In an era when consumers can get the content they want from broadcasters, from online content aggregators like Netflix and Amazon, direct from production companies, from new entrants with the muscle to change the market (like Apple) and, frankly, from various degrees of piracy, everyone is looking to maintain revenues to survive.

The general agreement is that the old way is the best: content is king. “There is clearly a lot of value in high-quality content,” said Matthew Bloxham, senior analyst at Bloomberg Intelligence. “So, you have to spend more on it.”

The first television drama to command a budget of $1 million an episode was Hill Street Blues in 1986. Given the rate of inflation since then, premium productions should be costing around $2.25 million an hour. But popular programmes like Game of Thrones have production budgets around $12 million; period dramas like The Crown $10 million.

Where are these budgets going to come from? Advertising may no longer be the only source, but it is still very important indeed. So, you have to find new and exciting ways to attract the advertising dollar.

One way is to simply make advertising more personal. All the research shows that if a commercial is relevant to the consumer they will tolerate it rather than skip over it. So only show them commercials which are relevant.

Dynamic ad insertion is now well established; this is where commercials are inserted into a stream at the moment of delivery, and as such allows each stream to carry a different mix of commercials. Online delivery businesses claim this as an advantage, saying that it is possible to target down to the individual.

It may be possible, but I have no evidence of it being done by anyone just yet. There is enough controversy about data harvesting in general at the moment, that there is unlikely to be much public appetite for something quite so tailored. Focused demographics seems to be the way to go.

Broadcasters are keeping up with this trend with addressable and programmatic advertising, an approach that now powers much of web and in-app advertising, and which allows them to show different commercials to different households within the same programme. As well as retaining audience attention, it also allows smaller brands to use television because they can expect to pay less for part of the audience.

But why not go further? Contextual advertising for instance, to target commercial content and sponsorship according to the nature of the programme itself or specific elements of its content. What if some machine learning system was watching the content and choosing the commercial messages appropriately?

Say you are watching a football match between Liverpool and Arsenal. The sponsorship break bumpers could have generic content, with live and interactive secondary event overlays appealing to the two fan bases dependent on the state of the game. “2 – 0 up so time for another beer” for fans of the team leading at half time, for instance; “Only two down so have another beer and keep cheering the lads on” for the losing team.

Or, maybe a particular brand of car is used regularly in a drama and an ad for that manufacturer might occasionally be overlaid in relevant scenes.

More creative minds than mine will come up with better examples, and the technology to do it is out there. Systems that will semi-automatically find a contextually correct moment for a particular ad to be overlaid are already in the marketplace. The point is to think beyond interactive advertising as the ability to click on a daytime host’s dress and find out where to buy it.

Obviously there needs to be certain rules around such placements or suggestions, like don’t place an ad over someone’s face or don’t show text in an ad when there is text already on the screen. But, so far feedback seems to indicate that audiences respond well when ads are contextually appropriate or expand on the primary TV content somehow.

For the advertisers, overlay or secondary event ads should be a highly attractive proposition as they cannot be skipped using fast-forward like conventional commercial breaks can be. This also means they offer a very real opportunity to help monetize TV content viewed on other platforms such as computers and mobile devices.

Today’s electronic media technology can respond instantly, so use it to create new revenue streams. That way we all get to enjoy great content.


Martin Long

Operations Director, MSA Focus



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