This is part 2 of my review of the TV revolution. Part 1 is here.
Now, imagine that your second screen knows you’re watching Top Gear. Based on your TV viewing pattern it knows that you are probably male, and it knows that you’ve just seen a TV commercial for the Audi A3. What’s more, it knows where you are located. If I could offer you a test-drive in the Audi A3, tomorrow, at a dealership near you – that would be pretty relevant and useful, would it not? And – crucially for the advertiser – given the warm context, you would have a high likelihood of conversion to booking the test-drive.
The idea is not revolutionary from a technology point of view. This kind of targeting happens on the Internet millions of times per day – the input is normally a search query, or a behavioural targeting profile. In the example above, the equivalent input is the TV context – it’s live, it’s warm (in the language of lead merchants), and it’s actionable, if only you know how to reach the consumer at that very moment.
So, whose opportunity, whose threat?
Adding live TV context to the data that drives Internet ad targeting is a no-brainer. But who is doing it? The obvious candidate is Google – having indexed the whole web and helped turn it into a $70bn economy, Google ought to be spidering the whole of live TV, extracting its context and connecting information and transaction opportunities from the Web to users who are online whilst watching, or who go online after watching. And yet, Google seems to be pre-occupied with two misguided efforts:
- creating a Google TV platform that asks consumers to engage with TV like they do with the Web – by searching for stuff, whilst fighting with skeptical and terrified content owners for the right to licence their crown jewels; and,
- trying to turn YouTube into a premium content distributor to compete with broadcasters, cable companies and video-over-IP providers like Hulu and Netflix.
The pendulum of power has shifted back to the existing owners of content and brands, while the distribution channels are being commoditized (Apple is trying to be the exception). But the incremental size of the new advertising and lead generation opportunity – mashing together the $170bn TV and the $70bn online advertising markets – provides enough capacity for everyone to get a piece. If they play their cards right that is:
- Programme makers are in a great position. They own the ideas, concepts and access to the celebrities that drive the social media conversation around TV. They’ve embraced apps (a good first step) and social media. Now they need to feed the web conversation and interactivity back into their programmes. The second screen is the perfect companion – potentially delivering behind-the-scenes content, access to celebrities, polls, games and competitions, and an opportunity to measure the social pulse of the show and target its fans. But in order to reach the wider market, they need to ditch the idea of show-specific apps – there are only so many individual apps consumers will bother to download, especially if these are only useful for an hour a week. The key strategy here is to partner with a platform that can deliver the relevant app or widget or content flow to consumers when they start watching the show, on whatever second-screen device they’re using.
- Broadcasters/cable companies are in a bind. On the one hand, the advent of measurable, targeted second-screen advertising threatens to expose the real effectiveness of TV commercials. But who better to sell second-screen ads than the broadcaster’s existing sales team? It’s a tick-box on the package being sold to brands already. The catch is that if the broadcasters don’t take this opportunity, the agencies and second-screen platforms will. The two types of ad inventory should be mostly incremental, so broadcasters who aren’t afraid of what actual clicks would reveal about the reach of their TV commercials should embrace this new medium.
- Brands and agencies are perhaps in the strongest position amongst the industry players – they control the flow of money and will gain access to phenomenal new analytics once we can mash up real-time TV ratings with social media monitoring and Internet traffic analysis. They need to be proactive in driving experimentation with second-screen ads and rigorous in pressing the old media giants to embrace the new data and what it really means. The ability to track effectiveness of TV ads will finally put paid to the adage that half of ad spend is wasted. Soon we will know largely which half.
- The Internet giants – Google, Facebook, Amazon, et al – can cream a lot of value out of this new market if they stick to their knitting and just look at TV as another HUGE source of user data, shareable content and contextual commerce opportunities. Imagine if Amazon used its fabulous recommendation engine to show you stuff to buy that is relevant to the show you’re watching, or to the TV ad you just saw, or that people who watch what you watch just bought? Imagine if Facebook showed you not just which friends ‘liked’ a show in the past, but actually who is watching right now and pulled in all the social media chatter around that event? But if these companies keep picking unwinnable bunfights with the industry players above, they’ll miss the opportunity right under their noses.
Stay tuned for part 3.