As viewers switch to the web and mobile for their TV fix, advertisers are shifting their budgets accordingly. With video ads offering increasingly targeted and personalised campaigns are we seeing the disappearance of scheduled TV viewing? Kai Henniges, CEO of Viewster, a leading video on demand service, looking at changing TV habits and what they mean for advertisers.
One of the biggest talking points at the Consumer Electronics Show this year was the continued evolution and increasing relevance of on-demand video. For advertisers, TV has been the “go-to” media for the last 30 years so it is no mean feat to change this tried and tested approach. However, with the online channel now beginning to offer the same level of audience engagement as linear TV, and public awareness and usage rising, everyone from broadcasters to advertisers needs to pay attention and start adapting their business models accordingly.
In today’s media savvy age, the proliferation of mobile and tablet devices makes the opportunities for on-demand content greater than ever and it is imperative that companies respond to an increasingly educated and empowered consumer. In the UK, a report by TV Licensing found that use of smartphones to watch films and TV shows has rocketed by 64 per cent in the last five years, with use of tablet PCs also growing by 45 per cent.
This shift is already having an impact on advertisers who are finding it difficult to reach some audiences through TV advertising. Instead they are choosing to invest a larger proportion of their advertising budgets in online video campaigns. Some 23 per cent of top brands have invested in an online video advertising campaign to date, according to a recent study by Kantar Media, and we expect many more to embrace it in the near future.
In the coming years, we expect to see TV advertising spend decline rapidly in mature markets as advertisers follow viewers online and discover the benefits that online video offers over less-sophisticated TV advertising campaigns. According to several studies, these online viewers are more engaged and have higher ad recall than those watching TV commercials. Additionally, online video advertising boasts more sophisticated targeting and tracking, and greater personalisation of advertising. Plus, online video ads give viewers the ability to click-through – something TV cannot compete with.
With marketing budgets in many countries still tight, brands are trying to reduce ad spend wastage. Greater targeting of users through online video advertising means advertisers can achieve better returns by only advertising to the audiences that they want. This in turn eradicates the irrelevant advertising that has frustrated viewers and advertisers in equal quantities – sparing viewers from ads that are of no interest and reducing wastage for advertisers.
This level of targeting simply isn’t possible through traditional TV ad campaigns, where targeting is typically by region or by the anticipated audience of each scheduled programme. What’s more, greater insight into viewers’ behaviours means that online video advertising can be much more personalised. For instance, if one viewer spends most of their time watching travel TV programmes, they might be more open to advertising from a holiday company. Similarly, a fan of horror movies is more likely to react positively to a trailer for a new horror film than someone who typically watches rom-coms. For film promoters in particular, this level of targeting clearly has a great deal to offer and with many brands now discovering the power of big data in marketing, even greater targeting and personalisation looks likely in the near future.
In the future, even more of the video content we consume will be on-demand whether that’s through a connected TV, on the web or on a mobile device. As viewers move online, so will the advertisers as they increasingly struggle to reach the audiences they want through TV advertising. At Viewster we saw an eightfold increase in the number of videos viewed globally in 2012, showing that the trend is quickly spreading worldwide. Based on the rapid consumer uptake of this medium, it’s clear that advertisers must embrace the new era of on-demand content to stay ahead of the game and ultimately maximise their revenue potential.
By Kai Henniges
CEO
Viewster
www.viewster.com
