This blog is concerned with the arrival of a significant new form of VOD advertising – ‘platform’ VOD. This is the VOD advertising format that is slowly emerging on TV set top boxes in the UK and other TV markets.
In the UK ‘platform VOD advertising has been taking some time to get established. On Virgin set top boxes in the UK there have been experiments with VOD advertising going for a few years, but only with the recent upgrade of its systems is it properly taking off. On Sky+ boxes (where until recently, it was impossible to insert adverts into VOD programmes) we are promised a summer roll out of ad insertion. On the Youview based boxes and the other free-to-air platforms, platform VOD has been treated as an extension of ‘player’ VOD – formats delivered through a broadcaster app like ITV Player or 4OD. It has been bundled and sold within the broader VOD advertising deals, and has not been broken out for reporting or measurement purposes. The premise of this blog therefore is to make the following three points:
- The emergence of true ‘platform’ VOD is hugely significant for broadcasters and advertisers and is going to represent a huge jump in VOD advertising inventory
- That ‘platform’ VOD is significantly different to ‘player’ VOD and must be treated as a completely new advertising format and ecosystem
- It will most likely need its own measurement, pricing and sales strategy
It is important to be clear that when we flag up the implications of ‘platform VOD’ we are specifically talking about catch-up VOD. This is important for two reasons: it is still the dominant VOD type in terms of total viewing hours per week, and correspondingly it is the content type with the largest, most established advertising market.
The catch-up VOD advertising market has been dominated by broadcaster ‘players’ (or what agencies persist on calling ‘digital’) since 4OD launched in 2006. But this will change. We are already seeing a shift in VOD viewing from devices to set top boxes, with the launch of Sky’s TV VOD (without advertising). With the launch of new ad insertion on Sky and Virgin this year, the ad market is going to go through a similar shift.
But first, it is important to address the question of why ‘platform’ VOD and broadcaster ‘player’ VOD are fundamentally different. We believe there are seven reasons:
Different Devices – Firstly, let’s state the obvious – ‘platform’ VOD and ‘player’ VOD appear on different devices and are used in different places. ‘Platform’ VOD appears predominantly on the main TV screen in the main room of the house. ‘Player’ VOD appears on PCs, phones and tablets and is used around the house (but mainly outside the lounge) and outside the house.
Two areas that initially appears to break this rule – Smart TVs, and Youview boxes. Both use the broadcaster players to deliver VOD and advertising. However, in both cases the apps have been stripped of all functionality (log-in, interactivity, favourites, history etc) that appears on normal ‘smart’ devices so as to render them simple TV players. On TVs these apps behave like TV software, not Smart device software.
Different Viewers – The user/audience profile of player and platform VOD are fundamentally different. ‘Player’ VOD, on smart devices, is almost exclusively used by single ‘viewers’ on their personal device. Its what we call ‘one face, one screen’. This individual use is what has enabled broadcasters to drive log-in on these devices and build data propositions around their advertising.
However, research shows us that for ‘platform VOD’, played through a TV set top box, the dominant case is for an ‘audience’ not a ‘viewer’ – groups of people sitting around viewing together. This is the big structural difference between the TV and the web. The ‘platform’ VOD audience for any particular show closely resembles the broadcast audience for the same show as measured by BARB.
Different Ad Formats – Increasingly the ad formats used in ‘player’ VOD are exploiting the features and functions available on smart devices when a single user is engaged. These include cookies or, even better, log-in, interactive functions (eg the VPaid formats), links to advertiser content and a range of functionality that is appropriate when a single viewer is controlling the screen but which don’t work well in an audience setting when people don’t want others fiddling with the screen
TV set top boxes, don’t include any of the mechanisms or software to run this array of functionality. Advertising in TV VOD will just be the normal, broadcast standard ads played out in the same ad breaks as the broadcast shows. It is not even clear that broadcasters will be able to disable fast-forwarding of the ad breaks (at least on Sky).
Measurement – Measurement is contentious on all VOD platforms at the moment, with the device world consumed with fraud, and the TV world struggling to extend measurement concepts from broadcast into VOD. Whatever the outcome, device based ‘player’ VOD will continue to require viewer level measurement while TV VOD will require ‘audience’ or household level measurement. These two data sets are not the same.
Different Ad Tech – TV based VOD advertising has held out for a while from the predations of the automated systems or ‘programmatic’ ad-tech world. Now, the ad-tech is finally making inroads into broadcaster ‘player’ VOD as the pressure from big media agencies becomes increasingly hard for the broadcasters to resist.
The ‘programmatic’ companies would dearly love to plug their systems into the back of set top boxes, but it is unlikely that the platform companies will allow them or even need them. It is more likely that we are witnessing the emergence of a new class of ad-tech player – the ‘platform’ programmatic player. Companies like Sky and UPC will use data from their CRM systems to target advertising in any environment controlled by their set top box. Sky Adsmart is an early pre-cursor of this kind of proposition.
Tech Convergence Will Emphasise Difference – Catch-up TV has been evolving on TV platforms in recent years. When it first launched it was treated as just one part of the wider VOD category, and located in the VOD parts of the EPG. If you were watching broadcast and wanted to move to catch up, you had to exit the channel, go to the top of the menu, then work down into the VOD menus. The current generation of tech innovation around TV set top boxes is changing this.
Recent innovations such as the backwards EPG and jumps to VOD from within the linear channel meant that catch-up TV on set top boxes, is increasingly being integrated with the broadcast experience. Every new innovation we see arriving is continuing this trend. For instance start over (only on EE at the moment) allows you to jump to catch-up even if a programme is still broadcasting.
This integration is going to continue bringing broadcast and catch up together. But it is only happening for ‘platform’ VOD on set top boxes. On devices, there is an opposite direction of travel , with catch-up increasingly integrated with web functions like social media and short form.
Different Buyers – Finally it is likely that ‘platform’ VOD and ‘player’ VOD will continue to have different buyers. The media agency world, despite a decade of trying, is still reasonably un-reconstructed. They have an annoying tendency to split video between ‘TV’ and what they persist on calling ‘digital’ (the idea that ALL television is digital still appears lost on them). It is likely that the TV buyers will want to retain their claim on TV VOD as ‘its on a telly’ while ‘player’ VOD will remain with their ‘digital’ teams. As ‘platform’ VOD continues to merge with broadcast, this will increasingly make sense.
Because of this it is likely that ‘platform’ VOD and ‘player’ VOD will sit in different places within the agency deal structures that still govern how TV money is spent. It may be that ‘platform VOD’ is positioned as ‘in-deal’ and ‘player VOD’ stays out of deal. It may be that money spent on ‘platform VOD’ advertising is considered within the station-average-price calculation, while ‘player VOD’ money is not. All of this is up for negotiation.
We have tried to make the case here that ‘platform’ based catch-up VOD, and the related advertising formats, are a fundamentally different concept to the ‘player’ VOD we have been working with on PC, phones and tablets over the last few years. While they are both VOD, they differ in ad format, audience, measurement, ad-tech, and sales requirements. This will have big implications for the broadcasters, platforms, agencies and advertisers involved. It is likely that it will require different pricing, sales and measurement mechanisms and how TV VOD advertising is positioned in relation to broadcast advertising could be key. We will explore these themes in more details over the next few weeks.
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