Media Economy Report Vol. 03
Media Economy Report The Ultimate Video Advertising Deep Dive
Video Content
Magna Global
Š 2013 MAGNA GLOBAL USA, Inc. All Rights Reserved All property, including trademarks, are the property of their respective owners and have, as applicable, been licensed for use.
Video Consumption
June 2013
Video Advertising
Vol. 03
Page 3
Page Thirty years ago, the series finale of M*A*S*H on CBS
watch in a comfortable place, like the couch. Indeed, TV
earned a 60.2 rating, meaning that nearly two-thirds
concepts are alive and well in professionally-produced
of the households in the country were tuned in. Back
online content, where the notions of a “show” and a
then, there were only three broadcast networks, only
“season” persist.
a third of the country had cable subscriptions, and watching TV meant only one thing: sitting in front of
The way we watched has changed, but the power of
the set. Flash forward to today, when Nielsen can no
sight, sound, and motion has not.
Video Content "Shows" and "seasons" are not just for TV networks anymore Page
longer report the average number of channels each home receives because digital multicasting has called
Social media has created a real-time virtual water
into question what a “channel” even is. The TV set is
cooler that gets the audience more involved with
no longer the only screen in the living room. And, of
events onscreen than ever before. And although we no
course, watching a television series is no longer tied to
longer see ratings on the level of the M*A*S*H finale,
a particular day, time, place, or device.
tentpole events have become more important than
Video Advertising Less cluttered online environments draw more attentive viewers
Page
ever because they are rare in their ability to create So is the bell finally tolling for traditional set viewing?
synchronized mass reach.
CONCLUSION
There’s certainly evidence that young adults are watching less television than they were a few years
As always, a rapidly evolving landscape like the world
ago (and streaming more), and broadband connections
of video creates both uncertainty and opportunity, and
enable video content to be piped into the home without
we intend to harness both in order to generate value for
a multichannel subscription or an antenna. Plus, tablet
our clients.
penetration has grown exponentially in the last couple of years and provides a high-quality viewing experience
Read on for our comprehensive overview of video
on the go.
consumption, content, and advertising.
And yet…
Best,
Despite the multitude of device and content options,
Brian Hughes
traditional set viewing still commands the lion’s
SVP, Audience Analysis Practice Lead
share of video time. And even when video content is
MAGNA GLOBAL
streamed, we know that the audience still prefers to
Insights for a competitive advantage
Page
06 16 24 38
Video Advertising
More screens and more access have changed viewing behavior
Video Content
Video Consumption
Media Economy Report Vol. 03
Table Of Contents
Video Consumption
Viewing Outside the Box
01
Fox Family
remains integrated. Vertical integration is common in
producing content themselves (Netflix). The map
the upper layers of the value chain. The new online/
below illustrates some of the key players and the
OTT video aggregators have recently started to move
assets controlled by the main groups.
Page 5
"channels" (YouTube) and commissioning/
The "digital" value chain
The conventional "broadcast" value chain
Disney Family
upward in the value chain by aggregating content into
antitrust lawsuits, the traditional video value chain
Media Economy Report Vol. 03
The new video advertising Value Chain
After 100 years of history, technology changes, and
Viacom Family
Sony Family
Google Family
Netflix
Production
Comcast Family
02 Networks
*
04
OTT boxes and connected devices
Devices
*Multi-channel video programming distributors (cable, satellite, telco-TV)
*Hulu is jointly owned by NBC and Fox.
Source: MAGNA GLOBAL
Viewers
Video Advertising
Online/OT T vide o ag gregators/distributors
Delivery
Microsoft
Video Content
Apple Family
Video Consumption
03
MVPD's *
Page 7
This past year, Nielsen changed the methodology by which it calculates the video-viewing universe size. Despite the near saturation of TV ownership, the expanded methodology added over 1 million households to the universe estimate.
2013
114.2
Screen bloom has reached a point where Nielsen felt compelled to redefine a
Million Homes
video-viewing household to account for all the non-TV connected devices. Younger
Media Economy Report Vol. 03
Photo: Marquis de Valmont / photocase
Video Consumption
The new definition of a TV home
2014
≥
115.6 Million Homes
Source: Nielsen, 2014 number is preliminary
viewers are adopting alternative video-playing devices mostly for short burst
viewing sessions. The lion's share of time spent watching video is in the evening, in a comfortable place, on a large format television set. Mobile and connected devices are enabling new behaviors like multitasking, binge viewing, and video sharing. The devices are capable of far more than simply splicing in ad units in the video stream. Standards for native video ads for connected devices are to be determined.
Per Nielsen, the traditional definition is:
The new Nielsen definition will be:
“…at least one operable set that receives at least one channel via traditional means of antennae, cable STB or Satellite receiver.”
“at least one operable TV/monitor with the ability to deliver video via traditional means of antennae, cable STB or Satellite receiver and/ or with a broadband connection.”
1. Cable subscriptions in the US have maxed out.
will plateau this year at 106.2 million
106
Video Advertising
6. Tablets are a popular multitasking device.
Traditional multichannel TV subscriptions
105
104
103 Video Content
5. Digital devices provide quick hits of video content.
Calling the top of the multichannel TV Industry in the US
102
101
100 2007
2008
2009
2010
2011
Subscriber gains over the past three years have only masked churn
2012
2013E
2014E
2015E
2016E
Broadband video delivery options (OTT) will cost cable, telco, and satellite providers more than a million subscribers over the next five years
Video Consumption
4. Television still accounts for the lion’s share of video viewing time.
Millions Source: MAGNA GLOBAL estimates
3. Mobile video is more likely to be a solo experience.
Key Takeaway
2. Younger viewers are adopting alternative video viewing devices.
100
Device per User
0
1.74
1.38
Number of Devices
02
1.40
0.90
1.08
0.71
1.74
04
Number of Users
Boxee
0.35
Samsung
Google TV
Apple TV
8.4
5.8
0.09
4.0
0
Hulu Plus
Xbox Gold
15.98
7.99
4.17
DVR
Live TV
21.2
Page 9
VOD
34.8
Min
36
Min
Min
35.4
3.3
0.4
PC
Tablet
Smartphone
Hours
Per Session
Hours
4.4
Hours
24.0
Source: MAGNA GLOBAL estimates
0.8
3.3
Min XBOX
Media Economy Report Vol. 03
average Duration of usage by Device
Per Week
Min
Min
PlayStation
21.6
In Million Devices
Game consoles are the most common method for bringing internet content to the TV set. All-in-one devices from manufactures like Samsung and Apple TV should grow as connected TVs become the only type of TV sold. Standalone boxes will be low-cost options.
.5
Netflix
Active users watch fewer overall hours of video on smaller screens and in shorter viewing sessions. Adults watch their sets for longer periods of time when using on-demand sources like DVRs and headend VOD, as opposed to live broadcasts.
installed base of the different Connected TV Providers
56
Video Advertising
200
0
0.6
Hours
0.3 Hours
US adults 18+ Sources: Nielsen, ComScore, Rentrak, USA Touchpoints, MAGNA GLOBAL estimates
0.2 Hours
Video Consumption
Millions
300
71 .0
Video Content
Connected TV
0
HBO 15-20
Depends on Provider
DVR
.5
Broadband Connection
49.99 per Year
Tablet
73
Cell Bill
15-25 Mbps FCC
PC
US-Dollar per month
Smart phone
Cable Subscription
Popularity of standalone video subscription services will put consumer pressure on cable operators to limit costs and potentially offer Ă la carte options.
Average per Individual
Video On-Demand
Source: Nielsen, ComScore, Arbitron, MAGNA Global Estimates
TV
PCs and TVs are shared video-playing devices, whereas mobile devices tend to have just a single user.
Costs of various video access methods
Streaming
Deployed Devices and User Bases
01
03
7.99 Streaming 7.99 for DVDs
Usage by Device
01
Age Profile of users by device type
Page 11
02
Decline in TV Usage Emerges Among the 18–24 Demos
Media Economy Report Vol. 03
Video Consumption by Demographic
Younger adults are more likely to use alternative video-viewing devices than older adults.
age 25–34
age 18–24
18–24
-7%
25.0
-10%
22.5 20.0
-4%
17.5 15.0
-5%
18–34
12.5 10.0
-2%
7.5
-3%
18–49
5.0 2.5
-1%
50+
+1%
+1%
DVR Playback 60
PC
50
40
30
20
10
0
0
2010 2011 2012
Smartphone Tablet
Sources: Nielsen, ComScore, MAGNA GLOBAL estimates
age 55–64
age 45–54
Over the past three years, there has been a steady decline
10
20
30
18–24 year-olds are spending 54% more time online and
50
60
Source: Nielsen
Teenager 12–17 30
in TV usage among young adults. The losses are more prevalent among males than females. At the same time,
40
Video Advertising
Live TV
25–54
0%
+ Video Content
age 35–44
0.0
20
their streaming video activity has doubled since 2011. 10
Video Consumption
age 65+
Tablets And TV
monthly
85%
daily
of tablet/smartphone owners use their device while watching TV at least once a month
Smartphones And TV daily
Page 13
Binge Viewing Not the Threat it’s Made Out to Be While the proliferation of internet-connected
78% of Americans have watched TV “on [their]
devices has made binge viewing a fact of life,
own schedule,” and 62% of those have watched
it is not the threat to traditional television that
multiple episodes of a TV show at a time (“binge
many press stories would have us believe. In
viewing”), according to survey results from
fact, there is plenty of evidence that when
Harris Interactive.
Media Economy Report Vol. 03
New Access Methods Enable New Viewing Behaviors
viewers binge to catch up on a show that is currently airing, it can actually help increase the audience for the regularly scheduled
41%
39%
Skews Older
Skews Younger
39% Social Media
36% of people 35–54 and 44% of people 55–64 use their tablets to dive deeper into TV programs they are currently watching. Surfing and emailing 55–64 are the heaviest web surfers and email-checkers
≥
≥ DVD Release Mar. 8, 2011
Series Premiere Oct. 31, 2010
21%
to 50% of 25–34 year olds are
More than twice
25%
their smartphones during both
15%
watching TV.
For the full duration
Source: Yahoo
commercial and programs while
demos, with over 50% of users checking during commercial and
Sport Scores
programs.
Nearly a third of all tablet users aged 25–64 check sport scores
Shopping
on their tablets while watching
29% of 25–34-year-olds shop
TV.
on their smartphones while watching TV. Source: Nielsen Cross Platform Report 2Q12
Viewers
Available for streaming on Netflix Sep. 30, 2012
DVD Release Aug. 28, 2012
Season 3 Premiere Oct. 14, 2012
Downton Abbey Season 1
Season 2
Emailing smartphone activity across all
breaks and programs.
Season 2 Premiere Oct. 16, 2011
10.2MM
≥
visiting social network sites on
is the heaviest simultaneous
on tablets during commercial
6.6MM Viewers ≥ Available for streaming on Netflix Oct. 7, 2011
44% of 18–24 year olds and close once or twice
Season 3 +55%
4.1MM Viewers Series Premiere Jan. 9, 2011
≥
≥ DVD Release Jan. 11, 2011
+17%
4.8MM Viewers Available for streaming on Netflix and Hulu Plus Feb. 9, 2011
Sources: Walking Dead = Nielsen Live+3 Commercial Data Downton Abbey = Nielsen Live Data
Season 3 +63%
Season 2 Premiere Jan. 8, 2012
≥
7.8
≥ DVD Release Feb. 7, 2012
MM Viewers
Available for streaming on Netflix and Hulu Plus July 7, 2012
Season 3 Premiere Jan. 6, 2013
Video Advertising
Seeking Information
Less then once per show
5.2MM Viewers
+27%
Video Content
i
Typical Activities
Season 2
Video Consumption
Typical Activities
TV at least once per day.
≥
I multitask while watching TV
The walking dead Season 1
≥
while watching TV.
their smartphone while watching
≥
Nearly half of 18–24 year olds use
are the most likely to use their
≥
Age groups 25–34 and 55–64 tablets multiple times per day
telecasts.
Client Perspective
provide to earn more of your advertising budget? We need the digital video industry to enhance their ability to target specific online audiences and stick by devices owned by same users, helping us to deliver the most relevant message and drive identifiable behaviors.
Page 15 Media Economy Report Vol. 03
What does the digital video industry need to
How will the US TV upfront be different in five years? We are seeing different consumption habits on each device dependent on audience; as well as
Q
&
A
the ability to get greater scale within the cable networks. Cable is not only allowing “on-demand viewing” regardless of device type, but the ability for product integration into their programming, creating richer, relevant, seamless experiences for the customer we are targeting. The publishing community and networks will need continue to evolve in their delivery mechanisms to best enable satisfying experiences for consumers and
EVP, Director
Amy Peet
advertisers.
Senior Digital
of Forecasting
Marketing Manager
MAGNA GLOBAL
Chrysler Group LLC
How does sight, sound, and motion fit in to how you tell
We have embraced video across the board in a
your brand's story?
measured test-and-learn fashion. What started out as
Video Advertising
Vincent Letang
the spectrum, ranging from premium “TV-everywhere”
nailed the ability to deliver a story through sound, but
to networks and in-stream pre-roll. We have even seen
the ability to incorporate gesture- and sound-based
some interesting results from our mobile video buys.
Video Content
tests has now evolved to healthy levels of video across In automotive, experience is key. We believe we have
interactions with our advertising, making the customer apart of our brand story, is an opportunity. As the living
Digital video is a mixed bag. What aspects of digital
room evolves, we are looking to integrate and expand
video advertising have the most promise?
these developing trends.
Video Consumption
our creative and advertising platforms to capitalize on We see in-app, on-demand viewing on platforms like Hulu deliver the best results. Tablet-based How have your investments in video advertising
opportunities have proven the ability to drive success
changed over the last five years?
on our online properties.
Photo: David Sundberg/ESTO
Video Content
On TV set without a set top box
The definition of a TV show is changing. Connected devices allow viewers to follow the narrative arc beyond regularly scheduled episodes. There is a flood of new cheap-to-produce video content being originated to run only online. While online viewers tend to be more engaged in the content they are watching than TV viewers, the challenge will be for digital shows to build enough reach
Page 17
Surveyed video viewers report using digital devices for short-form video, while the big screen is used for movies and sports.
Full-length movies and TV series
51
Live content (e.g., sports, news, TV programs)
48
On TV set connected through a set top box
On PC or laptop
63
User-genereted content (e.g., videos on YouTube)
17
16
1. Many inexpensive shows are now being produced to run exclusively online.
Short videos/clips
16
14
Do not watch this type of video content
16
On mobile phone/ smartphone
47
53
to rival linear TV outlets.
Media Economy Report Vol. 03
Content Genres by Device
On tablet
14
38
33
21
61
29
50
51
49
49
44
2. Unscripted “reality� series remain relatively inexpensive to produce and
primetime TV series. 5. Online viewers are more engaged than TV viewers.
16
11
Source: Accenture Video Solution Survey 2013 Percentages do not add up to 100 because of multiple positive responses.
Reality and unscripted TV continues to grow in popularity, now earning the
6.8
second most primetime rating points.
6.9 7.7
TV Genre Popularity
11.8
Percentage/Primetime Genre, Share of GRPs
11.9
23.1
31.8
Drama
Sitcom
Reality
News
Movies
Sports
Video Advertising
4. Tentpole events generate far more social chatter than any episode of a
6
Other Source: Nielsen, 1Q13, broadcast and cable
Video Content
individual YouTube channels are much smaller.
12
Video Consumption
3. In aggregate, the YouTube audience rivals a cable network; however,
Key Takeaway
are popular with mass audiences.
Made-forTelevision Series
Are there any examples?
The Big Bang Theory (CBS) The Walking Dead (AMC) The Voice (NBC)
Short-Form Web Series
The Guild (YouTube) Wainy Days (My Damn Channel) Electric City (Yahoo)
TV Shows
14 %
DVD Trailers
13 %
Professional
Page 19
14 %
Media Economy Report Vol. 03
the characteristics of a modern, Professionally produced video “show”
Long-Form Web Series
Battleground (Hulu)
Sharing Video Clips online
House of Cards (Netflix)
Excerpts/ Short-Form
The Bannen Way (Crackle)
ShareThis reports that each time a link to a video clip is shared online, it generates 25 clicks. The ability to
Are there seasons?
How many episodes per season?
How long is each episode?
Yes
Yes
capture and share video content will
Yes
grow beyond embedded web videos.
22 for broadcast TV, 10–16 for cable TV
10–12 Episodes
clip generates 25 clicks
Less than 10 minutes
Yes, most shows are available after their linear air date through headend VOD, network websites, or full episode player mobile apps
Can be streamed via PCs, connected TV devices, tablets, or smartphones
$2.5–$5 million per episode for dramas
$10,000–$100,000 per episode
Cats
13 Episodes Every shared link to a video
22 Minutes for comedies, 45 minutes for dramas
9%
9%
22 Minutes–1 Hour
7%
Home and Garden
Heath and Fitness
5%
Autos
5%
Movies
4%
Travel
$400,000–$2 million for sitcoms
3%
Parenting
$300,000–$1 million for unscripted shows
3%
Clothing
3%
Other
2%
Technology, Book Reviews, Food and Drink
Source: MAGNA GLOBAL estimates
each
Video Content
Video Games
Video Consumption
How much does it cost to produce?
$750,000–$2 million per episode
5%
Video Advertising
25
Is it available on multiple platforms?
Can be streamed via PCs, connected TV devices, tablets, or smartphones
25
Tweets (Million)
20
Page 21
In aggregate, YouTube has the daily reach of a cable TV network, but its individual channels are far behind.
200.000
Social chatter around TV shows
01
New mass reach video networks
03
Media Economy Report Vol. 03
New consumption patterns by content genre
The average number of tweets per
150.000
episode shows that live tentpole events have much higher activity levels
15
than even the most tweeted regularly
100.000
programmed shows. 10
Source: SocialGuide. For ongoing series the total number of tweets was divided by the number of first-run telecasts.
50.000
5
fli x oa @ db Yo an NB uT dT C ub V En e te r @ tai Yo nm uT e ub nt e
N
et
u ul H
uT
Br
er
ak M
VE
VO
@
Yo
Ch Di
sn
ey
Yo
ub e St @ udi Yo os uT In ub c. e
TV M
an
ne
l
E!
e uT
ub
PN ES
AB
C NB Th
TV C Sh atfi ow sh (M : Th TV e ) Am er ic an (F Ido OX l ) Du ck Dy n (A ast & y E)
ng D (A ea M d C)
ki al W e
et Pr
ho ’C
Source: TV= Nielsen, Total Day Unduplicated Reach, A18+, 1Q13. Top 30 Broadcast and Cable Networks. Online= Comscore, A18+ reach, 1Q13.
Ki
ds
ty
ic
Li
e
tt
Aw
ar
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55
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rb o XL wl VI
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0
0
02
Neuroscience research by UM and Vevo showed that
High
engagement was highest when watching full TV shows online. Music videos on any platform drove the highest emotional feelings.
Med
Content Measurement Engagement
Emotional Intensity
Long-Term
Content-Ad Break
Measure of personal
Measure of the strength
Memory Encoding
Transference
relevance and viewer
of the emotional reaction
investment in content
elicited by content
Measure of whether an ad
How well does content
is encoded into long-term
transfer its strength to the
memory
subsequent ad break?
High ad memory encoding
A crucial element
correlates with consumer
in determining ad
choice and purchasing
effectiveness is how much
behavior
of the program‘s strength
More engaging content
Higher emotional intensity
tends to be more appealing,
indicated strong emotional
enjoyable, and successful
appeal
The stronger a viewer‘s emotional or engagement
Low
reaction, the more likely they will be to remember it TV
Online TV
Online TV Clips
Music Videos
Ad Measurement
is converted to higher ad performance
Video Content
Emotional Intensity
Video Consumption
Content Engagement
Brain activity by Content Genre
Video Advertising
Key Metrics and Terms
Page 23
Media Owner Perspective
Media Economy Report Vol. 03
What are the opportunities for advertisers in the multitasking living room?
Todd Gordon
It might sound obvious, but the biggest opportunity for an advertiser is to fully surround a viewer with their message. By connecting what’s being viewed on TV with unique, complementary, and action-oriented messaging on digital platforms, advertisers can drive their business
Peter Naylor
directly from someone’s living room. That’s pretty powerful. The most important considerations for advertisers are that their messaging
How has multi-platform delivery influenced the content you create?
is insightful, provides a service, and is entertaining. Ideally, the advertiser’s message would be customized for real-time marketing.
Todd Gordon EVP, Integrated
That’s a true service to the viewer.
Everything we create today goes through a filter of: "What will the
Trading at
experience for our audiences be across platforms?" We understand
MAGNA GLOBAL
that our audiences might be watching our programming in their living rooms, during their daily commutes, on a plane, or during a short break at work. That means we have to pay special attention to the variety of platforms they’re using. When we build content, it’s all about
Peter Naylor
How do you build your advertisers into the show?
EVP of Digital Media Sales at NBCUniversal Todd Gordon
leveraging the native attributes of each platform to make the viewing experience more engaging and rewarding. Combining video series with
By listening to their needs. There’s never a one-size-fits-all solution. Some advertisers want high-impact creative. Others are looking
content enhancements—like accompanying web-only video, second
for product integration or complementary content sponsorship. And
screen possibilities, and highly sharable components—only leaves our
still others are looking to get their products directly in the hands
audiences more engrossed in and devoted to the story.
Peter Naylor
of consumers. Whatever the advertiser’s needs, media companies know their audiences best. It’s essential we provide our advertising partners with our guidance and expertise in crafting unique solutions that resonate with fans of our shows.
What are you doing about the ever-growing demand for video? At NBCUniversal, we’ve got a wide range of audiences who represent Todd Gordon
watch live, while entertainment and primetime can be a combination of the two. Live versus time-shifted viewing can result in different user perspectives—ranging from a lean-forward to a lean-back mindset. For advertisers, an understanding of the mindset of a media properties viewing audience is essential, so that their messaging can be customized to be most relevant to that viewer, whenever and however they’re watching.
Peter Naylor
Video Content
both viewing behaviors. We know that news and sports audiences Well-watched video can come from anywhere—not only from our internal producers, but also from viewers and advertisers, too. At NBCUniversal, we’re aggressively developing new ways to build engaging video for audiences. We just created the TODAY Show Digital Studio, where we easily extend the TODAY TV story in web-only extras. Additionally, we have a full-service, in-house production team that helps our advertising partners create sponsored videos that we know will resonate with our audiences and work seamlessly with our programming.
Peter Naylor Video Consumption
Todd Gordon
Video Advertising
Is there a difference between a live view and a time-shifted view?
02
Page 25
In 2013, the global video ad market will be dominated by North America ($67bn, 34%) and Asia-Pacific ($64bn, 30%). APAC, however, will grow a lot faster in the next four years (+7.6% CAGR v. +3.1% for North America) to become the biggest region for video advertising.
TV is suffering from attention pollution. Increased ad clutter is undermining TV
North America
commercial’s effectiveness. Online video provides a much less cluttered and attentive environment for ads. However, the ability to accumulate reach online is limited—early
51
67
$
models suggest that shifting 5–10% of a TV budget is the optimal way to expand reach. Shorter ads in high-quality content viewed on tablets offer the most value.
Media Economy Report Vol. 03
Video AdvertisinG
Global Video Advertising Revenues By Region
EMEA
APAC
Advertising Revenues in Billion Dollar
1. Global online video advertising will double in the next four years to 5% of total video ad spending.
LATAM
25
2. Linear TV is getting more cluttered in terms of ad minutage and units per minute.
64
3. Increased clutter has reduced the impact of TV advertising on brand sentiment
Source: MAGNA GLOBAL
Key Takeaway
6. 5–10% of TV budgets should be shifted to online video to maximize reach.
Programmatic video buying
03
Ad revenues in billion dollars
01
Global Video Advertising Revenues By Format
As of 2012, global ad video revenues were $203
Online Video
billion, of which free TV represented 73%, pay TV $
24%, and online video 3% ($5.2bn). By 2017, the global market will reach $270 billion, with online
Pay TV Free TV
video tripling to $14bn (5% of the total).
300 250 200 150
$
$
€
€
$
$
€
€
$ $
$ $
€
€
$ $ €
$ $ €
$ $
€
$ $
€
250%
$4,000,000
200%
$3,000,000
150%
Online video is a bit behind display in
$2,000,000
100%
terms of the proportion of inventory
$1,000,000
50%
$0
2008
2009
Source: MAGNA GLOBAL
2010
2011
2012
2013
2014
2015
2016
2017
time bidding in exchanges), is developing rapidly.
being bought programmatically, but is catching up quickly.
0% 2012
Source: MAGNA GLOBAL
0
“big data” and—sometimes—real-
$5,000,000
Traditional
50
buying (automated trading based on
US Online Video: Programmatic vs Traditional Buying
2011
100
In the US and Europe, programmatic
2013
2014
Programmatic
2015
2016
2017
Programmatic Growth Rate
About 15% of the $2 billion online
Video Advertising
5. Tablets lead other video devices in the unaided recall of ads.
Video Content
4. Online video is significantly less cluttered, contributing to higher ad attentiveness.
video transactions in the US in 2012 were "programmatic". We believe that proportion will grow to 60% by 2017.
Video Consumption
over the past five years.
Commercial Clutter in Primetime
A UM analysis of Kantar-reported ad spending and BrandIndex health metrics shows the impact of TV advertising on brand sentiment has declined significantly over the last five years. The impact on 60%
has been flat. However, the
Methods of Ad Avoidance
number of commercial units
Moving thumbs to fast-foward through
per minute has increased
commercials is the least of our problems.
broadcast prime minutage
TV: Brand Sentiment Non-TV: Brand Sentiment
50%
Video Ad Effectiveness
In the past five years, US
non-TV media has not been as pronounced.
40%
by 7%.
30%
60 %
IPG Media Lab research has shown the real problem is moving heads to look away
US cable TV commercial 20%
Page 27
03
Advertising Struggles to Break Through
Media Economy Report Vol. 03
01
from the TV set.
minutage is up 14% in the last five years.
10%
The number of units per
8%
minute in cable is down 7%.
0% 2007
2008
2009
2010
2011
Q3 2012
Source: Universal McCann Advanced Analytics, based on BrandIndex & Kantar data, December 2012
Broadcast TV Cable TV
7%
loads increasing.
Primetime TV
2.2
3%
Online TV
2.4
1.3 min
16 min
Change Channel
Video Advertising
Online still low, but ad
Turn Head
14%
Fast Forward
2011/2012 Commercial Units per minute 5-year growth in commercial minutes
Source: Nielsen and ComScore Source: Nielsen and Kantar. Five
Source: Turning Head: YuMe Attention in the Wild Study; Channel Changing: Nielsen aggregate
broadcast networks and 20 top tier
Broadcast/Cable Prime rangs; Fast Forwarding based on DVR Penetration, DVR Activity and
cable networks.
Commercial Skip Rate. Q2/11 (YuMe in the wild)
Video Content
Ad Minutes per Hour by device Type
Video Consumption
02
01
Video unit length by device
Ad retention in time-shifted playback is higher in sitcoms than drama or reality series.
The length of video ad units
Ad Length Effectiveness
02
most commonly used is similar on TV and online.
50% Online TV 40%
30%
30 sec
15 sec
100
89
84% 80%
75%
70%
Source: Nielsen Live+3 Day viewing, 1Q13
60%
(includes broadcast and cable)
Low clutter and higher attention levels make online video ads more effective than regular TV ads. :15s are more than half as effective as :30s.
Regular TV
Page 29
04
88%
90%
Media Economy Report Vol. 03
Video Ad Unit Characteristics
Fast-Forwarding in Recorded Shows
Drama
Unscripted Reality
Sitcom
State of Product Integration Product Placement Spending by Region 800
15 sec
Source: Measuring Ad Format Impact
11,6%
200
11,5% 11.4
Study; Google/ARF/Wharton/Stanford
Sources : Freewheel, Nielsen
0
11,4% USA
Online content length impacts ad viewing. Video ad completion rates are significantly lower in short-form content, as viewers often decide it is not worth it to sit through an ad. Source: Freewheel
100%
93%
Source: PQ Media
81%
80%
Product Placement Spending by Device
68%
60%
Spending in Billion $
03
Viewers less tolerant of ads in short clips
Global
40%
20%
30%
400
20%
200
10% 12.9 8.1
0 0% 20+ min
5-20 min
-5 min
31.4
600
TV
Movies
0% Online & Mobile
According to the PQ Media global Product Placement Spending Forecast 2012-2016, Global product placement spending continues to increase, with the US leading the way as the largest market. Most global spending on brand placements is in the TV category, followed by movies and then online and mobile. However, online and mobile brand placement spending is increasing at the most rapid rate.
Video Advertising
More then 30 sec
400
YoY Growth Rate
Time of Ad
16–30 seconds
11,7%
Video Content
30 sec
15 seconds and below
11.7
600
Video Consumption
10%
134
11,8%
YoY Growth Rate
149
Spending in Billion $
20%
Where can you target households in 2013?
As of mid-2013, four multichannel video programming distributors (MVPDs) offer addressable linear TV ad campaigns: DirecTV and Dish (satellite), Verizon FiOs (telco TV), and Cablevision (cable TV in the greater New York area).
How many households can be reached?
DirecTV has run 43 addressable campaigns between January and April 2013, compared with 12 for the whole year 2012. Brands include auto, insurance, and movie studios.
100%
2012 January–December
2013 January–April
44
0
2014
12
Campaigns
43
Campaigns
Page 31 Video Consumption
25
2013 Source: MAGNA GLOBAL
DirecTV’s addressable TV campaigns
Video Content
118
Millions
In the US, 26 million homes (22% of all TV households) are addressable by multichannel TV providers. With new MVPDs expected to expand or launch in 2013–2014 (e.g. Comcast, TWC), that number will grow to nearly 50 million by end 2014, e.g. a critical mass.
Traditionally, MSOs can use their cable avails to insert linear commercials in only some sectors of their footprint, down to zip-code levels. Household-level addressability will now allow MSOs, as well as satellite TV and telco TV providers, to use their avails to target individual homes using subscriber data or third-party data (income, family status, car ownership, etc). Watching the same network in the same area, one family will see a car commercial while others will see a soft drink spot.
Media Economy Report Vol. 03
Households meeting criteria for a given ad campaign
04 02
From area targeting to household addressability
Source: DirecTV
01
03
Video Advertising
Addressable TV advertising
01
Page 33
02
Existing Solutions
Cross-Platform Campaign Ratings
Media Metrix Multi-Platform
Media Economy Report Vol. 03
State of crossplaTForm measurement
Potential Solutions
5-Platform Ratings
TAXI Initiative
Online Audience
Television Audience
+
Combines Nielsen’s Online Campaign Ratings product with Nielsen’s full National People Meter Sample for TV audiences
Includes mobile element via ComScore’s MobileMetrix panel
Tagging of TV ads enables overnight tracking of ad performance Enables the user to see TV and online reach individually as well as the combined reach of both -
Strengths
-
Provides unduplicated audience across online display, mobile display, and online video
Details on methodology not yet released
Weaknesses
Future of the initiative is uncertain given the potential Nielsen-Arbitron merger
Video is limited to PC only; no TV or mobile video is captured Weaknesses PC audiences only; does not include tablets or smartphones Still largely geared toward online display ads Does not include viewability metrics for online video, e.g., was the content “above the fold?”
Goal is to measure display, audio, and video content across five platforms
Reporting is monthly and content-based; not specific to ad performance
TAXI stands for Track-able Asset Cross Platform Identifier, a simple open standard for tracking video assets (content and ads) across platforms and formats Will withstand digital compression
Preliminary work has begun with ESPN properties A combination of existing Ad-ID (advertising) and EIDR (content) tags Gaining serious momentum now that all ads produced with SAG-AFTRA talent will require Ad-ID Has the potential to save billions in administration costs and enable real-time tracking of video across all screens
Video Content
Strengths
Video Consumption
+
Video Advertising
TV & Online
Page 35
Experiments in the IPG Media Lab
Media Economy Report Vol. 03
01
TV Audiences Migrate between channels when ads come on
show that 10% of linear TV's audience changes the channel when the first ad in the pod comes on. Channel switching stablizes after the first ad in the pod.
100%
Commercial Break
% of audience watching by channel
80%
Commercial Break
60%
Commercial Break
Commercial Break
40% 20%
Commercial Break
Commercial Break
0%
Seconds elapsed from start of content
Video Ad Effectiveness by Device
A study by the IPG Media Lab and
A study by the IPG Media Lab and
Undertone revealed that a large player
YuMe found that the biggest impact
size on a high-quality site was the
on ad recall came from video ads
largest driver of video ad effectiveness.
played on a tablet.
04
Unaided Ad Recall
Quality Size
43%
Placement
Reallocating 5–10% of TV dollars to online Full Episode Players optimizes target reach
81
49%
47%
45%
40%
20%
80
79
78
User-Initiated
0% 77
33%
Tablet Source: IPG Media Lab, Undertone Media Trial, August 2012
Smart phone
PC
TV
% of TV Budget Shifted to FEP's Source: UM CAT Reach Combination Analysis, Audience Women 18–49
Video Consumption
14%
56%
W18–49 Reach %
13%
60%
Optimize Video Reach Across TV and Online
Video Advertising
03
Video Content
Attributes of an effective online video ad placement
Delta (Test-Control)
02
Page 37
other channels on the plan. What is the optimal
resource that is the standard for defining overall
sequencing of messages? Optimal frequency by
population size. Then (and only then) can we
channel? This level of insight was impossible just
determine what percentage of that audience we
a few years ago—now it is real and exciting for
are connecting with. Unfortunately, we still operate
marketers.
in a world where some research tools operate on a campaign by campaign basis and are not
Will video buying be automated like digital display?
universally accessible by buyers and sellers. So,
The business will continue to expand in two
for an individual campaign in-market or post-
directions. High-touch, strategic, custom programs
market we can get a good read, from a pre-market
will continue to thrive and offer us the opportunity
perspective it is much harder without an open
to break through the advertising clutter. In addition,
standard.
data-infused, platform-enabled programmatic
Media Economy Report Vol. 03
Agency Perspective
coverage, there needs to be an open industry
solutions will also flourish. Some video buying will
Q
&
A
What is the biggest bargain in the video market?
be bundled into custom deals, but the vast majority
Dogs on skateboards. We can run ads there very
will be automated like digital display. We see that
cheap. Seriously, the real-time programmatic
happening in earnest over the next several years,
video marketplace has gotten red-hot. We can use
and we are organizing ourselves to take advantage
a variety of first- and third-party data to target
of that exciting opportunity for brands.
specific audiences, eliminate waste, and maximize performance. Video as a platform is a bargain today —as we know there are few tools more powerful than sight, sound, and motion to drive a brand’s business.
Douglas Frederick Director, North America Investment
David Cohen Chief Media Officer
How do you measure digital video ad
UM
effectiveness?
MAGNA GLOBAL
The possibilities are truly endless. Depending on the role that digital video is playing in an measurement framework to read, analyze, and
No. Next question (kidding). It is valuable to think about
of valuing those impressions, there is still work to do.
this in two ways. First of all, we need to think about
Early studies we have conducted, as well as industry
our ability to simply count impressions the same way
research, is showing that online video impressions
across channels. Then, the more interesting question
can be more effective than television at driving brand
becomes how we think about determining a value for
recall and preference. With price parity becoming a
each of those impressions. The good news is that the
reality and consumer usage as our guiding light, we are
marketplace has advanced tremendously across both
very optimistic at driving our platform-neutral video
dimensions in the past year or so. We now have the
planning approach across our clients.
ability to measure audience-based impressions across screens in a much more meaningful way. Demographic
Can you predict audience coverage in a video-anywhere
impressions and rating points across channels is
plan the same way we can in a TV-only video plan?
a reality. We have even begun to push into custom
Tough question. The answer is yes and no, and it varies
lifestyle and behavioral segments with the help of some
by market. In order to accurately measure audience
react. If we are using digital video as a means of extending reach to a plan, we can measure deliveries against discrete audiences. If we are looking to drive brand preference or purchase intent, we can use a variety of qualitative tools and surveys to measure the impact of our video efforts to drive those metrics. Most importantly, we now have the tools to understand the
Video Content
of our measurement partners around the world. In terms
optimal relationship between digital video and Video Consumption
Are all video ad impressions equal?
Video Advertising
overall communications plan, we can adapt a
Video Content
1. Cable subscriptions in the US have maxed out.
1. Many inexpensive shows are now being produced to
New Finding: Households that view broadband video on
run exclusively online.
their TV sets will now be included in Nielsen’s definition
New Finding: While generally less than 10 minutes per
of a television home.
episode, they retain the concept of a “season.”
2. Younger viewers are adopting alternative video
2. Unscripted “reality” series remain relatively inexpen-
viewing devices.
sive to produce and are popular with mass audiences.
New Finding: Adults 18–24 are spending 54% more
New Finding: They also currently account for more
time online, and their time spent streaming video has
prime air time than any other single genre.
doubled since 2011.
3. In aggregate, the YouTube audience rivals a cable
3. Mobile video is more likely to be a solo experience.
network; however, individual YouTube channels are
New Finding: Digital devices like tablets, smartphones,
much smaller.
and even PCs have a lower user-per-device ratio than
New Finding: Netflix and Hulu are also popular, but
TV sets.
reach fewer unique people than even some YouTube
4. Television still accounts for the lion’s share of video-
channels.
viewing time.
4. Tentpole events generate far more social chatter than
New Finding: Between live and delayed viewing, US
any episode of a primetime TV series.
adults spend over 39 hours per week in front of the set.
New Finding: Social activity for ongoing programs still
5. Digital devices provide quick hits of video content.
provides valuable insights.
New Finding: Video sessions on PCs, smartphones, and
5. Online viewers are more engaged than TV viewers.
tablets are under five minutes on average.
New Finding: Watching a TV series online generates
6. Tablets are a popular multitasking device.
stronger emotional responses than watching on a set,
New Finding: 41% of tablet users say they multitask
likely because of the on-demand element.
while watching TV daily.
Page 39
1. Global online video advertising will double in the next four years to 5% of total video ad spending. New Finding: Within the same time frame, programmatic buying of online video will grow to 60% of all transactions. 2. Linear TV is getting more cluttered in terms of ad minuteage and units per minute. New Finding: Cable is driving the growth of
Contributors Brian Monahan @brionic Managing Partner, Intelligence Practice, MAGNA GLOBAL brian.monahan@magnaglobal.com Brian Hughes @bhughes_magna SVP, Audience Analysis Practice Lead, MAGNA GLOBAL brian.hughes@magnaglobal.com
commercial minutes in primetime.
Vincent Letang @vletang_magna
3. Increased clutter has reduced the impact of TV
EVP, Director of Forecasting, MAGNA GLOBAL
advertising on brand sentiment over the past five years.
vincent.letang@magnaglobal.com
New Finding: While there has also been a decline
Kara Manatt @karamanatt
among non-TV media, it is not as pronounced.
VP, Consumer Research Strategy, IPG Media Lab
4. Online video is significantly less cluttered,
kara.manatt@ipglab.com
contributing to higher ad attentiveness.
Todd Gordon @tpgtweets
New Finding: Completion rates are highest in content
EVP, Integrated Trading, MAGNA GLOBAL
that is 20 minutes or longer. 5. Tablets lead other video devices in the unaided recall of ads. New Finding: TV had the lowest recall percentage,
Media Economy Report Vol. 03
Video Consumption
Video Advertising
todd.gordon@magnaglobal.com Douglas Frederick @dougmfred Director, North America Investment, MAGNA GLOBAL douglas.frederick@magnaglobal.com
behind even smartphones. 6. 5–10% of TV budgets should be shifted to online
Stefanie Morales Associate Director,
video to maximize reach.
Audience Analysis Practice, MAGNA GLOBAL
New Finding: In addition to additional reach, Full
stefanie.morales@magnaglobal.com
Episode Players also deliver a more attentive audience.
Graeme Hutton @graemehutton SVP, Group Partner, Research, UM graeme.hutton@umww.com Art Thomas
Video Advertising
Summary Cheat Sheet
Partner, Advanced Analytics, UM
Concluding Tweet
Vincent Letang @vletang_magna
Madeline Wirthman @maddiewirthman Executive Assistant, MAGNA GLOBAL Madeline.Wirthman@magnaglobal.com
Video Content
art.thomas@umww.com
seek high quality, lean-forward, clutter-free environments to drive results
Design by Martin Oberhäuser @oberhaeuserinfo Founder, oberhaeuser.info martin@oberhaeuser.info
Video Consumption
Video ecosystem exploding—Advertisers should
About MAGNA GLOBAL MAGNA GLOBAL is the strategic global media unit of IPG Mediabrands, driving forecasts, insights, and negotiation strategy across all media channels. The MAGNA GLOBAL Intelligence Unit delivers the industry’s most accurate and authoritative forecast of media value. The MAGNA GLOBAL Investment Unit harnesses $36 billion of IPG Mediabrands global media billings.
About IPG Mediabrands Created by IPG to manage all of its global mediarelated assets, IPG Mediabrands employs 8,500 communications specialists operating in 90 countries and manages $36B in global media billings. A proven entity in helping clients maximize the impact of their marketing investment to deliver explosive business results, IPG Mediabrands enhances the communications offering and performance across its network of media agencies including Initiative, UM, MAGNA GLOBAL, and a roster of Specialty Service Groups. IPG Mediabrands is part of Interpublic Group (NYSE: IPG), one of the world´s leading organizations of advertising agencies and marketing services companies. For more information, please visit www.mbww.com or follow us on Twitter at
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@ipgmediabrands.