Monday, 12 January 2009

Television: The last ten feet

I had a look back at some 'what media will look like in 2010' predictions that I wrote about 2 years ago (before I started publishing them for posterity....) to see how I was looking. Obviously the less said about my mobile industry predictions the better (I didn't see the iPhone coming, therefore I'm wrong. To be fair the same thing happened to Nokia, Sony Ericsson and Palm, so I'm in good company)

The TV views struck a few chords though, as there are a couple of wild guesses that 2009 is already starting to make reality.

By 2010 there will be no such thing as TV as a media channel
Ouch! Not something borne out by viewing figures or advertising. What I mean though is that there will be no difference between the various different screens that we have in the home. The PC screen will become outdated as we are able to stream TV directly from the internet..... yes, I know we can do that at the moment, but the spate of internet-ready TVs announced last week at CES shows that the hardware manufacturers know this is an idea whose time has come. This will allow us to cross the 'last ten feet' between the computer and the TV screen. Interestingly they all seem to be doing deals with content owners to create bespoke IPTV set-ups rather than just sticking WiFi in. So packages of Netflix, Boxee, Hulu, YouTube etc will be pre-installed, but in some cases there won't be general browsing. To do this you need to connect a computer to the back of your TV. Which for most people means either knowing how to install cards, fighting with Windows, dealing with hardware incompatability, or buying expensive Apple gear. And have big fat computers lying around in your lounge

Fortunately for those of us who can't afford Apple systems to audio-visual up our homes, it looks like Windows 7 might solve many of these problems by Not Being Shit, which is a radical departure from much of Microsoft's recent work. This will give us the possibility to simply connect the computer to the back of the TV and browse/listen/watch away. And the computer in the lounge is far less of a problem now that manufacturers are listening to what we want and making them smaller.

To be honest, I expect to see something from Apple this year that means this will soon all seem as outdated as cd shops. Don't know whether it will be Snow Leopard, a new generation of Apple TV, or iTunes as a PVR rather than a store, but this is a category so ripe for innovation that Jobs and co must be about to shake it hard.

So basically we will not talk about TV any more, because where the TV used to be will also be the internet - probably called video (?). And because TV will also be on the smaller screens in our pockets that used to be called mobile phones. I'd expect that using a much more integrated and intelligent version of the technology powering Slingbox, which beams AV content from your TV or computer to whatever device you want to view it on, that the TV and the mobile will be talking to each other. So for instance if I had been watching a football match at home but have to go out before the end, I should then be able to pick it up where I left it when I get on the train.

And what does this mean for advertising?
The current system of TV advertising is starting to buckle under the strain of increased DVR ownership. I have written in the past about why I don't think that we really understand viewing of TV ads in DVR owning households, but there is real potential in some of these technological developments to dramatically improve the role and impact of what used to be called TV advertising.

Personalised ads
The developments being made by Virgin and Sky appear to be based on behavioural targeting as well as demographic information (the danger with demographic targeting that isn't based on a BARB-style panel is that it confuses family members who are all viewers of the same screen). While not a perfect system, as the classic Tivo targeting dilemma My Tivo Thinks I'm Gay shows (link to the article text rather than the original WSJ piece, as get this, the WSJ is still subscription only. On the internet!), this is still an improvement on current TV targeting.

From a media planning perspective, there are times when I want to broadcast 30" in the old-school style. However, there are also many times when I'd prefer to have the option of showing 120" of great content to people who I know are interested in it (ideally I would know this because they had told me - by saying 'I really like the stuff this brand makes, please show me more of it as it is often better than the programmes' rather than 'I don't not allow you to not use my personal data for marketing purposes (tick here if you disagree)'. In almost all cases I'd rather invest in ads that are going to appeal a lot to fewer people than not appeal to the large number they are seen by (see Digital Mindchange for a more detailed analysis of the trade off between scale and involvement). Untargeted advertising leads to boring ads, which contributes to boring brands. As we are able to filter out more and more ads, there is no need to watch boring advertising. Personal targeting will allow more good advertising to get on air, as we all have different views of what constitutes 'good'. Adding geo-demographic data to behavioural would start to build a more rounded picture of individuals, so merging the three systems together would give us something significantly more accurate than we currently have, and should allow more enjoyable advertising to be created.
(see here for more on my thoughts on what might happen to advertising in future: it is a long post, but points 30-32 are the relevant bit)

The role of the broadcasters is an interesting one in this debate. Virgin already have a lot of personal data as they know what on-demand programming has been watched by their households. As there is no reason why you wouldn't have their superfast internet access as well as their TV services, you would expect they would have rather a lot of IP data too. While Sky have been slow off the mark with advanced internet access (as their infrastructure is so satellite-based), I have a sneaky suspicision that they know more about us than they are letting on. That phone socket that runs out of the back of the Sky+ box is apparently to update the EPG. Because this can't be done over the satellite dish which is busy streaming HDTV? Sounds unlikely. In fact, when I unplugged the phoneline the EPG was just fine. In fact, it has been working just fine for a month without it! It is used to buy movies etc, but there seems to be a lot of data coming OUT of the Sky+ even when you aren't buying movies. The media planner in me hopes that this is marketable data, while the normal person in me thinks it is a bit suspicious.....

And where does that leave the terrestrial players? Let's leave Kangaroo to one side, as nearly a year after launch it still shows no signs of being out of court any time soon, and in any case is likely to have been eaten or beaten by the UK launch of Hulu when it finally does. What is interesting is that this shows that they are all able to play nice together when it suits them to do so. As ITV, C4 and Five (not too mention the commercial juggernaut that is the modern day BBC) are all missing the viewing data that Sky, Virgin and BT all have, can we expect to see them pooling data when they launch? As revenue will come from audience numbers and these are different to actual viewing habit data, maybe the answer will come with a swift reform of BARB that shares viewing data across all (ex-) terrestrial channels.

For more on this, check out Simon Kendrick from ITV's more objective take on the subject

Media Trading
The real value to broadcasters and content owners here is twofold. Firstly, if all devices are synchronised and personlised then they should be able to serve totally personalised advertising to individuals across multiple platforms: so once I have seen a set number of ads for a new product (and I mean 'seen' not 'been exposed to'. There is a fundamental difference that we don't seem to get in the UK in the way that they do in the US) then a money-off ad will be served to me the next time I'm near a suitable shop (or SMS-ed if I subscribe to a service like Blyk, or as an audio ad if I'm listening to Spotify, etc). The main point being that it doesn't matter what 'media channel' it is being served through, as everything is transmitted in the same way, and appears on either a large screen or a small one.

So far that isn't a particularly radical idea as it is only taking what ad servers do now and synchronising it across multiple screens. Where I believe media owners have a chance of making their scale relevant in the future is by assigning value to individuals. Selling large numbers of eyeballs belongs in the last century, but the thoughts behind those eyeballs are worth plenty.

WTF is he on about?

Well let's take the concept of a personal CPM, as proposed by Marian Selzman at JWT (and as I can't find a link to it, here's one from Charlene Li that refers to it). This assigns different value to individuals based on their influence across networks: how many contacts and how much online authority they have. It will no doubt be the ad model for Facebook Connect and Google Friend Connect. But there are only certain categories like music and technology where this is really relevant to advertisers, and the really authoritative individuals would likely know about things that interest them before an ad agency even has a brief. However, say a broadcaster could use behavioural targeting to work out what I am likely to be buying soon, and can then sell the potential of my attention to the highest bidder. If I was starting to research buying a new car, then my price to auto brands will go through the roof. As I start comparing prices, I should only be seeing the latest discounts from all my local car dealers. They will be paying through the roof for these ads, and they will be worth every penny, as I will be interested in watching them and will imminently part with a large amount of money to the one with the best combination of product and price. However the ads for say a beer brand that I see in the same break will only cost a fraction of the price that the auto brands did. And rightly so, as my attention is worth so much less to them.

So I think there are enough ideas, launches and rumours coming out of CES to suggest that we will be crossing the last 10 feet in the next couple of years. We are clearly going to see the initial tests of personal targeting of 'TV' advertising, but I think that it will be very hard in future to see the difference between TV and online ads. This raises the threat for the current big players of the arrival of some much bigger ones. Those that innovate now stand a chance of maintaining a distribution and ad sales platform in the face of direct competition from Google, Apple and Microsoft, while those that don't will just be content manufacturers.


Simon Kendrick said...

Great post. I agree with pretty much all of what you're saying, though I have a couple of comments:

1) 2010?! Talk about sticking your neck out!

2) - The authority thing has always troubled me, as it is hard to gain context e.g. I wouldn't trust a racing tip from Scoble nor Stephen Hawking's favourite estate agent. And then there is the gaming...

3) - I can't remember where I was reading it, but an interesting point about innovations was that those that require you to change your behaviour are much harder to realise and have to clearly communicate the upside. The world is becoming more social but how many people will opt-in to behavioural targeting through return path data or social profiles? Some people like to sit down in the front of the sofa, turn their brain off and watch the same programmes (and ads) as everyone else

Some great food for thought in here, and will be v keen to revisit this in 2 years to see how things compare to current perceptions

Graeme Wood said...

Thanks Simon
2010 may be a bit of post-CES excitement, and I do have a tendency to front-weight predictions of change to make sure people think about how they might prepare in time ;-)

I tend to agree about social tv - while a nucleus of popular talkable shows will always be discussed amongst friends (Heroes, 24, etc) in real time, or amongst any interested parties in real time (CNN's use of Twitter), I don't think that social scheduling is ever going to be a mainstream replacement for linear scheduling. I agree that we are unlikely to opt-in to behavioural data en masse, but as TV advertising moves to a third-party adserved model this data will exist already. The role of social integration is likely to be use of Facebook Connect to share preferences and recommendations with friends.....Facebook is something that the mainstream is comfortable with, and the privacy issues with it seem to be going away. So the media/advertising industry will be able to buy and use all this data in targeting ads, but gleaned from Facebook/Google usage as much as tv viewing. The 'social integration' of TV will simply be what the viewing public gets back in return. It shows how far ahead of the game ITV were in buying Friends Reunited, and also how being ahead of the game isn't always the right thing to do!

Phoebe said...

Actually it seems that your prediction was not that far off. It does look like we're taking a full circle of sorts, with people's attention migrating from TV to PC, and now back to TV via internet. Like you, I see personalization as an important part of this trend, not only in ads but also in content recommendations, due to the (over)abundance of choice. This is our approach at Jinni.

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