This blog is the second of two considering the impact of the arrival of dynamic VOD advertising on the Sky and Virgin set top boxes in the UK. The first blog here made the case that catch-up VOD on a set top box is fundamentally different to catch-up ‘player VOD’ on Smart devices and needs to be treated as a wholly new format. This second blog looks at the implications of that statement for advertising and offers a suggestion to make TV VOD ads work in the converged TV future that is now arriving.
“I recently sat on the sofas at iBurbia with the media team from a major FMCG advertiser. We were reviewing the new set top boxes and discussing TV advertising. On a YouView box, we watched as a live, commercial channel went to an ad-break. It turned out that my clients’ latest campaign was the first ad in the break. When the break finished we used the YouView backwards EPG to jump into the catch-up version of the same show from the day before. As with the live version, our clients’ ad was first in break in the catch up episode.
No-one in the group had moved between the two ad views and we were all still on the sofas in the same group. We hadn’t changed device or screen We had merely flicked our thumb a few times on a remote control and we had seen two versions of the same ad, in the same show. One of the group turned to me and said “So, the same physical context, same audience context, same media context. How come we pay £5 CPM for the first ad (broadcast) and £50 for the second (VOD)’ ”
The comment from the canny FMCG media buyer highlighted that a significant change is affecting the TV industry and that some of the commercial arrangements have not kept pace with the tech. When catch-up VOD advertising first came onto the market it was both different and separate from broadcast TV. It appeared on PCs and laptops only, and nowhere near live, linear TV channels. With the arrival of TV VOD on set top boxes this summer, this clear distinction has been removed. Linear channels and their catch up content are now presented alongside each other on the main TV set.
In our recent blog about TV VOD we made the further point that not only had recent tech innovations created this confusion, but new functionality continued to make it worse. The arrival of the backwards EPG (Youview, Tivo, Freetime) and more recently ‘start-over’ (on EE STBs for main channels, on Sky+ for movies and on iPlayer) means that catch-up is no longer behaving like normal VOD. It is becoming a functional extension of a linear broadcast channel. In fact on the new EE box, there are times when it is hard to say whether you are watching live, PVR’d content or catch up VOD. They all blur into one and pricing/selling the ads seperately is a nonsense.
To make matters worse, the technology being used to do this is very often our old friend the PVR. The new generation of boxes are increasingly using programmes stored on the hard-drive to create VOD outcomes. Whether it is the EE box using the memory to buffer live shows, or the Sky box using the memory to host VOD, the distinction between catch-up and PVR is blurring dramatically. We are moving rapidly to a world where the linear, paused, timeshifted and catch up content from the major channels blurs into single, flexible viewing offering on TV – the true definition of a 21st century broadcast channel.
As we hinted in our last blog, this has major ramifications for the nature of TV advertising. Most particularly, how the industry targets, sells, presents, monitors, measures and reports any TV advertising (on a main set) that is not on a live channel. Selling TV VOD in the same way (and at the same price) as Player VOD (on smart devices) is no longer tenable for the reasons our FMCG clients pointed out – it is more like broadcast advertising than VOD, or any other so called ‘digital’ advertising and increasingly, it will be hard to tell when you are watching one vs the other.
Because of this, Decipher would like to propose one further fundamental change for ‘platform based’ TV catch-up advertising.
We are proposing that the pricing, sales and reporting of TV catch-up (VOD) advertising on main TV sets, should be bundled together with broadcast TV not Player VOD – with the combined package considered simply as ‘television advertising’. Whether someone watches a show live, pauses it for a moment, records it or watches it via their set top box VOD within five days, should make no different to an advertiser (with a small number of very specific exceptions). It should all be treated as part of the same ‘television’ campaign. As long as the content and ad line-up a viewer sees across all these formats is exactly the same it should make no difference to measurement calculations.
To make this happen there are some changes that need to be agreed across the industry and implemented in a joint development by broadcasters and platforms together:
Firstly – the file format for catch-up TV VOD should be changed to exactly match the broadcast files – what the industry calls using an ‘as-run’ file in catch-up. Someone playing a TV catch up version of programme through a TV set top box within five days of broadcast, should be served a set of ads and breaks that match the broadcast ads. There are a very small number of exceptions and caveats required, but they can be dealt with by using AdSmart type capability to swap them out.
This need not create more work for the broadcasters. The simplest way to achieve this is to let the platforms record the broadcast edition on the PVR and present it back as VOD (this is what the new EE box is already doing with its ‘Replay’ service). This would dramatically reduce the amount of activity and cost borne by the broadcaster in creating platform VOD.
Secondly – after 5 days of being presented in this manner, a catch-up episode could then be stripped of its ads and the vacant inventory then used for dynamic ad insertion, along with the rest of the VOD inventory. (Note: this just applies to TV formats. We are proposing to leave catch-up on PCs and tablets untouched, to be used for the same purposes that it is now).
Thirdly, catch-up and PVR assets could increasingly be presented together in the new rich-media EPGs on set top boxes. For a commercial channel like ITV, it should be easy to jump between recorded and on-demand catch up in any platform menu system.
Fourth – reducing fast forwarding in set top boxes. The more we associate PVR content with catch-up the more likely we can implement a further necessary step – making ad-breaks in PVRs not fast forward-able while the episode sits in the 5 day window. As with catch-up, when a PVR recorded show has been on the hard-drive for longer than 5 days, its inventory would be stripped and made available for dynamic insertion.
But we must remember that the advertising revolution that his happening on set top boxes has two parts. Not only is dynamic ad insertion arriving on set top boxes in Sky and Virgin homes this Summer, but we are also seeing the ramping up of targeting of ads using platform consumer data. Our Fifth proposal is that targeting is also kept out of catch-up content during five day window. Once the five day window is up, and the broadcast ads removed to allow dynamic insertion, then targeting should also be brought to bear.
Finally – the need to measure and report this converged activity will naturally require better data to come to market very quickly. Currently, set top box data is patchy and slow to emerge from all the major platforms (except EE which publishes real-time data back into its own EPG). However, the core of the measurement requirements for this new form of TV VOD advertising could be met by BARB and its new Project Dovetail system. STB data, when it arrives in a more usable form could support and enhance this core measurement.
The difficult conclusion, when we look at the technology direction of travel, is that this solution is unavoidable in the medium term. Broadcast, PVR and catch-up content are continuing to merge and the commercial market needs to address the problem now, while it can do so without affecting an existing market. The only challenge is to get all the UK television platforms and broadcasters to work together to agree the standards necessary………oh.