20201019 ML Brief
Can digital kill the television star?
We all know digital video is leaving its mark on television, but the jury is still out as to just how significantly it’s affected. TV still dominates in terms of viewership and ad spend, but data shows that consumer behaviors and marketing dollars are shifting.
The driving forces behind these shifts seem to be that people today are managing multiple screens (sometimes simultaneously), and on-demand technology has made streaming video so readily available that it has, in many ways, become more appealing than its broadcast predecessor.
The recent Olympic Games in Rio were proof positive that digital video is becoming more popular than ever. NBC Olympics reported that it streamed 3.4 billion minutes of digital video throughout the events. Gary Zenkel, President, NBC Olympics, said in a press release:
‘Television’ is no longer just a piece of hardware propped up on a table or hanging on a wall. Rather, ‘television’ is now a video stream — and in the case of the Olympics, a world-class NBC-produced video stream — delivered to any screen capable of rendering it.
While NBC saw record highs in digital viewership across multiple platforms, networks are not the only ones adapting to people’s viewing habits — marketers and large-scale technology companies are also acknowledging the need to adapt to new screens, platforms and formats.
Video advertising is not just a trend
Multiple studies show signs that video advertising is on the rise, and that it’s no fad. EMarketer expects the US digital video advertising market to nearly double by 2019, and the Interactive Advertising Bureau (IAB) reported that advertisers are now spending more than $10 million a year on digital video — an 85% increase over the past two years.
The two main drivers behind the hyper-growth of video advertising? You guessed right: mobile and social.
New video formats are constantly being rolled out across platforms and screens. Facebook, Instagram, Snapchat and Pinterest have all made large pushes this year behind video advertising.
We’ve heard claims from Facebook that it plans to become a more video-centric network. And just this month, we saw news that Facebook was testing serving video ads with the sound turned up (despite the fact that people may not be so pleased).
Facebook’s rival Pinterest is also making strides with video and announced that it’s starting to roll out its version of video advertising. Pinterest’s sponsored videos are built to be more consumer-friendly and will automatically play as people scroll up or down their feeds and will only play with sound once the ad is clicked on.
And let’s not forget Instagram, where the average video ad is now 25 seconds long, compared with 15 seconds at the start of the year.
When you have massive companies competing in video, fueling the growth and innovation of a specific channel, you’re going to see agencies and advertisers push more dollars in that direction. A study released in April from the IAB showed that 63% of respondents plan to allocate more dollars to desktop video, and 62% expect to increase their mobile video ad spending within a year.
People’s habits have changed
People now own more devices than ever and have become increasingly comfortable both watching and engaging with digital video on smaller screens. And just as with video advertising, mobile is driving growth in terms of overall time spent with digital video.
Instead of seeing viewership rise in the morning and evenings as we did with traditional TV, we’re seeing people gravitate to the idea of video-on-demand, whether that’s across social, blogs, and new sites or on platforms like Netflix and Amazon.
In general, viewing preferences have changed. Many of us now look for the quickest ways to get real-time news throughout the day and have become more reliant on various on-demand services.
Nielsen’s TV report even showed that we’ve reached a point where streaming services have caught up with time-shifted TV (i.e., DVR).
However, even with the increased popularity of digital video and the downward shift in time spent watching TV, people still spend the majority of their viewing hours in front of the television. The key takeaway is that digital video has carved out a new channel for marketers — it has its unique value adds, ways of engaging audiences, and diverse formats that are not easily replicated on the big screen.
And if you consider the millennial audience part of your core consumer base, a generation that literally devours new platforms and channels, you have no choice but to play hard in the video category. As people become more accustomed to digital video, they will only expect it to be more relevant and accessible across the platforms, channels and devices that they use.
Marketers should not be waiting for digital video to overtake TV, but instead, be following people’s preferences and behaviors to determine how best to use it for their brand.
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