It’s a dull, dreary Wednesday evening in the middle of winter. You have no real plans, no films or shows you want to stream, so you switch on the TV and hope for the best. As luck would have it, one of your favourite films has just started, so you settle in with nice warm drink and get comfortable.
Twenty minutes later, right before your favourite moment, the film cuts to an advert break. You wait through five minutes of the same ads you’ve seen a hundred times already before you can get back to the movie...for another twenty minutes. Then the same happens again, and you remember why you pay for Netflix, HBO, Amazon Prime, and all the other ad free streaming services.
This ever more popular scene is bad news for traditional advertising, and it would seem that brands are beginning to recognise this. More marketers are now shifting their budgets from traditional methods to digital. In 2016, spend on digital advertising actually surpassed TV ad spend, which is incredible given how relatively new digital advertising is.
There’s a growing consensus that TV advertising just isn’t as effective as it once was, with the CEO of Disney, Bob Iger, saying “In general, there is probably too much commercial interruption in television.” There are also discussions ongoing to revise and reformat the way Super Bowl adverts are shown, according to CBS and and its chairman, Les Moonves.
What happens next?
Some networks are already beginning to address the issue, and moving their advertising models more towards a digital approach. Back in 2015, Fox bought and ad tech company called TrueX for $200m. The idea behind TrueX was a new way to advertise, which let viewers choose to interact with an ad in exchange for seeing fewer, or even no ads, after that.
How something like that would work with a standard TV set up remains to be seen, as there would no doubt be issues with scheduling. After all, if someone chooses to interact with an ad, and then see no more for the next hour, they will effectively be ‘ahead’ of those who choose the traditional way. So with the time freed up by lack of advertising, what do the networks show? It’s a tough one.
The exciting part is that it’s actually being explored, and it’s likely that viewers will have more choice in how they engage ads in the future.
The fact is, people are watching more and more TV in digital forms. Whether that’s through subscription based models, on-demand shows, or on catch-up through DVR players, watching TV as shows are broadcast is becoming less and less common.
This means advertisers will have to become more flexible and innovative, and it’s clear that a lot of the big players are already thinking about this.
If more networks start to look at a value exchange for the viewer, it could completely revolutionise the traditional ad industry. The viewer gets a more uninterrupted experience. The network can charge more for the ad slots. The advertiser knows the engagement and ROI will be increased over the traditional, more passive ads, as the user will actively choose a certain experience and take part in it.
What’s the impact on digital advertising?
The world of digital advertising never stays still for long, and leads the charge in innovative ways to advertise. They also seem to be recognising the fact that longer video ads may not be an effective way to captivate an audience.
YouTube recently announced that they will no longer be showing the unskippable 30 second pre-roll ads. This is great news for the users, as they won’t have to sit through 30 seconds of something that might not interest them, to access a video they wanted to see immediately. It also means that advertisers can now focus on making shorter, sharper, more engaging videos which fit better with the YouTube platform. The new video ads will run at a convenient 6 seconds.
This makes sense, as a vast majority of people weren’t actually viewing the ads anyway. So the advertising aren’t reaching their audience, and the audience is just suffering inconvenience. Everyone loses.
Now it seems that companies are focussing more on engagement and ROI, which is the way forward for the industry. Maybe the ad space costs more, but if the ROI is higher, and the audience is happier, then it’s clearly worth it.
However, Facebook seem to be going against the grain on this one. In a recent announcement, they announced that they will allow people to display ads during live stream videos.
This feels a little like a digital company moving more towards traditional advertising method, and it seems a little strange. As other websites, and even tv networks, look to move away from longer ads, Facebook are adding the facility to show a 20 second ad if the live-stream meets certain parameters (over 300 viewers being the main one). From there, they can display these ad breaks every few minutes.
Time will tell how successful these ads are, and 20 seconds is certainly more user friendly than a five minute ad break. It just seems odd that while TV looks to take inspiration from digital advertising and move towards higher engagement and relevance, Facebook looks to implement old fashioned ad breaks into its live streams.
What about display advertising?
Advertising is a fundamentally important part of content, both online and on TV. It generates the revenues which pays for the creation of the stuff we all enjoy. Of course, there are so many people that look to avoid ads where possible, as seen with the rise of ad-blockers and the usage of on-demand streaming services.
People are still interested in ads too, but they need to be relevant, engaging, and non-intrusive. If the user can continue with their experiences and consumption of content uninterrupted, but still see ads for products and services they’re almost guaranteed to be interested in, wouldn’t that be the ideal solution?
That’s where display advertising comes in, and that’s why it still works. Banner ads are more flexible than ever, with the move to HTML5 meaning that it’s easy to create interactive ads, or full video banners. In addition to this, with programmatic and microtargeting you can be more sure than ever that your ads will be shown to the right audience.
If you focus on this sort of advertising, the user is still getting an uninterrupted experience, and you’re still getting a great conversion rate and ROI (if you create an amazing ad, of course).
Traditional TV ads aren’t dead. Not yet anyway. However, they will change, along with our viewing habits. This will hopefully mean a shift in focus to ensure that the audience get a better, more tailored experience. Less ads, but of a much higher relevance and quality, looks like it will be the way forward. In addition to this, digital ad spend continues to rise at a faster rate than the traditional channels, which tells us that big changes are coming.