Guest comment: How video on-demand will change advertising
- Added:
- Mar 16, 2009
How can advertisers make the most out of the growing popularity of video on-demand (VOD) services? Jamie Estrin, MD of The Web TV Enterprise , looks at the options.
Will all of our favourite TV shows become on-demand rather than available in scheduled time slots? Will the TV Guide become a listing of programmes available to us rather than in a time grid format? Personal Video Recorders (PVRs) like Sky+ are already dramatically changing the way we view our TV, but will we stop watching Soccer AM on Saturday mornings, Eastenders after dinner or Ant and Dec on Saturday evenings?
The way we consume television is most definitely changing but I don’t believe scheduled TV will simply disappear in the near future.
The Internet on the other hand is a very different animal. Firstly, you have to consider that its primary use is for getting information and entertainment on demand. This makes Video on-demand (VOD) an easy sell to Internet users, and partly explains the huge popularity of YouTube and why millions of people are now using the Internet to view short and long form video content.
To look at the effect VOD has on advertising, you need to go back to traditional TV. Systems have been developed over many years that enable advertisers to buy audiences on TV against viewing ratings, set up and run by an organisation called BARB. Now it’s hard to argue with a system that enabled the trading of over £3 billion in TV ad-spend last year. That is until VOD came along...
The BARB system is based on a panel that totals less than 0.1% of our population to determine viewing numbers delivered to the advertiser against their spend. Compare this to VOD where we have the ability to know exactly who is watching every piece of video content, at what time and on what device.
Then consider the impact of PVRs like Sky+ where consumers fast forward ad breaks, compared to the one to one engagement that VOD offers advertisers. The fact VOD can guarantee a target customer is engaging with an ad-spot prior to viewing a video clip they have selected is a pretty powerful proposition for any advertiser.
Now don’t get me wrong. We all love to sit back on our sofa with our feet up and watch telly. This is why TV still has a huge reach compared to viewing on the web, and cannot simply be ignored by major advertisers.
It is my belief that the web will lead the way in delivering effective advertising communication around VOD. We are already proving that when a ten second ad-spot is presented to an Internet user, where it is relevant to the content being viewed, the user will either engage with that advert or accept that it is of interest to them. We know this through the high interaction rates we are achieving from pre-roll campaigns and audience growth rates from our channel partners.
Consumers largely accept that free content needs to be funded by advertising, but VOD will change expectation levels from the viewer. The targeting capability that VOD offers will see consumers demand relevant advertising communication as part of their viewing experience.
The long term view on VOD has to take into account the younger generation who now consume the bulk of their audio and visual content through their mobile phones and the Internet. This generation is growing up without scheduled TV and within the next 20 years will account for a large percentage of the ‘Holy Grail’ 16-34 audience. This audience will not just expect to watch what they want and when they want, but they will also be savvy towards advertising messages they are being asked to engage with. This generation will demand interesting and engaging ads that are relevant to the content environment they are in. It will be part of their viewing experience and I believe will be paramount to the success of the content platforms they choose to engage with.
VOD is going to shake up the TV ad market, but will ultimately lead to a better viewing experience and a highly targeted, accountable medium for advertisers. The advanced targeting methods used around VOD on the web cannot be ignored by broadcasters or advertisers and will set the standards as VOD becomes more prevalent in our living rooms.
By Jamie Estrin
Managing Director
The Web TV Enterprise
