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14.05.18

The Rise of Connected TV and What It Means for Australian Advertisers

Sally Lawrence, Account Manager, ANZ

A couple of months ago a conversation started in the office about iconic Aussie ads. We spoke about Lube Mobile (that’s 13 13 32), All Bran (tall Jan), Volvo (bloody Volvo driver), Yellow Pages (not happy Jan), and the emotion-driven anthems from Qantas and NRMA. As I started writing this piece I thought: if these ads were released today, and pushed out via online video only, would they have had the same impact? I think we can safely say no. Would the ads be more targeted to their audiences and have reduced waste? Most likely.

Over the last couple of months, connected TV has been a buzz phrase in the industry, and whilst Australians are known for their love affair with traditional broadcast TV (after all, it still reaches 98% of the population), the rise of connected TV has really thrown a spanner in the works for marketers. August of last year, the IAB reported that connected TV accounted for 35% of Australian broadcasters’ online video supply, a percentage that is expected to grow exponentially again this year. So, as we continue to move into a 1:1 marketing world, the question on a lot of marketers’ minds is, “if I can buy connected TV at a cheaper rate while being more targeted, should I be reconsidering my investment in broadcast television?”

“Connected TV accounted for 35% of Australian broadcasters’ online video supply, a percentage that is expected to grow exponentially…”

For me, the issue with asking questions such as this one is, that at the moment, the two mediums play fundamentally different roles. For starters let’s think about the environments in which we consume the two mediums. Free to air TV is generally watched in the comfort of our own homes (usually our lounge rooms), with our friends or our families, or on our own.  We accept ads because they’re expected. Connected TV is completely different. When you’re watching connected TV, you’re watching online video, not what’s traditionally thought of as TV, and you’re more likely to find ads to be disruptive and annoying. Granted, the connected TV space is currently uncrowded relative to other digital mediums. However, if the advertising space expands with increased investments, we are likely to see the rise of ad blocking technology in the connected TV realm. We will end up facing the same issues we are facing today with ad blocking across the desktop web. On top of this, if connected TV ads annoy people, customers won’t be receptive to a marketer’s message.

“Watching free-to-air TV… we accept ads because they’re expected. Connected TV is completely different.”

If you shift budget from broadcast TV into connected TV, can you expect to see the same outcome? No. To have the two mediums reach their maximum potential, they need to work hand in hand. Traditional TV will do its job in reaching as many people as possible at a time when audiences are highly attentive. Connected TV can be used to complement your traditional TV buy as a sequential messenger to your TV ad, to home in on your target segment with unique creative, or as the frequency driving element of your campaign.

My predictions are based on how things currently stand. Will connected TV overtake broadcast in the future? Probably not, because programmatic TV (data-driven automated linear buying), is the next big thing in Australia. Once we sort out a universal measurement system across channels, advertisers will find gold. This is what will essentially revolutionise the industry.