According to the latest IAB PWC Expenditure report video expenditure has grown by 45% year on year. This is a sizable pie, which as per the PWC Entertainment and Media Outlook is estimated to grow at a 23.8% CAGR between 2018 and 2022. This increase has partly been due to the shift in brand dollars out of Television to online video. Unsurprisingly in the last three years every network has invested more dollars into creating more inventory by commissioning original content or attracting external creators. Last week Facebook Watch entered this increasingly crowded video marketplace with more entrants such as CBS and Disney expected to launch their offerings soon. But these platforms have some serious catching up to do with Netflix already approaching 10mn subscribers this month, and continuing to invest heavily in new shows.
Australian video landscape
There has been a lot of new research and rhetoric from all players this year using planks like ‘premium’ and ‘brand-safe’ to try to position themselves over other competitors. I think we need to look at it from the consumer’s point of view rather than the aperture of individual platforms. In the matrix below I have attempted to create a rudimentary overview of the screen content landscape.
The two upper quadrants have platforms with longer studio scripted content while the lower quadrants have shorter, influencer or user-generated content. The quadrants on the right allow users more choice and convenience and they are more active when seeking or consuming specific content. On the left users are passive or just grazing through feeds.
In the top left is TV which is the still the leading screen with a higher time spent per month compared to video on other devices. TV, Cinema and Digital OOH in combination are great for reach building in the awareness stage of customer journeys. Linear TV’s sibling BVOD just released a fact pack of stats about its outstanding growth on the back of of a rise in connected TV viewing in H2 2018. Those who watch are highly invested in this content (and the experience is passive) so with most content being watched to completion it provides advertisers the ideal environment for 30 second brand TVC’s in pre or mid-content breaks. However I see BVOD as just complimentary to Linear TV as the content is similar and the choice is limited to a few genres. If you don’t enjoy dating, food shows and renovating or not all of them then you will seek content from other sources.
This is where SVOD (Netflix, Stan) and TVOD (NBA Pass, Optus Sports, YouTube Premium etc.) services in the top right quadrant offer more choice and control for those who aren’t satisfied by content from our major broadcasters. The most talked about shows like Stranger Things or Making a Murderer are now the ones created by Netflix and Amazon. Also mainstream FTA doesn’t cater enough to our multi-cultural audiences who often subscribe to IPTV services or use media set-up boxes to access content more suited to their cultural tastes. In other countries with large overseas born or multi-lingual populations cable television caters to this need by combining large bouquets of channels at a low enough entry price. This quadrant may not offer advertising opportunities but will continue to pull viewing minutes away from other video platforms.
In the bottom left quadrant the first cluster is a group of platforms trying to create video hubs with the hope that they can create sticky experiences and keep users coming back. The goal is to attract TV dollars, but as always the success of the content will prove the difference. YouTube has a head start and considerable success as it has courted ‘creators’ for many years. Advertisers have been able to use creators to endorse their products, and also buy into the Google Preferred advertising line-ups using TV metrics although brand-safety concerns remain. It remains to be seen if Snap, Instagram and Facebook can attract publishers and creators, and create enough original content to monetize against. Also can they differentiate based on the social viewing experience as Facebook has announced.
Separate to these hubs is the video content we are already used to seeing in social feeds of Facebook, Instagram and Snapchat. The challenge here is that users generally scroll quickly through feeds so the creative needs to be tailored to each platform to get users to pause and view their ads. What works on Facebook news feed may not work on Instagram or Instagram Stories, and brands are at the mercy of ever changing algorithms.
In the last quadrant is YouTube the big daddy of online video. This is where most of us spend our time ‘discovering’ and are in active viewing mode. There are over 400 hours of video uploaded daily, and ‘how-to’ searches are growing 70% on YouTube making it the second largest search engine. These platforms are democratized allowing any user to upload content, which creates scale but also brand safety issues. Amazons Twitch is fairly new to Australian advertisers but offers access to a massive young male audience and also e-sports fanatics.
What does this mean for brands and consumers
Consumers have never had it so good, as they have multiple ways to access and enjoy their favourite content. I don’t think consumers will choose one over the other but we will use platforms as per our needs or simply multi-screen.
For brands the complex landscape will need them to use more sophisticated screen planning tools to ensure optimal reach. Not all platforms will be needed by all brands as each brand will have a different communication objective and customer journey.
However one cannot ignore new platforms if they prove popular so expect more brands to have an always-on video approach and more test and learn activity in the coming year. Creative partners will be expected to have the expertise to plan and deliver video assets across all these multiple platforms and devices.
Finally while everyone is shouting reach numbers the real battle should be for attention and impact on sales as the strength of video is as an impactful story-telling format. Unfortunately these are tougher metrics to measure than click-through rates and completion rates.