Connecting with Connected TV - David Hayes - MD - MEC

Date: 19/06/2013 | Comments
Connecting with Connected Television
 
What’s driving change in TV?
There have been many events in the history of Television that have made a significant contribution to the evolution of the medium, with notable milestones along the way such as; colour TV in 1970’s, analogue Satellite in the 1980’s, digital satellite in the 1990’s and pvrs in the 2000’s. The 2010’s could well go down in history as the decade that revolutionised TV with the coming of Connected TV.
 
What is connected TV?
Connected TV – or Smart TV as it is also known - is essentially a screen that is internet enabled and connected via broadband. The screen can be powered by a set-top box, a games console or a blu-ray player. The main benefit is that is effectively releases the user from the “walled garden” of satellite or terrestrial content where instead of programmes being pushed at the consumer, it will move to an environment where the consumer pulls the content down from the web.
 
Do viewers really want connected TV?
In Bruce Springsteen’s 1990’s track “57 channels and nothing on” he quite succinctly summed up how the advent of cable TV in the US had done nothing to advance the cause of good US TV content. Indeed American cognitive Scientist Marvin Minsky was way ahead of his time when he said; “Imagine what it would be like if TV actually were good. It would be the end of everything we know.” Indeed as TV choice has expanded - you can potentially now receive over 500 channels in Ireland if you wish – people still only watch a handful of channels. More channels does not equate to necessarily more choice. 
 
One of major implications of Smart TV is that it will deliver even more choice than conventional Satellite TV. But what could possibly motivate consumers to have access to even more choice?  Sky TV pioneered the concept of “pile it high, sell it cheap TV”, where it was less about the quality of product that they were pushing at you and more about sheer quantity of channels. Smart TV  - while opening up the consumer to an even vaster array of choice than Sky – will deliver more tailored content to the consumer.  Smart TV is so called because it is exactly that. Like Netflix, Amazon or Spotify, Smart TV is intuitive. It knows what you like and it knows what your friends like and are watching and so it can push content at you, that it knows you will like. Smart TV also delivers TV content to wherever you are across multiple devices. Indeed Forrester Research has forecast that by 2016 more than half of all TV content will be delivered via the internet or on demand services. 
 
What connected TV will deliver beyond this
In the 21st century the battleground for brands is engagement and it is a constant struggle for brands to gain the consumer’s attention.  Technological developments have made it easier for consumers to avoid or ignore ads. PVR penetration in Ireland now stands at 54% and channel choice has never been greater. There is up to twelve minutes per hour on most Irish channels these days, which is a content to ad ratio that is way too high and really not sustainable. Today’s digital generation are born and reared with short attention spans and therefore the days of consumers patiently sitting through 12 minutes of TV advertising are numbered. Smart TV will arguably give more opportunities for consumers to roam in ad free environments.
 
The socialisation of TV is not helping advertisers engage with consumers either. Second screen viewing which is the phenomenon of watching TV while interacting with the content on a smart phone or tablet, has driven a behavioural change in TV consumption. Linking social media on the second screen to the programme on the first screen has proven already to be a very successful way of not just driving TV ratings, but also driving viewer engagement. Whilst this is good for broadcasters it is not necessarily good for advertisers and is adding to the erosion of attention.
However because Smart TV is connected to the Internet it does mean that advertising on Smart TV will be far more accountable. Like digital display or search, Connect TV will of course be IP enabled, which means we will be able to track the consumer. This means we will be able to more accurately measure who is viewing and engaging with our advertising in real time and therefore measure real return on investment. 
 
Is Smart TV a game changer?
Quite simply the answer is yes.  There are the monolith global players like Google, Apple, Microsoft and Netflix, who are all looking for a piece of the action. There are large regional players like Sky, Liberty Global (UPC & Virgin) and BT and finally there are local players like RTE, TV3 and Eircom. Netflix are already here and very successful and Eircom are launching a pay TV service in the Autumn. The TV market which is already cutthroat is set to become more competitive and more global. Irish content will always find an audience in Ireland but it is going to become more difficult for Irish content providers to compete. Audiences will become more fragmented also. From an advertising and advertiser point of view this is where it will get interesting. The famous quote of “half of my advertising works, I just don’t know which half” could become redundant in a new connected TV era once we have the ability to track the consumer and measure return on investment.
However it is early days yet. But if we have learned anything from the past ten years or so it is that technology is accelerating the pace of change. Smart TV is a very exciting development.  Without doubt it will change the TV landscape by introducing new players and retiring others. It will without doubt change the way we trade and measure TV and change the way we communicate with consumers. Here’s looking forward to a smart future!
 
David Hayes
David Hayes joined advertising at the tender age of 17, fresh from his Leaving Certificate. He was one of the last batch of advertising people to come through the Mail Room. He joined Peter Owens Advertising in 1982, spending six months in the Mail Room delivering letters around Dublin. From there he moved to the media department and went on to work for agencies such as Wilson Hartnell and CDP. In 1996 he set up an Independent Media Specialist called Mediator and sold a majority stake to WPP in 2001. Mediator was rebranded to MEC in 2002 a company he still leads. MEC represent a broad range of local and multi-national clients such as Heinz, DoneDeal,  Xtra-vision, B&Q, and Colgate Palmolive.