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August 2019 - Advertising in an on-demand and digital world

An interview with Craig Buckland, Technical Director at BTS for Monetize Magazine.

According to a recent TiVo’s Video Trends Report, digital native AVOD (ad-based video on demand) has grown as TV sites decline. It found that the average participant made use of 7.2 services, compared to 6.3 in 2018. So, although TV is still the dominant force for screen advertising, the digital world is starting to make inroads.

That would suggest that there is an increasing battle for viewers when it comes to advertising outlets. But can the two co-exist in the long term?

“Absolutely, TV and online advertising should definitely complement each other,” states Craig Buckland, Technical Director of Broadcast Traffic Systems (BTS). “In fact, so much so that broadcasters are in a unique position to enable that cohesive approach. Also, the way in which video is distributed is changing. TV is no longer just about linear channels, there has been a steady rise in over-the-top (OTT) services which is leading to both new challenges and opportunities when it comes to advertising. The best advertising strategies are the ones which cross both platforms.”

BTS was established in 2000, and supplies traffic solutions to the broadcast industry across six continents. The company’s objective is to offer scalable, cost-efficient solutions suitable for single and multi-channel broadcasters. It provides a complete system from long term planning and advertising sales through to integration with transmission playout systems.

Buckland continues, “Advertisers are increasingly expecting platforms to work side-by-side and are looking to launch campaigns across the board. Ad campaigns that mix both digital and TV will likely have the most impact, because they will get in front of more people, and because consumers will see them on different platforms. It works best when it is an integrated campaign, with the ads making most of the potential of each platform.” He says that the main advantage of digital advertising is the opportunity to personalise the messages being served. “There has been a lot of research that shows that personalised ads improve engagement quite substantially. For example, Sky released stats last year that showed targeted ads boost engagement by more than a third and cut channel switching by almost a half.”

As well as the personalisation impact, digital is also much more trackable. Marketing teams are constantly under pressure to prove the value of activities. Digital advertising allows them to provide much more insight into engagement with commercials, but also, even more importantly, how many people clicked through and made a purchase as a result of the ad. “That benefit is simply not possible in the same way with TV advertising. However, TV advertising does definitely have a place for increasing brand awareness.” Buckland continues, “Broadcasters are in a unique position to be the central point to manage both linear and digital advertising. Over recent years, broadcasters have had to adapt fast to keep pace with changing consumption preferences. This challenge from digital is the latest hurdle for them to negotiate.”

In Buckland’s view, broadcasters need to adapt. “The multiplatform world opens up a wealth of opportunity for broadcasters to deliver their content to consumers in different ways while increasing engagement and improving satisfaction. OTT services lend themselves to that targeted approach, so broadcasters need to maximise that opportunity. They also need to adopt an aggregator approach to advertising. By managing ad placement across broadcast and digital channels they can become the go-to for all of those campaigns, wherever the commercials will appear.”

Of course, in any situation budgets are a majority consideration, so does business size affect the decision about where to advertise?

“It certainly does in terms of budgets,” says Buckland. “A smaller business is going to go for the most cost-efficient approach, giving them the maximum exposure for the minimum investment. A digital campaign which allows them to target a very specific demographic may prove more cost efficient, but equally a local TV campaign may be more beneficial.”

With that in mind, is there an optimum company profile for digital on the one hand, and for TV on the other?

According to Buckland, it depends on region and how crowded the landscape is for traditional broadcasters. “In MENA, for example, even the larger broadcasters are only just starting to look at digital campaigns to complement their linear ones. In Europe, which is considerably more crowded with linear broadcasters, many more broadcasters have 360-degree campaigns covering multiple delivery options.”

So, how will online advertising progress over the next 5 to 10 years?

Buckland believes online advertising will continue to progress and take a significant chunk of ad revenue. “I do believe TV advertising will still have a place, but the percentage is likely to shift quite significantly in favour of digital advertising spend. According to one survey, 66.8% of US media ad budgets will be digital by 2023. The report also states that in Asia Pacific, as much of 76% of all ad spend will be digital.”

He concludes, “Advertisers are increasingly looking to book an integrated ad campaign covering all media types. This represents a great opportunity for broadcasters to maximise monetisation options, however the very complex nature of digital campaigns, coupled with the lack of integration to existing workflows, is causing them a challenge. This will be an important hurdle to overcome in order to fully maximise the potential of ads.”