Digital Next conference: Technology a boon in digital ad marketplace

By AJ Tebbe on Mar 23 2015 at 7:45 AM
Digital Next conference: Technology a boon in digital ad marketplace

Technology won’t hurt broadcasters in the new digital ad marketplace, it will help.

The theme of the EGTA conference in Helsinki was: OTT, VoD and catch-up platforms will not kill the ad business because TV is the digital next big thing.

But a broader focus gleaned from a variety of keynotes and panels during the conference might be more about how technology isn’t going to hurt broadcasters, but help them reach a more targetable audience with ads that are meaningful to individual viewers.

Some believe that broadcasters are stuck in the middle as other digital video options increasingly appear in the market and lure viewers. From the three components in the value chain: content creation, delivery (broadcasting) and distribution, delivery is being perceived as the least valuable.

But traditional and online television consumption figures differ per country. In Sweden, for example, traditional TV is slowly declining; but, in Germany it is stable. As a consequence digital innovation goes faster in Sweden, where TV4 has an app on Apple TV, is organizing hackathons to tease out great new ideas, and parent company Bonnier is building a video ad network across all its online brands. The next step for them is leveraging available data sources for targeting purposes and thereafter programmatically trade ad inventory.

Broadcasters and pay-TV operators are using big data to get viewing insights, create better experiences or improve targeting. For example, MTG is trying to create a new “signed-in” eco-system for cross-promotional opportunities. They want to connect the people to the content they love and connect the advertiser to the right audience.

MTV Finland, not to be confused with Music Television, is trying to build a direct relationship with the viewer by offering OTT services with different linear, AVOD and SVOD packages. The soon to be announced Finnish legislation also will allow broadcasters to advertise on the STBs of operators, which opens up a new distribution channel to reach consumers with targeted advertising.

Another area where broadcasters are starting to invest in is YouTube or in broader perspective in multi-channel networks (MCN).  MTG is helping YouTubers to make money and their channel has grown from 9 million to 80 million views in two years. RTL Netherlands started its own MCN, soon followed SBS and Bluecircle, who partnered with MCNs like Divimove. The strategy of RTL NL is to convert loyal viewers into registered customers. RTL uses YouTube to find talent and audiences on Youtube. A second step is to further build those audiences via affiliates, like Vimeo, Facebook, Dailymotion and Vessel and its own platforms RTL XL and Videoland, where users turn into registered users.

RTL sees much potential in Facebook and Twitter, similar to YouTube. However, the lack of a partner model for monetizing those audiences is holding them back from investing too much in those social media.

In general, social media is widely being used for promotional and second screen purposes and seen as a powerful way to enhance the viewer experience or to increase reach with content going viral.

Content curation is becoming even more important, according to RTL. MCN revenues are still quite modest, but the outlook for 2018 is that the current percentage digital revenues will increase from 10% to 15%. ZDF sees opportunities in reaching more niche audiences, because online the viewer can connect to the content he likes and mass media rules do not apply i.e. on traditional TV, programmes need to reach a minimum audience to be acceptable.

Measuring the viewing behavior in detail is key to be successful, but currently ZDF are lacking good analytics. (The project with Nielsen is progressing slowly)

On the advertising side Freewheel had an interesting comparison between the U.S. and Europe. Dynamic ads in live streaming is pretty common in the U.S. and forms 23% of the total online video advertising pie. Short form content with ads is dominant (40%), followed by long form (29%). In Europe 68% is AVOD (long form) advertising. Surprisingly, European broadcasters serve more mid-rolls per hour (5.8 on average) than their U.S. colleagues (3.9).

And, programmatic trading is still quite modest among broadcasters, at least in the United States, according to FreeWheel (4.8%), but is growing fast. The biggest challenge is the ability to combine TV and online audience measurement.

As mentioned earlier, targeting is key to reach the right audiences and to justify higher CPMs. Media agency Dagmar confirmed that they are prepared to pay more if campaigns have a higher ROI.

In the panel discussion, David Mühle, Regional Director of Northern Europe for Videoplaza, an Ooyala company, was asked what the best strategy is for broadcasters with regard to programmatic trading. His answer: Keep doing what you are best in, promote your great programmes and the wonderful audiences it reaches.

AJ Tebbe is Sales Director for Northern Europe with contribution from David Mühle, Regional Director for Northern Europe.

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