TV advertising in disruption how to adapt

TV ADVERTISING IN DISRUPTION

TOMMI RISSANEN11.4.2013

HOW TO ADAPT?

TOMMI RISSANEN

Digital and Social Media Consultant at Digital Media Finland since 2010

10 years creating digital content related projects in private & public sector and in Universities in Lappeenranta, Tampere and Helsinki

Social media, emerging technologies and digital ecosystems explorer

AGENDA

media & communications disruption

statistics

what is television in 2013?

the future

media & communications disruption

COMMUNICATIONS IN TRADITIONAL BUSINESS ENVIRONMENT

Company has a message

Message is made perfect by professionals

Message is transmitted to the customers efficiently and comprehensively

There are official processes for handling reclamations

Company

CustomerCustomer

Customer

Customer

CustomerCustomer

Customer

Customer

COMMUNICATIONS IN MODERN BUSINESS ENVIRONMENT

Company communicates openly with its customers

Company provides its customers an open communication platform

Company follows the discussions regarding it and its products in other platforms and takes part in them

CustomerCustomer

Customer

Customer

CustomerCustomer

Customer

CustomerCompany

20TH CENTURY MEDIA ENVIRONMENTPrinting press in 1450‘s- from hand copies to printing

Phone in 1870’s - from sending letters to real-time communication

Camera, film and recording 1820’s-1890’s- recording something other than text

Radio and television in 1880’s- sending picture and voice through air

21ST CENTURY MEDIA ENVIRONMENT

Music

DISRUPTIONS EVERYWHERE

Television

Movies

Radio

Newspapers

Magazines

Book publishing

PhotosTelephone

CASE MUSIC: 4 PHASES

converting the old thing to digital creating new value

Source: Digital Media Finland / Timo Argillander

SOCIAL MEDIA = COLLABOTRATION PLATFORM

The next “revolution” in productivity improvement is collaboration

Within companies

With customers

Between rivals

Throughout the value network

Social media is one tool among others in this process

It has the economy of scale advantage

statistics

CHANGE IN ADVERTISING SPENDING IN FINLAND

48,0%%%

14,2%%%6,2%%%

17,8%%%

7,7%%%

3,2%%% 0,2%%% 2,8%%%

2007$%$1475$M€$

Newspapers%

Magazines%

Printed%indexes%

Television%

Internet%

Radio%

Movies%

Outdoor%

39,7%%%

10,8%%%

3,6%%%

20,7%%%

17,8%%%

4,1%%%0,2%%% 3,2%%%

2012$%$1353$M€$

Newspapers%

Magazines%

Printed%indexes%

Television%

Internet%

Radio%

Movies%

Outdoor%Source: Mainonnan neuvottelukunta

ADVERTISING SPENDING FROM 2007 TO 2012 IN M€

2007 2012 change

Newspapers 708 537,6 -24,1 %

Magazines 210 145,7 -30,6 %

Printed indexes 91 48,4 -46,8 %

Television 262 280,1 6,9 %

Internet 113 240,4 112,7 %

Radio 47 55,4 17,9 %

Movies 2,3 2,1 -8,7 %

Outdoor 42 43,3 3,1 %

Total 1475,3 1353 -8,3 %

Source: Mainonnan neuvottelukunta

NEWSPAPERS HAVE SEEN BETTER DAYS

WHAT DOES INTERNET MARKETING STAND FOR

Source: Adex benchmark 2011

ONLINE VIDEO SHARE IN SELECTED COUNTRIES

Source: Adex benchmark 2011

TV WATCHING IS GROWING EVENLY

Source: Finnpanel

IPTV IS GROWING TOO

Source:: Finnpanel

PAY-TV IS GROWING FAST

Source: Maksu tv:n muuttuva arvoverkko, LVM - http://www.lvm.fi/web/fi/julkaisu/-/view/1278997

RANDOM STATISTICS

47% of people use the internet at the same time as they watch tv at least once per day

67% of google searches is influenced by traditional advertising

57% of people has made a google search after seeing a tv-ad

Propability of sales increases 50% when tv and internet marketing are used together

what is television in 2013?

SCHEDULED PROGRAMMING

TV channels rely heavily on scheduled programming

they know the demographics well, Nielsen (or Finnpanel) measure audiences precisely

it is (still) the only way to reach focused large audiences

all other activities of channels are subject to the scheduled programming

SCHEDULE OF FINNISH CHANNELS 11.4.2013

MONEY-MACHINE OF THE BROADCASTER

Web service

1. information regarding the content and programming

2. merchandising

3. feedback and interaction with viewrs

4. links to social media

VOD TV

1. programs watchable as a catch-up service

2. more content for premium packaged programs

3. unique content

Kanava Kanava Maksu-kanava

19.00

21.00

Broadcast TV

Channel Channel Pay Channel

MONEY-MACHINE OF THE BROADCASTER

Web service

1. information regarding the content and programming

2. merchandising

3. feedback and interaction with viewrs

4. links to social media

VOD TV

1. programs watchable as a catch-up service

2. more content for premium packaged programs

3. unique content

Kanava Kanava Maksu-kanava

Broadcast TV

Channel Channel Pay Channel

THE MONEY MACHINE OF TELEVISION HAS SAND IN ITS WHEELS

WHAT REALLY IS THE STATUS QUO?

Live sports and breaking news are the only tv-content that is watched at the time it is broadcasted

Commercials are skipped from recorded shows

Consumption of tv-content grows but mainly from on-demand side

Consumption is moving away from televisions towards computers, tablets and phones - whichever suits best in the situation

Lähde: http://www.businessinsider.com/tv-business-collapse-2012-6

ZERO-TV HOMES

Nielsen’s new category of 5 million Americans that prefer other devices for watching tv than the tv-set

75% have at least one television set

67% get their content on other devices

48% use subscription services (like netflix)

Cost (36%) and lack of interest (31%) are the main reasons

Source: Nielsen

THEN WE HAVE THESE

HOWEVER!

Television ad spending is growing

People watch more television than ever

In addition, online video advertising is growing fast

the future

ADVERTISERS SIT ON THE MONEY

Need to connect with the consumers but there are no more simple solutions

As transparency grows, advertisers have to be more and more careful

Combining traditional media with new interactive channels is not an option but a must

IT IS GOOD TO BE A CONSUMER

More content than ever

Consumption anywhere and anytime is FINALLY here

Better advertising that can be easily avoided

Disruptions everywhere

THE ROLE OF TELEVISION?

One way to distribute television and film content

Has to be able to provide other services than just the broadcast stream

What are Apple, Google and Samsung going to do?

PROGRAMMING

DECREASING VALUE

program libraries

secondary content

traditional news

small audience programs

RISING VALUE

original premium content

live sport rights

reality tv

breaking news

EVERYONE HATES PRE-ROLL ADS

Source: Sharethrough Inc.

CONSUMERS DRIVE THE CHANGE

New content needs to get fast and easy to all devices

Weekly episodes of 51 minutes will be history

Video advertising will evolve fast

Traditional ad spending in television will decrease rapidly as soon as it is realized that it does not work anymore

Tv-advertising will increase on live sports and other programming that still interests wide audiences

HOW TO ADAPT IF YOU OWN A BROADCASTING COMPANY?

Accept the facts and invest in new media channels

Commit to the change even if the revenues decrease and investment ROI is negative

Find ways to do business model innovation

A perfection of means and confusion of aims, seems to be our main problem

(Albert Einstein)

“ “

TOMMI RISSANEN+358401645364

[email protected]

@rissanen