By adaptive - April 27th, 2015

Eyeballs are on the move. With content consumption on mobile devices soaring, Ella Williamson investigates how the broadcasting industry is trying to keep pace with technological evolution.

As people consume content increasingly on the go, broadcasters these days have to monitor a variety of screens on different devices to keep eyeballs engaged and profits maximized.

Mobile internet usage is capturing an ever increasing portion of a consumer’s daily time online. A recent survey by GlobalWebIndexrevealed that the average internet user spends 1.85 hours online a day on their mobile devices, up from 1.24 hours in 2012.

For the 16-24 year old demographic this is even higher – about an hour per day more on average. With 80 percent of adults owning a smartphone and half of them equipped with a tablet, broadcasters are being forced to adopt an increasingly mobile first approach to content consumption.

Increased access to content that exists in more places has led to what Michael Goodman, director of digital media strategies at Strategy Analytics, refers to as the democratizationof video. “If you’re a broadcaster you need to be online because people are watching video online and if you’re not there they are just going to watch something else and you lose the opportunity to reach them, sell content to them and provide advertising to them,” Goodman tells Open Mobile.

Goodman adds that it’s important that broadcasters do not think linearly, “If broadcasters think that television is only a television set – then other devices are cannibalizing that. Yet if you think of the television set as only one channel to reach individuals, other devices then become multipliers”.

Providing content for mobile is creating new forms of revenue for broadcasters – be that an advertisement inserted into broadcasting content or a consumer spend business model such as rentals or subscription services like Netflix.

In Goodman’s opinion digital ad spend is not cannibalizing traditional ad spend, “Broadcasters are selling advertising time on the television and also selling advertising time delivered online. It’s just moving from distributional pocket over to the digital pocket. At the end of the day they are not losing any money”.

Even the BBC, funded in the UK by licence fee payers, has included advertising on the BBC website when viewed from outside of the UK. Carolyn Gibson, EVP international advertising sales at BBC, reveals that this is in order to “create revenues which can be used to develop better content and services for both UK and international users”.

2014 was a growth year for Sky and ITV in terms of mobile and advertising. The number of households registered for Sky Go, the firm’s mobile TV service, grew by 19 percent to 5.5 million and advertising revenue was up 7 percent to £472million.

Last year’s introduction of Sky AdSmart – tailored advertising campaigns according to a household’s profile and location – enabled Sky to work with a cross section of brands in 600 campaigns in just 6 months, spanning from small local businesses to global brands such as Audi, Dyson and Lego.

Adam Crozier, ITV Chief Executive announced favorable interim advertising results in June 2014, “Online, pay and interactive revenues continued to grow strongly, up 20 percent, as we further improved the quality and distribution of our content and the rapid growth in audiences’ appetite for video on demand (VOD) is in turn fueling demand from new and existing platforms for quality content both free and pay, and from advertisers for VOD inventory.”

Selecting an ad format is a challenge for broadcasters, according to Goodman: “A lot of the ad formats are going to be tied to the delivery mechanism and also to the device. The same ad that you are viewing on online video on a smartphone you probably will not be seeing on a tablet because of screen size. Supporting different ad formats on different platforms – this variable is the challenge at this point in time”.

He goes on to detail a US network’s experimentation with ad formats, “On Turner’s catch-up viewing in the first seven days they are carrying a full ad load of roughly 18 minutes of ads in an hour long program on the on demand viewing. After eight days it drops down to a much smaller ad load”. This is the exception not the rule, Goodman emphasizes, but from Turner’s perspective it allows them to maximise their revenue by carrying the heavy ad load initially and then over time decreasing it.

Programmatic buying and selling is developing rapidly, particularly in the US and Australia. Goodman declares programmatic to be “the future”. He is candid that programmatic in television is a very different animal to that of online, “Online it is all about algorithms that lead instantaneously to an automated negotiation for the lowest price point and then selling without any human intervention at all. In the television world we are going to see humans be much more involved in the process. We are going to see the use of private networks in order to help control who is buying because television is very concerned about what ads air and what is associated with their programming. They are concerned about their price points so they want to make sure that they maintain control over that”.

Tom Bowman, BBC Worldwide’s VP global strategy and sales operations, tells Open Mobile about programmatic’s growing influence on the BBC, “Programmatic is fast evolving technology with many real and potential benefits. It has helped us to provide solutions for both new and existing advertisers in the past year. Globally, adoption is varied but it is a growth area for us”.

YouTube and personal internet video channels should be seriously considered as competition for broadcasters in Goodman’s opinion, “If you are a traditional programmer, this is a concern. It’s capturing viewer’s eyeballs.”

So how do broadcasters ensure that all eyes are on their mobile offering? As Goodman succinctly puts it, “The same action that was required of a programmer 30 years ago: producing the type of content that somebody wants to watch”.

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