campaigns that hit a vast number of viewers are a huge waste of resources. An addressable advert, on the other hand, can be distributed solely in locations near dealerships, and to audiences that correspond to the brand’s target buyer. In 2018, Maserati launched its first national UK TV advertising campaign with the help of targeted TV technology and tracked visits to dealerships throughout the length of the campaign, enabling further data gathering and analysis.5
Location data can be also used to provide regional weather updates or local news in real time through pop outs between shows. This means viewers can access their favorite shows and useful, relevant information in one place, discouraging channel switching. Retaining viewers in this way helps to grasp a bigger share of advertisers’ budget, while also strengthening loyalty to the broadcaster.
4. Interactive Advertising
Traditional adverts rely on their capacity to stay in viewers’ minds rather than their ability to inspire immediate action. However, introducing additional content related to an advert allows viewers to access additional information straight away. The automotive sector provides yet another case in point by introducing the option to book a test drive for a car advertised on screen at the press of a button. There is boundless opportunity for advertisers to interact with consumers in this way and offer them increasingly pertinent information and offers.
5. Incentivised Advertising
Another means of interacting with viewers is that of offering incentives such as locked content or specific prizes. Rewarded video advertising is well suited to today’s multichannel environment. One example of incentivised advertising is to offer viewers a voucher code that can be redeemed on another device, such as a tablet computer or smartphone. Studies show that many of today’s consumers watch TV with another device in front of them; for instance, they may be browsing Twitter on their smartphone for live reactions to the programme they’re watching. This means they can instantly interact with adverts and cash in on rewards offered.
The rise of OTT has placed broadcasters on a back foot by increasing competition and revolutionising the way viewers expect to consume content, but if they are able to leverage the huge potential of Next Gen TV they will be well placed to fend off competition from OTT players as well as other broadcast companies. Not only will they be able to improve stickiness by targeting viewers in a multichannel and targeted way, but they will be enabling advertisers to tailor their ads to individual preferences and taste – thereby improving their potential to engage and encourage action. Broadcasters embracing the ATSC 3.0 revolution will find they have a new and ever evolving arsenal of tools to target viewers in more effective and personalised ways, ultimately ensuring advertising revenues and their long-term survival.
1 The State of Broadcast TV in 2019, Global Web Index, February 13, 2019
2 Don’t Believe Everything You’ve Heard About Addressable TV Advertising, Ad Age, October 24, 2018
3 DTG approves UK HbbTV spec, Broadband TV News, 30 September 2011
4 Thanks to addressable TV, budgets are starting to move away from Facebook, Digiday, January 24, 2019
5 Maserati looks to targeted TV ads to find rich car buyers, Digiday, May 22, 2018
About Greg Jarvis
Greg leads international IT services firm Fincons’ US business. Over the past 18 years he has launched multiple OTT and TV delivery products and services. He currently leads the efforts to design and deploy Next Gen User Experiences and recently released the TV interface best practices design and accompanying book.