TV in 2011: What will it look like?
Media agency executives Sylvia Criger of MediaCom and Lynda Cooke and Helena Shelton of PHD share their predictions for the evolution of TV media buying and planning this year.
The mediaverse is ripe with talk of TV this week as the hottest new doodads are unveiled at the Consumer Electronics Show in Las Vegas. But who better to know what the world of TV will really look like this year than the media executives who live and breathe it every day? MiC rounds up agency broadcast execs Sylvia Criger, chief investment officer, MediaCom and PHD’s Lynda Cooke, managing director broadcast, and Helena Shelton, EVP, trading and accountability, to examine what TV will actually look like in 2011.
MiC: How do you see TV buying changing or evolving in the year ahead?
Helena Shelton & Lynda Cooke, PHD: ‘There will be more focus on measurement resulting in more accountable buys. It is always a hot topic and the TV world is changing so quickly that measurement needs to catch up. Combine multiple screens, time-shifting and the ability to skip ads with the subsequent audience fragmentation and it is clear that old methods of measurement and media buying will not suffice.
The division between specialty and convention continues to grow closer together. With the telecom companies now having a big stake in broadcast, we think more programming will be shared between the conventional and specialties. There is also talk about geo-targeting commercials. This may be down the road but we will see more of the cablecos using their resources to do more creative executions.
VOD will become a bigger topic as more people find it, the availability of programs increases and broadcasters figure out revenue and reporting models. There will be a further move towards reaching consumers of television where they are watching – TVs, computers, smartphones, iPads and so on – and budgets being split between traditional television, VOD and broadband. Agencies will need to figure out how to demonstrate leadership in allocating budgets accordingly.
The launch of Google TV and Apple TV open the door to the merger of TV and internet, however, we will not see much impact in 2011 as both platforms will still be in their infancy.
MiC: What are your thoughts on the inventory and ad opps available for the networks’ online TV programming? What would you change about it?
Sylvia Criger, MediaCom: Clients are keen on these ad opps but there isn’t enough inventory available as evidenced by the rates in market. We have a real concern over ‘package’ selling. In traditional TV, they sell audiences, while in the digital space, they are selling programs. Top shows are sold as exclusive packages and advertisers in this market simply don’t have the creative available to fill these programs. It’s resulting in creative saturation at light speed. By the end of a program, you could see the same spot three to six times. If you watch two episodes back-to-back, you could see 12 spots in less than two hours which has a negative consumer impact.
[As for change,] we’d change the costs…of course! They’re too high – CPMs are significantly out of line with TV. We’re told that engagement is much higher but we haven’t seen any tangible research that justifies the premiums being asked over TV CPMs. At this time, there’s no incentive to do this research given that inventory is limited and in sold-out positions. We feel this needs a major overhaul but I can’t see this changing soon – there’s no upside for them to rock the boat with research that probably wouldn’t support the premium costs being asked.
MiC: Do online streaming services (i.e. Netflix) and online network broadcasts represent a viable threat to cablecos?
Helena Shelton & Lynda Cooke, PHD: The answer, we believe, is not in the near term, but perhaps sooner than we think. Content developers wish to extract as much money as possible for their product. By virtue of sheer scale of distribution, broadcasters are able to pay exponentially more for fresh content, first-window broadcast rights and lock up online rights at the same time. This will not change anytime soon with any critical mass.
Online network broadcasts such as Hulu do not want to jeopardize this revenue, but are looking for new revenue streams by delivering content directly online to consumers. The relative-value tipping point is wholly dependent on the speed with which the consumer moves online to view content and the degree to which the broadcaster/content owner can develop innovative business models to extract greater revenues (or equal revenues at less cost) versus the current models.
Online streaming services such as Netflix, AppleTV and Google will further create pressure to split the broadcast and online rights as content owners seek to maximize revenue. With the rapid uptake of smartphone mobile devices, tablets and internet-enabled TV – all of which provide interactive as opposed to passive viewing experience – the collective online revenue opportunities are increasing exponentially for content owners (including much higher margin addressable ads). And one has to believe the likes of Apple and Google, with exceptionally deep pockets, will become developers of their own content, or acquire the content producers, to directly challenge the status quo.
MiC: What do you think of the opportunity ‘social TV’ or second-screen entertainment?
Sylvia Criger, MediaCom: The social aspect of TV isn’t new – when TV first arrived, watching it was very much a communal activity. Social TV, which is evolving rapidly, is driven by the rise of social networks and based on individual viewing on personal devices, geared primarily at real-time interactivity with peer groups – shared viewing and peer recommendations. We now have virtual communities who are defined by interactions, common interest or location.
This creates tremendous opportunities for clients through targeted ads. You can already see the differences between ads on TV versus online or video on demand. But not everyone in a social network has access to the exact same pool of content, for example, from a telco, cableco or satellite, etc., so there is considerable fragmentation. And without a common experience, the value of social TV is diminished.
There are some changes happening that might reduce fragmentation – for example, content providers distributing content across multiple providers and platforms, including their own online sites. Or crossing platforms and delivering content to more personal devices like PCs, cellphones, PDAs and TV, seamlessly. We believe this area will continue to evolve rapidly with more online video migrating to mobile platforms, new appliances delivering content and the blurring of boundaries between devices. This will create even more opportunities for our clients as consumer targeting is taken to a new level.
MiC: What concerns you in the world of TV for 2011? What excites you?
Helena Shelton & Lynda Cooke, PHD: What concerns us for TV in 2011 is our ability to deliver accurate measurements in all markets. It is unacceptable that in this day and age we still rely on diaries for half of our TV expenditures. What excites us is a stronger economy that will allow broadcasters here to produce more of their own content that will then allow our clients more product multiple platform integration. With the option of multiple screens, opportunities could be endless.
Sylvia Criger, MediaCom: Consolidation is a concern but also an opportunity for 2011. Consolidation makes it more challenging to negotiate and deliver cost efficiencies for our clients. But from an opportunity standpoint, we can develop closer relationships with those partners as their assets are deeper and this should prove to be beneficial for our clients.
We would like to see more investment in programming. Although TV audiences are high, consumers are moving to a greater level of choice than ever before. The landscape is more complex and in order to keep pace with how the TV/video consumer is wired and to protect our clients’ investments, we’ll need more complex buying and measurement tools.