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Market Voice 28 Sep 2020 - 3 min read

Converged TV: Move faster, more flexibly across screens – or fall further behind your audience

By Stephanie Famolaro, Senior Director, Business Development ANZ - The Trade Desk
The Trade Desk

TV viewing habits are shifting faster than ever. Post-Covid, research suggests people are cutting the cord four times faster, creating further audience fragmentation. Advertisers recognise they must sprint to catch up – and the media industry is scrambling to create the fluid, flexible trading frameworks urgently required to reach audiences across all forms of TV. Disney’s Laura Nelson, Dentsu Aegis Network’s Patrick Darcy, Nine’s Michael Stephenson and The Trade Desk’s Tim Sims unpack the future of TV, how to manage the transition from linear to digital, and how brands can better focus the firepower of their data.

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After all the calls for broadcasters to modernise audience trading, too many media buyers have been slow to engage with Nine’s Galaxy platform. It’s only running at half capacity, in terms of inventory traded programmatically, according to chief sales officer, Michael Stephenson.

He says media agencies must leave outdated approaches behind and catch up with consumption - which is shifting faster than ever, both in Australia and around the world.


Attitude adjuster

Post-Covid in the US, people are cutting the cord almost four times faster than pre-Covid, and the same is happening globally, according to Tim Sims, chief revenue officer at The Trade Desk.

“This year, about 11 per cent of people say they will cut the cord by the year end in the United States,” says Sims. “That’s building on top of about 45 million that have already cut it. So we’re seeing an acceleration, because normally that number is about three per cent.”

In the 18-24 demographic, almost one in five (18 per cent) says they say they will cut the cord within the next three months. Here in Australia, new research from The Trade Desk shows that 13 per cent of consumers intend to cancel, put on hold or let lapse their paid subscription streaming service as a result of Covid’s impact.

“Internationally, we're seeing a lot of the same thing,” says Sims. “That creates a really interesting opportunity for marketers.”


Fragmentation normalised

While audience fragmentation accelerates across media, Sims believes the convergence of linear and digital means there has never been a greater opportunity to apply data-driven buying to TV.

Programmatic approaches, he suggests, can help “normalise that fragmentation” while enabling brands “for the first time in history” to take all of the data capability they have amassed “and point it at TV” to manage messages, reach, frequency and ultimately, outcomes.

To reach that Nirvana, brands and buyers need to try and unify their approach, rather than treat digital and TV as separate entities, and bring data to bear across the piste.


Flexible demeanour

According to Laura Nelson, SVP, cross-portfolio solutions at Disney advertising sales, brands are increasingly demanding cross screen and cross channel trading approaches across broadcast, cable and digitally-delivered TV. Marketers, says Nelson, seek flexibility to buy audiences across media owner portfolios enlarged by recent M&A rounds.

“Covid is only making that need for flexibility even more important,” she adds, with brands and agencies keen to ensure they have flexible terms in place that enable “fluidity of inventory” to target audiences in different parts of the big TV networks as social norms are disrupted. For example, those that usually buy entertainment audiences on streaming services want to also flip to sport audiences on linear when required.



Flexibility is “critical”, agrees Patrick Darcy, chief data & technology officer at Dentsu Aegis Network (DAN).

But he admits that agencies have been slow to adapt to the changing ways people watch TV in all its forms. DAN, he says, now recognises that quality, long-form video content, “is all just TV”. As such, it is reorganising to “break down some of the silos to how we've done this before and allow investment to move a lot more fluidly across TV”.

While Laura Nelson says Disney’s direct business is growing as brands take digital buying in-house, Darcy warns that approach could undermine the desire to unify TV audiences as linear and digital converge.

Meanwhile, he thinks industry debate around TV bending to fit digital trading methods and metrics or vice versa may be misplaced.
“I don't even think that's the right question; consumption is changing so fast. Going into a new world, we should be thinking about what is the new way to do this stuff, not which bends to either direction.”

While admitting DAN has no “silver bullet” to solve that challenge, he says going into next year “we won't be doing anything the same as in years prior … because we have fallen behind the way people consume TV.”


Build bridges

Key to managing an orderly transition is “creating bridges between these two worlds, because we are going to have to live in both for the foreseeable future,” says The Trade Desk’s Tim Sims.

“As Patrick says, from a consumer perspective and a brand perspective, it’s all just TV.  So how we create those bridges is through things like consistent measurement and attribution and doing that cross screens and cross portfolios.”

The devil, as always, is in the detail, says Sims. “But it’s really just about bridging these two worlds, not separating them.”


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Tool up

Managing the transition is where Nine’s Michael Stephenson says agencies and the broader industry must now step up – and use the tools that are being put in front of them.

Stephenson says the launch of Virtual Australia (VOZ) in December will be a critical milestone.

“It allows you to plan and buy total television and measure the incremental reach that BVOD, or video on demand, adds to linear TV.  And it allows us to measure co-viewing through on demand platforms, which we haven't been able to do to this point,” says Stephenson.

While the media and TV industries are arguably moving faster than at any time in their shared history, “relative to the pace of change, it is actually quite slow,” he suggests.

“We need to move a lot quicker.”


The sell: Better buying data

While Covid has thrown up huge economic challenges, it has accelerated “big, tech-driven transformation projects from years out, to clients moving to execute within the next 3-6 months,” according to James Bayes, GM, The Trade Desk ANZ.

That may reduce the inertia frustrating some media owners.

Bayes says The Trade Desk’s partnership with Samba, inked in March, should help in pushing further toward a converged future.

“We are integrating Samba into our planning tools, which allows us to plan and activate more holistically across Linear TV and BVOD,” says Bayes.

“For the first time, marketers will be able to activate digital video campaigns based on historical linear TV data. That means they can downweight BVOD on households that have been over-exposed to their campaigns on linear, and upweight BVOD on under exposed linear households.”

In a landscape where RoI will be “in sharper focus than ever before,” says Bayes, “people are making smarter investment bets. Channels that are transparent, accountable and measureable are going to thrive.”

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