More and more consumers are taking their television time online or to mobile devices, and that is impacting how they engage with advertising in those channels. One expert weighs in on how brands can keep their video ads relevant in this climate.
Kristina: How are streaming solutions like HBO Go and Netflix impacting broadcasters?
Yangbin Wang, CEO of Vobile: While the major studios still control a majority of the broadcast content, they are feeling the pressure of Netflix and Amazon Video which are offering their own original series. This content can bypass the traditional broadcaster completely. For example HBO Go offers an online-only subscription that does not require a traditional cable or satellite TV account. Netflix is diving headfirst into show production by spending money on quality shows that are attracting viewers without the company needing to pay licensing fees.
Kristina: Most streaming services are pay as you go or a combination of 'sponsored by' and pay as you go. What do these options offer advertisers?
Yangbin: Similar to other online channels, these streaming services offer advertisers the power of individual user data. The smartphone or tablet functions as "tracking cookie" which can be leveraged by advertisers to offer more personalized ads that can be informed by the actions of other viewers or the individual user's past behaviors.
Broadcasters on traditional TV will use data from "second screen" activities to better monetize content. Armed with the viewer's contact information and other pertinent data, broadcasters can present targeted ads. This will be especially transformative for the pay-per-transaction (PPT) video industry which will need to complete its shift from DVDs to streaming. Proactive companies will use new technologies such as content identification to increase monetization of this PPT content through relevant ads.
Kristina: Is the current monetization system working for advertisers? What about for content creators? What about for consumers?
Yangbin: Content creators will continue to struggle with new ways for shows to be produced and delivered. Amazon and Netflix are offering their own original series direct to consumers, furthering the fragmentation of the industry. Traditional studios cannot rely on pay-per-view or DVD sales, so they'll need to accept the digitation of content and find ways to leverage their current level of control over its production and distribution. For advertisers, this fragmentation and explosion in distribution channels means they are willing to spend "digital dimes" instead of "analog dollars." Advertisers need compelling arguments from content creators about the effectiveness of digital ads before they increase spending.
Kristina: How must the current system change for brands, content creators and consumers to have a good experience?
Yangbin: Consumers desire a quality streaming experience at a reasonable price point and minimal interruptions. Content creators need to produce shows that are engaging and high quality and backed by data. The advertisers need to leverage that data to offer targeted ads at rates that are high enough to support the content creation. The entire experience will be influenced by second-screen activities, content identification technologies, and real-time tracking of video content.