Opinion

Next-Gen Digital, TV 2.0 and an industry identity crisis

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The line between Digital and TV is increasingly blurred says Liam Brennan, Global Director of Innovation, so what does that mean for advertisers?

TVs are increasingly ‘smart’. They are connected to the same internet pipes as our laptops, smartphones, and game consoles, and as a result evolving the advertising opportunity around this tried and tested media channel.

Leading digital platforms are increasingly looking to TV as a distribution channel to both improve their content reach and view time. TV is set to become the primary viewing device for YouTube in H1 2021, and next-gen video platform TikTok has launched a version of their app for both Samsung and Android-powered Smart TVs.

The TV experience is changing, and arguably for the better. And although not all ‘digital marketers’ will agree, TV is the ideal medium for advertising; sight, sound, scale, screen size and signalling. TV advertising grabs and holds viewer attention, which is shown to drive up both brand and sales metrics, and it typically does so at a much cheaper comparative cost than most digital media channels.

Research agency and founding member the Attention Council, Lumen, recently verified this. They also tracked several large digital media platforms for comparison and found that some (but not all) showed promise as competition when it came to cost-efficient attention. By calculating time spent viewing, ad format and length, and adjusting for buying rate (CPM - cost per thousand).

CPM shifts

Lumen found that 30s TV spots were a very reasonable £1.05 CPM, but digital video formats such as non-skippable YouTube were a slightly cheaper £1 CPM. Indeed, newer formats such as Instagram Stories were not far off - £1.92 CPM, downgraded due to creative length and a preference for image-based content over video.

When removing their ‘social network’ or ‘messaging’ labels, many newer digital platforms, particularly those designed for mobile, such as TikTok, Snapchat, Instagram and YouTube have a much greater resemblance to TV than digital advertising platforms of the past. The viewer is focused on full-screen audio-visual content and advertising (also audio-visual) is interruptive, linear, and not in conflict with content – just like TV.

These digital platforms are also reaching audiences that TV struggles to. For example, TikTok has a little over 17m regular users in the UK, with 40% of those in the 18-24 year-old bracket, who are at best light TV viewers. They also spend over an hour a day on the app, similar to the average time an adult watches ad-free subscription TV services like Netflix, Amazon Prime Video and Disney Plus.

For the younger generation, these digital video platforms are TV 2.0. This is not just a conversation about audience reach, but also additional features TV lacks which beneficial to the advertiser. Targeting capabilities, real time feedback on content, audience, and ad performance, and increasingly how content connects with commerce – a more tangible way to both drive to and measure outcomes.

Instagram, Snapchat and TikTok have all seen dramatic improvements in their seamless commerce capabilities, whether than be buying within the platform, or reducing friction when buying externally. All have integrations with Shopify, allowing businesses to not just create a seamless commerce experience, but also to track from impression to click to sale and adjust their own media plans within Shopify itself to drive the best business outcomes for the one in four online purchases that originate from a social platform.

This year there is much excitement around Social and Entertainment Commerce, a practice perfected in China by Alibaba and PinDuoDuo, which evolves the TV home shopping channel for the digital generation. In December, TikTok partnered with retailer Walmart to host the first US live shopping experience, with influencers creating content and live streams where viewers could buy showcased items seamlessly within the platform. Amazon (Twitch) and Google (YouTube) are rumoured to launching similar offerings this year.

TV 1.0?

But if these new digital platforms are TV 2.0, does that mean ‘TV’ remains 1.0? Of course not. With smart connections comes actionable data and addressability. Tracking and reporting of TV reach and performance is catching up to ‘digital’ media, and the connected TV marketplace is simplifying, Magnite’s recent acquisition of SpotX being a good example of this.

These directional shifts though have huge impact to brands and agencies. TV and OTT are still booked on a reserve basis, but as they shift to biddable (like ‘digital’) there is less of a need for upfronts, and a more fluid approach to budget setting is needed, buying audiences rather than spots. It creates a more open playing field for brands that don’t have the entry budget for TV, and it may also mean platforms look beyond paid advertising for revenue. For example, Douyin, TikTok’s original Chinese version, has taken a much more diversified approach to monetization.

So if TV is digitising, and the new digital platforms are digitalised versions of TV….then what is ‘Digital’?

This piece was originally published in New Digital Age.

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