A Future for TV: The Publisher as Audience Architect

The Future for TV: The Publisher as Audience Architect

Agenda

• Introduction• Research report presentation – The Future of TV: The Publisher as

Audience Architect• Panel discussion• Audience Q & A• Close

A future for TV: The publisher as audience architectDaniel Knapp, Director, Advertising Research28 November 2013

IHS Electronics & Media

The value of IP-delivered video advertising for publishers


US-domestic and international markets are similar in size, but very different in business model composition

US ROW0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Consumer/Net Advertising Revenue by business model - 2012 ($m)*

Other ad funded contentBroadcast Purchase RentalSubscription

*includes TV and movies, and pay TV based platforms


IP-delivered video outperforms ad market growth

2010 2011 2012 2013 2014 2015 2016 20170%

10%

20%

30%

40%

50%

60%

70%

80%

76.0%

50.7%

45.6%

24.6%22.9%

18.3%15.8%

13.4%14.4%

8.4%6.1% 6.1%

10.0% 9.1%7.5% 8.0%

Year-on-year growth in WE advertising revenue (%)

Video Total media


IP-delivered video advertising more than doubles between 2012 and 2017

2010 2011 2012 2013 2014 2015 2016 20170

500

1,000

1,500

2,000

2,500

3,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

479

722

1,051

1,310

1,610

1,905

2,205

2,500

76.0%

50.7%

45.6%

24.6%22.9%

18.3%15.8%

13.4%

IP-delivered video advertising revenue and growth - Western Europe

Revenue Year-on-year growth


Video becomes an increasingly significant portion of display ad revenue

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170%

5%

10%

15%

20%

25%

30%

35%

2.0% 1.7%2.3% 2.8%

3.5%

4.9%

7.6%

10.7%

13.7%

17.8%

20.6%

23.0%

25.2%

26.9%

28.7%

IP-delivered video share of display - Western Europe


But proliferation of video differs among top markets

France Spain Italy UK US Germany0%

5%

10%

15%

20%

25%

30%

35%

40%

33.9%

31.6%

24.9%

21.0%

18.2%

14.3%

IP-delivered video share of display in 2013


Multi-screen video: the consumption/revenue divide


It is no surprise that the markets which have seen linear declines have high proportions of non-linear viewing

UK US France Spain Germany Italy0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

% of TV viewing which is non-linear (2012)


Screens continue to grow – not just at the high-end

Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-130%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

10.0 - 11.007.1 - 09.905.2 - 07.004.6 - 05.104.1 - 04.503.5 - 04.003.0 - 03.402.5 - 02.902.0 - 02.4

Source: IHS - from Mobile Technology Intelligence


Proliferation of video-capable devices makes monetising audiences difficult for publishers

2012 20170

200

400

600

800

1,000

1,200

Video-capable devices - Western Europe

Smartphones Tablets Game consoles PCs Smart TVs Other devices TV sets


So which devices are users currently relying on? PC still represents the most important platform for major commercial broadcasters

PC; 90%

Mobile/ tablet; 10%

RTL

PC; 45%

Mobile/ tablet; 12%

Connected TV; 0%

Pay TV; 43%

M6

PC, 46%

Mobile/ tablet; 15%

Connected TV; 2%

Pay TV; 37%

ITV


Lower ad-loads on non-PC devices are common feature of the market, as is disparity between players

DE DK FI FR NL NO SE TR UK0

2

4

6

8

10

12

Ad-load per stream (# adverts)

Web/PC Mobile Tablet


Audience-based buying and the rise of targeting


The US is two years ahead of Western Europe with 11.4% of video revenue already generated programmatically

2010 2011 2012 2013 2014 2015 2016 20170

500

1,000

1,500

2,000

2,500

3,000

3,500

IP-delivered video advertising revenue - US

Other video Programmatic video

€m


Programmatic video moves from marginal to mainstream

2010 2011 2012 2013 2014 2015 2016 20170

500

1,000

1,500

2,000

2,500

IP-delivered video advertising revenue - Western Europe

Other video Programmatic video

€m


Fixing it: Publishers as audience architects


Most publishers are still in nascent stages of developing a data strategy

80%

20%

Publishers in Europe in H1 2013*

No data strategy Data strategy

* source: IHS biannual publisher survey


Most publishers are still in nascent stages of developing a data strategy

80%

20%

Publishers in Europe in H1 2013*


* source: IHS biannual publisher survey

28%

72%

Publishers in the US 2013**


** source: IAB/Winterberry Group Whitepaper


Fragmentation & duplication characterise complex video advertising infrastructure

DSPs Ad Exchanges/SSPs

Ad networks Video PropertiesTrading desks

Data Vendors, Data Management Platforms, Measurement Analytics


In an increasingly cookie-less world, personally identifiable log-in data becomes crucial

Apple

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Mac

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base

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evice

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Chr

ome

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Googl

e+ a

ctive

use

rs o

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ers a

ctive

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+ str

eam

Win

dows 7

PCs

Mon

thly

activ

e us

ers (

MAUs)

Mob

ile M

AUs

Mob

ile-o

nly M

AUs0

200

400

600

800

1,000

1,200

1,400

Millions of users by service

m

ID driven by iPhone & iOS unit volumes


Why a data strategy?

Pressure from the demand-side

Competition from online giants

Adding transparency to existing data regime

Connecting audiences across screens

Adding diversity and context to over-standardised demand-side metrics


Data strategies: adoption varies among publishersOnline portals & print Broadcasters Video ad networks

Predisposition • Open to experimentation duet o either 1) understanding the experimental nature of online or 2) originating for a declining print business

• Advanced in their thinking about data strategy

• Reluctant to adopt new unproven techniques as they comes from a long-tested TV background

• Aware of the urgency to use data

• Accustomed to selling audiences

• Most advanced in understanding the value of data

Challenges • Combining 1st and 3rd party data effectively

• Leveraging data with context to enhance their offering

• Fear of alienating users by asking for registration data

• Connecting data available across devices

• Cannot offer premium context in the way the other two can

• Combining 1st and 3rd party data effectively

State of adoption of data strategy

Various states of adoption from early to advanced: tend to be more advanced than broadcasters

Early: the process of understanding their 1st party data

Advanced: already use 3rd party data extensively and working on integration of 1st party data


Data strategies: what are publishers currently doing?

Data is key to their long-term selling strategy

10% of ad revenues come from programmatic

Programmatic is part of their media planning strategy, but not creative

Own trading desk (Response+) to implement demand-side capabilities

1st party data is still underdeveloped

Display is traded programmatically, but not video

Cautious of middlemen

Work solely with 1st party data – 3rd party data is too expensive and “frankly not very good”

Direct sales remains the primary and preferred channel

Cooperate with other publishers in data strategy


Conclusion• Growing importance of data should coincide with change in

publisher self-perception as audience architect.

• At the core of audience architects: unlocking data, making it usable, enhancing it to segment and assemble audiences in new ways. Pairing advertiser need and specifics of unique editorial offering.

• No golden path to becoming audience architect, still in infancy. Emerging set of practices across Europe as compass.

• Putting data strategy at centre as a) defensive move b) driving innovation.

Architecting audiences means architecting the foundations for future revenue growth


Thank you

[email protected]

@_dknapp

mailto:[email protected]

Panelists

Eleni MarouliAdvertising Analyst

IHS

Stephen ByrneCommercial Director UK/NL

Videoplaza

Andrew MooreEuropean Managing Director

SpotXchange

Next steps

• All webinar participants will receive early and exclusive access to the full research report via email by Friday, ahead of launch

• A recording of the webinar will also be made available via the same email

Thank you

A Future for TV: The Publisher as Audience Architect

Technology

Transcript of A Future for TV: The Publisher as Audience Architect