"The End of the TV era is Near" an interview
Does rock-solid cord-cutting, so the users’ drifting away from TV and using VOD services on the Internet, is going to be the next big thing, the next mass phenomenon?
This is, without a doubt, a big challenge for the TV industry. With their success, SVOD platforms have already exposed a couple of the pre-exisisting myths. First of them is the realization that the (conventional) linear TV’s dominance will reign forever. The second one is the assumption that Polish people would not want to pay for the content online having a market filled with easily accessible content that is already free. The final myth is low public awareness: and the presupposition actually streaming pirate video content is not generally seen as an offence. As we can see: they are all wrong, and if the service has an interesting offer, good user-experience and you don’t put a crazy price tag on your product it is enough for the users and they do not want to break the law anymore. They choose SVOD.
How rapidly will the SVOD public grow?
There are two important factors that come into the equation, first: demography, so the slow decline of the older generation so attached to TV. Younger generations are not so reliant on it anymore. However, the most important factor is the offer. It is a simple truth that the more interesting the VOD services’ offer will be, the more people will use them and the changes will occur more quickly. But we cannot forget that TV will try to upgrade its offer as well to meet the viewer’s rising expectations: even this autumn some TV stations have noticed the change and we can see in their schedule TV series with similar vibe to those of Netflix. What’s more, we notice a fascinating phenomenon that people tend to mimic their TV-watching rituals and do the same while watching SVOD, i.e. they gather together on a Saturday evening to watch a live-show, they wait impatiently for the new season of “Stranger Things” to come out to see it on the exact hour it will be released. It is essential to notice that online services usually offer new and interesting content in the silly season.
Online SVOD platforms like Netflix are reluctant to share any details or statistics. What can we say about their success based on Gemius data?
First and foremost, we need to acknowledge that it is, indeed, a big success. After a year on the market, Netflix and Showmax (PL SVOD service) together managed to gain 3 million users; and this is data only for desktop computers and apps as we do not cover smartTVs in our study. What is interesting, more than half of Netflix and Showmax viewers’ are between 15-34 years old. The biggest group is aged between 25 – 34 years old, so people who are young enough to feel comfortable using technology on a daily basis, and simultaunesly old enough to be able to pay the monthly subscription fee. The second important observation is that co-consumptionof these services is at a very low level, most probably because of accumulated cost (cost issue). Both services are on a rise, and in our analyses we can also see a humble drop of popularity among the TV-based VOD services, which we can also associate with so-called “the Netflix effect”.
Will advertisers have a problem to reach the Netflix’ audience? Their business model does not support ads, we can also assume that Netflix viewers generally watch less of traditional TV.
This issue’s importance is only going to grow. People using SVOD services are used to consume whole seasons of a given TV series which definitely makes it harder for marketers to actually reach them. However, we need to remember that SVOD viewers still use other services and media out there, such as social apps, for instance, or radio. As a company, we are up for the challenge and we want to help our clients to reach their potential customers.
In our single source study we analyse the users who have not been reached by a given TV commercial. Right now, the panel comprises only 1000 people, however, we have already noticed a pattern: desktop computers’ users are the easiest target group to reach. Smartphones on the other hand, usually accompany their users’ while watching TV, so the more time the users’ spend on watching TV, the more they use YouTube’s and Facebook’s mobile apps. Naturally, we observe a rise of smartphone’s usage during TV commercial breaks. Netflix and Showmax or other SVOD platforms, not having any kind of ads (excluding autopromotional teasers), may not mimic same tendencies.
For some time now, Facebook is actively trying to broaden its video offer, for both: users and advertisers. Could it threaten the YouTube’s reign?
These are two completely different worlds, still. Facebook is, indeed, trying to attract with video, i.e with their in-stream ads, but user’s contact with ads on Facebook is still short, or even extremely short. On desktop it is about 5 seconds, and it goes as low as 3 – 4 seconds for mobile. What is more, Facebook encourages advertisers to create very short ads, lasting, sometimes even 2 seconds. It is most probably due to the fact that after the weighty speech of PandG’s chief brand officer, Marc Prittchard (delivered last year), the market demands more and more to pay only for fully-watched ads. And, even though Facebook may be the leader when it comes to the number of ad impressions, when we will take our newly developed quality equivalent GRP into account, it falls to 5. place, below both YouTube and the biggest TV channels’ VOD platforms. Our eQ GRP we calculate based on 30” (seconds) benchmark. However, we need to bear in mind that younger people consume media differently, more quickly and that it is harder to grab their attention effectively. The question whether we should still treat 30” ad as a benchmark is becoming more and more prominent.
YouTube is still a place where we search for longer videos; does it mean that the user’s contact with an ad is also longer?
The truth is that 30” ads perform best on the TV channels’ player or VOD platforms, where they cannot be skipped: the user has to watch them to get to the content he wants. On YouTube longer viewing times may appear in the TrueView model, but we need to remember that there are many very short creatives that the user will finish watching before the “skip” button appears. My favourite example is the ad of a Polish bank, MBank: “our loan giving rules are as simple as skipping this ad”. However, generally advertisers tend to think that reaching the right audience is more of a challenge for the publishers: Facebook and YouTube and they forget how much the quality of the sole message matters. Many advertisers still copy-paste the same materials for all publishers and digital media outlets out there, which, frankly, is a waste of time and money. We need to learn to create engaging creatives lasting 5 to 10 seconds, tops. When it comes to YouTube, you can also approach the topic a bit differently. There are many examples of ads lasting i.e 2 minutes, with the opening scene so moving, funny, touching etc. that you just don’t want to skip them. Many of them are seasonal campaigns, i.e John Lewis’ Christmas commercials, or Easter campaign of the German chain-store, Netto (#DerWahreOsterhase), or the series “What are you looking for?” by Allegro, a Polish online e-commerce platform. These creatives give a great chance to optimize media expenses, especially that most of them have the chance to be re-distributed by users themselves, and, as it is called: and “go viral”. This phenomenon is also one of the core reasons why media planning and creation should be much closer to each other, complement each other, and it does happen in some agencies that they go back together under one roof, and are seen together as complementary.
If the quality of ad contact is the best on VOD players of TV channels, despite the ever-present duopoly of Facebook and YouTube, does it mean that local publishers can also find their place in the ecosystem?
Yes, local publishers have their strong points, i.e like long viewability times, allowing advertisers to move there their creative strategy made for TV, including the already mentioned 30” spots. Many marketers feel safe with that as it jus works. On platforms with user-generated content brands invent all kind of challenges for their clients, but we need to remember that apart from the viewability time issue, there is also brand safety. In the last couple of months we have witnessed numerous scandals concerning brand safety, resulting in some advertisers temporarily leaving YouTube. Traditional publishers and TV stations do not have this problem, as they create the content, they naturally have much better control over it.
I have a question for you as a researcher. How to analyse this complicated world of TV, VOD and generally, the Internet? Does the Single Source study become a necessity in this reality?
We cannot analyse TV, VOD and the Internet separately anymore. The reasons for it are fairly clear. As I mentioned already today: there are people that are hard to reach with traditional TV advertising, and in 2018, we should be able to identify them and offer an alternative solution. Generally, as an industry we are facing an enormous challenge: we need to learn the behavioral patterns of the users leaving traditional TV, and this group is only going to grow overtime. There is also a somewhat new factor or trend, so to speak: in Poland, and generally worldwide, we see that marketers, and I mean strategy directors and officers (CMO) engage in research much more than ever before. For many years, reigned by TV, research used to be sort of given away by brands to media houses or media themselves, but now, in the digital era many marketers want to have a deciding voice when it comes to research. They want to have data they need, not, we need to say it loud and clear, the data the publishers need. It is visible in the results of the industry consultations organized by the Polish IAA branch (International Advertising Association). Asked in the IAA questionnaire, marketers responded they need and anticipate a single source study and one common measure, one GRP. We are really happy that our single source study answers that need.
On what level of development is the Gemius single source study now?
Today, our single source panel comprises about 800 panelists, and it is a representative sample for the adult population of the Internet users in Poland. Simultaneously, we develop this project in Germany and Turkey. As of now, we investigate their ad contact on TV, radio and across digital media, on both desktop and mobile (in-app and in-browser). Our panel is built on devices with special monitoring software we distribute to the panelists. This kind of methodology, passive research with the use of personal meters offers completely new possibilities in terms of research. We will be able to answer the question how many people use the Facebook app during commercial break on TV, and on which ad exactly; or which media outlets are actually used by the users who watch TV only occasionally, i.e a couple of minutes per month. It will also allow us to measure the TV ad contact out of the house, on-the-go.
As of now, are there any interesting results from the Single Source study that maybe surprised you or may surprise marketers or publishers?
It is interesting that in the case of campaigns strategically based on mobile (we measure Facebook and YouTube apps), digital does not really add reach to the TV audience, even though the potential is definitely there. It may stem from the fact that mobile is connected with TV. The less time we spend watching TV, the less time we have for social media apps. In case of desktop, the situation is different, we consume the content with our hands on the keyboard, there is no place for a smartphone there. It gives a lot better opportunity of upbuilding reach.
There are also cases we documented that actually confirm what we already know intuitively, i.e watching TV out-of-home. We can see a rather big group of occasional TV viewers (once a week or less) and also big jumps of TV audience during big sports events that are usually watched outside the home, i.e FIFA World Cup in Russia, earlier this year.
Interesting is also the fact that during commercial breaks we do not only look at social media apps, far from it. We play games, make calls and even shop online. This give yet another opportunity to better optimize the omnichannel communication.
