The end of the year brings with it a spate of looks back and looks ahead. WPP Group released its “Interaction” report, a tour of where the world is and where it is going, written by chief digital officer Rob Norman. This year, the theme is screens, and how video consumption is changing rapidly. Here are five big takeaways from the report with excerpts from Norman.
Interruption is Here to Stay
We do not foresee a time when interruption is not an important part of the value contract between content owner, distributor, advertiser and the consumer. It is the daily bread of marketing. It creates awareness, context and social relevance for brands and directs consumers to richer brand experiences. It has always been the case that relatively few consumers take immediate action on being exposed to commercial messages particularly when they are not in purchase mode at the time of the message is delivered.
TV is Changing
Around the world, viewing is fragmenting. Prime time ratings have declined precipitously since the arrival of broadband continuing a trend started by the advent of cable and satellite and making the incidence of programs reaching 10% or more of any given audience a true rarity and inflating the costs of ‘must see live’ viewing like sports. This plays directly to the long-term economics of an industry which re-invested the revenue from high market share and the premiums received for reach. This funded a flow of pilots and series, the best of which became multi-series franchises with an extended monetization model across first run, re-run, home entertainment, overseas rights and format sales. If there are smaller early returns there will be fewer properties created with the potential to drive continued back end revenues that fuel further new content development.
Internet Video Still Has a Cat Problem
Short-form video remains a paradox for advertisers. It is abundant in supply for the simple reason that consumers love it; it is a gateway to young and valuable demographics and dominates media consumption on smart phones and other mobile devices. The apparent problem is that advertisers are reluctant to place their brands adjacent to much of the available content. The prototypical skateboarding cat to say nothing of “Charlie bit my finger – again” (and its 500 million views, of the original version) are seen as an unacceptable adjacencies for brands and as a consequence 90% of YouTube video streams are unaccompanied by advertising.
Social TV Has Arrived
We believe that mainstream media is a key driver of social activity at scale, as repeatedly evidenced by news, sports and entertainment lighting up the Twitter stream around the world. Every brand should push its media partners in this direction and determine how they will participate to drive their own agenda and create value for their consumers.
Specter of Data Oligopolies
If opt-in becomes the only explicit articulation of positive consumer choice it may be that three classes of data users are created. The first is a class which are unlikely to achieve an opt-in including most brands and agencies; the second being a very small class of companies that achieve an explicit opt-in for the purpose of online tracking. The third class is those companies who, through the provision, of multiple services obtain an umbrella opt-in that includes tracking for advertising and research purposes. For those readers who have never read the entire user agreements of Google, Facebook, Apple and others they should be aware that the full range of the agreement goes far beyond the right to use YouTube, Gmail or the iTunes store. If opt-in at this level is acceptable to the regulator the effect will be to create a tech oligopoly in targeted advertising. Should this be the eventual outcome it seems unlikely that the real intent of the regulators will be realized.
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