Barbarians at the gate? Be bold and fight back

Some broadcasters are anxious of the perceived threat posed by Facebook and Google. Ryan Jamboretz says it’s time to stand up for everything that’s great about the TV business.

Conferences are a good place to gauge the temperature of our industry. Right now, if I were a TV doctor, I would be worried.

That’s because the consistent feedback that came from the Future of TV Advertising conference in London was that this is an industry gripped by anxiety.

Anxious of being disrupted, anxious of the big digital players and anxious that they too would go the same way as the print classified business.

Delegates from some of the most progressive TV markets around the world, from companies making the most headway with addressable TV and multi-device broadcasting, all took the same tone when talking about their prospects in a world of convergence. The only point some were optimistic about was that it wouldn’t happen on their watch.

I hear all this and, while there is certainly a strong competitive set out there, I think there is a far more positive interpretation of the state of play in our business. No one is saying it’s going to be easy but it’s time to stand up for TV in an era of multi-device and multi-location viewing.

My bedside prescription would be to stop worrying about your competitors and think more about your strengths. In short I think it’s time for a bit of cognitive behavioural therapy for TV – and an embrace of four key positives.

The first is not that the display model is disrupting TV but that the TV approach is being applied wherever premium video is being watched. It’s ‘TV out’ rather than ‘digital in’.

TV still sits at the heart of the multi-device landscape and it’s being successfully augmented via additional platforms. Data from IP Networks shows that daily TV viewing has remained consistently level in the major TV markets over the last five years, and despite the multitude of new media options, TV remains the undisputed heavyweight champion for advertising.

This power is being pushed out across platforms beyond linear TV – which, according to a VOD viewing report by Thinkbox, now takes just under 62% of TV viewing; 11.4% is playback TV, while VOD adds a further 7%. YouTube takes just 4.4%, while Facebook has just 2.2% of the market.

The second positive for TV is that the players who truly understand the technology and are adapting to the multi-screen world not only have the best vision of how to create great content but they also have great understanding of the viewers.

Players such as AT&T, Sky and Channel 4 have brilliant data that enriches the opportunity for advertisers, and it’s this data that will help programmatic TV spend rise by more than 500% from $710m in 2016, to $4.4bn in just two years’ time, according to eMarketer.

The third positive is that this is a small industry both on the buy side and the sell side. While everyone needs to change as consumer behaviour brings more devices into the mix, it also needs skilled technicians who can trade and negotiate as they have for decades.

In every market, there are probably just 20 people who handle 90% of advertiser budgets. The very best content – the places where advertising is most effective – will continue to be traded in TV’s own unique manner. Material disruption to the trading models and processes, led by digital-evangelists, is unlikely to occur.

The fourth positive for television, being a scarce commodity, is that it is highly unlikely to follow the digital display route where a surplus of supply led to the implementation of auction trading models, in which price is everything and value and provenance are secondary or tertiary considerations.

Premium video inventory is scarce – hence the much higher CPMs – and that means a different model of sales is much more effective for both parties. TV is brand dominated while display and search are largely driven by performance objectives.

There are still, of course, some tricky decisions to be taken to ensure the current strength of the TV players on both sides of the trade remains just that.

TV operators might want to look at aligning to a common technology approach based around their customs and practices to ensure that everyone has serving options beyond the big digital players. It’s time to think beyond the old competitive set of getting one over your broadcast rivals.

TV operators – especially the medium sized players – need to resist the urge and the financial temptation to partner with the big digital players, particularly when they have the ability to offer what seem like a tempting medium-term offer.

You don’t want to make a Faustian bargain with a business like Google to secure two, three or five years of revenue only to have them tighten the screws once they have a foot in the door.

Anyone considering this kind of pact should look at the experience of the search industry. Tempting offers on good terms were the first part of the process, but as Google got more control, the terms have become less beneficial.

TV is a powerful platform, wherever and however it’s watched. As an industry, it’s time to be positive and stay strong and true to a powerful product and some incredibly forward-thinking broadcasters and platforms.

Keep your pecker up.

Ryan Jamboretz is chief revenue officer at Videology