In just a few short years, DVRs and video-on-demand have dramatically altered how television is watched. In 2006, fewer than two percent of households owned a DVR. Now, more than half do. The use of DVRs has changed along with market-growing penetration. Instead of just being time-shifters, many viewers are effectively becoming collectors, stockpiling so many shows on their DVRs that they don’t have time to watch them all. As a result, they’re also watching shows later, at a time when it’s convenient to them.
As The New York Times reported recently, this fall’s television season saw a surge of viewers watching shows four to seven days after the initial air-date. Broadcasters and cable networks typically base their ad prices on so-called C3 ratings or the amount of viewership over the course of three days of delayed viewing, and view those later impressions as effectively uncompensated.
The Way I See It
- I see people spending A LOT of time in front of a screen. According to a recent survey from eMarketers, adults in the U.S. spend four hours and thirty-one minutes in front of a television and an additional five hours and sixteen minutes in front of a computer, tablet, or smartphone screen every day.
- I see some doors opening while others close. While most viewers fast forward through at least some of the commercials on their DVRs and services like Dish’s AutoHop continue to proliferate, many networks are creating apps that allow viewers to easily access their favorite shows on their phones or using dynamic ad insertions to update ads embedded in shows viewers’ access through video-on-demand services.
- I see a growing integration of TV and social media as viewers use tablets and smartphones to engage with friends or networks while watching TV.
- I see the very meaning of “watching TV” changing as viewers increasingly access programs from a variety of devices. While televisions still dominate living room viewing, a recent survey by Motorola shows that most bedroom TV viewing now takes place on a tablet.
The Way the Industry Sees It
TargetCast has had great success as an agency helping its clients navigate these churning media waters. I sat down with Audrey Siegel, TargetCast’s Agency President, to discuss how shifting viewing habits have changed how TV advertising is sold and used.
A lot of the discussion around changing viewing habits has been focused on viewers being able to skip or fast-forward through commercials, or view ads later, because of delayed viewing. Are there other, more subtle trends in viewer behavior that are getting overshadowed by these larger issues? If so, do they represent opportunities?
It is certainly true that increased consumer control over multiple aspects of their viewing behavior has forever changed the medium at its core. The ability to time-shift viewing is really the tip of the iceberg. We must now add to time-shifting the viewer’s ability to platform shift, to actually change the location of their viewing as well as the time in which they view a particular program. In effect, dayparts are becoming intensely personal; “my primetime” supplants generic primetime. The language around the nature of the viewing experience – at-home, lean-back, me time – must now recognize mobile as well as multiscreen viewing. All of this viewing, ultimately, will be wrapped in the cloak of digitized delivery, of both ads and programming, and will open up television advertising opportunities for addressable messaging and dynamic creative versioning. This ultimately will make our most mass medium most personal, promising greater viewer engagement and potentially greater brand engagement as a result.
How have changes in viewing habits altered our ability to track the effectiveness of the advertising that does get seen? What opportunities does that create?
Tracking the effectiveness of TV advertising has long been a promise unfulfilled. We have settled for surrogates – such as program engagement, ad awareness, and commercial ratings – but in fact have not been able to directly connect television advertising with marketplace effectiveness in the most direct manner. The increasing digitization of the video medium, as well as the multi-screen nature of program and ad delivery, brings us closer to the realization of effectiveness metrics. In addition, as we build more complex multi-channel attribution tracking and modeling applications, we will better understand not only the effectiveness of one video channel, (television) but its impact on, and relationship with, other video elements (mobile, online) as well as other messaging channels (search, social).
Networks are lobbying hard to get their advertising clients to pay for C7 instead of C3 ratings. Do you see them winning that argument, and what other changes do you see on the horizon for how TV advertising is priced and sold?
To answer this question, I’m going to use a quote from a recent blog post written by TargetCast’s Director of Media Research, Michele Buslik: “Evaluation of the current broadcast season Nielsen data indicates that program audiences in the period four to seven days after the first run of an episode is up about seventeen percent from the same period last year. The networks would like to have this audience included in their upfront ratings guarantees, and we should give this serious consideration. A major first step to incorporating this audience in the next upfront negotiation could be to guarantee delivery on scatter buys during this broadcast season using C7 as the metric. This tactic could set the tone for moving forward for both those advertisers where the time frame of a shorter window of ad exposure is required and want to maintain the current C3 standard, as well as provide a framework for negotiations where incorporating the seven-day viewing window of ad exposure is a benefit. An equitable adjustment on the current pricing model based on C3 audience delivery to reflect the viewership taking place days four to seven would have to be part of future discussions, and reflective of the commercial exposure needs of each advertiser.”
Content creation is largely funded by advertising dollars. How are the changes in how we watch TV going to affect the nature and quality of the content we’ll be able to watch?
This is the golden age of content creation. We are watching better TV programming, generated from disparate sources, than ever before. This is truly one area where supply and demand are elevating the game. We have programming generated by the various commercial broadcast and cable networks, powerhouse non-commercial networks such as HBO and Showtime, burgeoning new networks such as IFC, Amazon and Netflix, independent studios, and the caliber of the writing is matched by the increased caliber of the acting. Talented and even Oscar winning actors are eager to ply their craft on the “small screen.” Add to all of this the ability to catch up on programming in multiple ways – both short and long term – and the viewer is in the position to enjoy hours of quality content, at their leisure, and in their preferred setting. In fact, there may not be enough hours in a day – let alone a week – for all of the great programming waiting to be viewed. We may soon see a new kind of vacation emerging, a week of binging on TV shows such as Scandal, Homeland, Game of Thrones, Breaking Bad or Orange is the New Black. In addition, with mobile platforms, viewers can watch at the beach, in the mountains, at home, or even abroad!!
What’s the most interesting object in your office?
I’ve got a red feather boa on my shelf that reminds me to take a step back, gain perspective, and adjust my thinking. This comes in handy when both the little – slow network – and big – client challenges – issues of the day occur. Trust me, when I wind that boa around my neck while I ponder the issue of the moment, I can reset and reengage in a healthier way, with better clarity. Try it! Let me know if you don’t get the same perspective shift, with a smile on your face to boot!