TV's emerging single market has 'unlimited' upside for smaller agencies, advertisers and media
"Compared to the invention of the iPhone, Love Island seems a shabby example of seismic change. The key is how Nine averaged 538,000 viewers across 30 episodes, when their traditional on-air ratings were reported as lower than the ABCs Bananas in Pyjamas."
At first glance you may not see the relationship between 2003’s Iraq War and 2019’s coming season of Love Island. In fact they are very closely related in a way that is turning TV buying and Australia’s media industry on its head.
The Iraq War, and the USA led 'Shock and Awe' attack was a watershed moment in shaping digital media consumption. For the first time audiences around the world, including Australians, had a thirst for knowledge faster than the traditional news cycle could deliver. Australia’s largest news site at the time, the Sydney Morning Herald, added 20 new servers over 48 hours to cope with the increased load from audiences eager to watch events unfold.
This single event kicked off the start of a more sustainable, audience-led internet boom than the Tech Boom of the late 90s and marked the real start of advertising migration to digital media in Australia.
In 2007, UK dad Howard Davies-Carr posted a video of his kids called “Charlie bit my finger!”. The video has been viewed almost a billion times and made enough YouTube advertising royalties for the family to buy a new home in less than 6 months. Two little boys launched the future of influencer marketing worldwide as web users realised that our thoughts and actions have value to people we have never met.
These examples show how the growth of digital media has been an almost haphazard series of leaps, as opposed to a relentless climb. Audiences have spent the last 20 years reacting to quantum leaps in technology and greater access to the web. Think the iPhone and Google’s IPO in 2004. Australians have reacted more quickly than most.
Compared to the invention of the iPhone, Love Island seems a shabby example of seismic change. The key is how Channel 9 averaged 538,000 viewers across 30 episodes, when its traditional on-air ratings were reported as lower than the ABC's Bananas in Pyjamas. The change is not being driven via traditional TV. It is through the enormous increase in the size of audiences viewing long form commercial TV content via an internet signal. It is about how, when and on what device viewers expect to be able access all TV content, not just Netflix.
There is an enormous silver lining for the TV networks. Advertising delivered via the internet is driving a resurgence in TV’s share of media and creating a single digital and TV advertising market. Global delivery platform, The Trade Desk, has reported a 300 per cent year-on-year increase in the number of Connected TV advertisements delivered over the first quarter of this year. Australia’s Connected TV penetration is on the verge of exceeding the all-important 50 per cent tipping point.
For the local media industry, Love Island represents the watershed moment as Australia’s estimated $3.7bn TV advertising market and digital media’s $9.4bn share merge to form a combined media market exceeding $13bn. 2019 marks the beginning of a re-alignment of Australia’s media industry as most media starts completing the transition to digital delivery and/or viewership.
For media agencies the implications are enormous. Traditional barriers to entry that favour large media groups are rapidly eroding as programmatic TV buying is within reach of smaller agencies and clients alike. This emerging single market will deliver unlimited opportunities for agencies and media groups that believe TV and digital viewers are a single, captive and motivated audience.