I spent a very interesting few days in Chicago this week attending the Cable TV Show. Normally it would seem an odd fit for a digital person such as myself to attend a TV convention but more and more the worlds of digital and TV are converging and that was definitely evident at this years show. Cable providers were quick to point out that people still spend 33% of their waking hours watching cable. TV is not dead, in fact cable viewing time is up from last year. What is clearly changing is the expectation customers and advertisers have for cable providers. The constant evolution and high speed changes in the digital world are pushing TV to evolve their offering as well. Some drivers for these shifts are;
- People want content of their choice when they want it and where they want it.
- Advertisers want to measure everything they do and have access to rich data for quick optimization and ROI comparisons. We are used to getting this from digital and now expect all media across the three screens to deliver.
- Advertiser dollars with follow cable if the cable companies can prove the advertising drives someone to take an action; ie. search, video views, like
Technology was the darling of the show. TV partners are embracing the second screen concept. More than 50% of people now watch TV with some form of a second screen companion, whether a laptop, tablet or mobile phone. Networks and cable providers are building mobile extensions for consumer to enhance their viewing entertainment. We saw apps ranging from simple tablet apps where people can catch up on storylines with other viewers all the way to advanced ipad apps that turn the ipad into a TV remote. There are ipad companion apps that allow some cable subscribers to access linear TV on their ipad through the wifi connection in their house, in essence creating a mobile TV in your house. Mobile devices are now enhancing set top box capabilities to offer features the boxes alone don’t have the sophistication to provide.
It’s not hard to imagine a time soon when networks will value their shows not just on Nielsen numbers but also on the shows social currency. For example Fox’s The Family Guy has 33.5 million likes on Facebook. It reasonable to think if advertisers want to reach The Family Guy audience on TV they would also be interested in tapping into the social currency of Family Guy on Facebook and other digital extensions like YouTube. There could be a world where a TV program with lower Nielsen ratings is just as valuable or more valuable if that same program has amassed a lot of social currency. The challenge will be understanding what is the right currency to measure cross platform buys and how would that measurement convert to buying. Digital is sold in impressions, TV is sold by a Nielsen ratings system, mobile and social can be sold on Cost per Click or Cost per View.
The biggest takeaways for me this week are;
- Set top box technology is archaic. The set top boxes we all use today to receive cable have old hardware running old systems. It’s estimated it would cost cable providers $200 per customer to upgrade each box out there. Who pays for that expense? They aren’t going to pass that cost to the consumer and they certainly can’t absorb it themselves. This is a major gap to providing a better streamline cable viewing experience.
- Cable companies are in a race to see who can provide true Addressable TV first. The data sets are available but until now the technology hasn’t been able to support this (see note above). The second challenge beyond providing an Addressable product is scale. National advertisers like Microsoft need to be able to reach more than 50,000 households in a test market or even 3 million in a single metro area. These sample sizes are too small to show impact and have measureable results.
- TV advertisers need to move away from Nielsen ratings and demand a measurement system similar to what digital has today. This will make it much clearer to the TV advertiser what advertising is really working and what isn’t. Brands will require more from creative and media agencies and will look to optimize campaigns much quicker. Media companies will be pushed harder to deliver results that until now they haven’t had to because TV measurement tactics couldn’t hold them accountable.
- Providers are still building experiences in an app world. As long as apps are the distribution channels for these two screens program extensions there will be no way for programs to offer a richer consumer experience that gets more tailored and personalized as a consumer uses it. A second screen media extension should know other programs and movies I like to watch and get smarter about who I am the more I use it. The only way this can happen is if the program is build in the cloud and not on a hard drive app experience.
- Organization and management of peoples media library will get better. We saw one company that has developed something called Cloud TV. Its a cloud based solution that allows a consumer to not guess which media option is best but rather to compare real time between providers offerings. If I want to rent a movie should I go to VOD through my cable provider, Amazon, Zune marketplace or Netflix. If the show I want to watch is on Hulu Plus for free because I already subscribe I don’t want to pay Amazon 0.99 to watch it. Today’s experience of shopping around for media is siloes and challenging at best. I imagine more companies will become media aggregators of content as the choices continue to expand.
All and all some very cool stuff. This digital marketer is intrigued by where TV will go in the next 12-24 months. It’s still the most consumed media out there and it’s exciting to see advertisers pushing media providers to get better, smarter, faster. Just one more thing we can all thank the digital revolution for.