By Robert Hicks, Co-founder and CEO of C-Screens
This April, Netflix announced that it would cease publishing subscriber numbers and focus instead on user engagement metrics; a decision that spooked investors and saw its share price tumble nearly 5%. It comes just a few months after figures from BARB revealed that Netflix trails the BBC and ITV when it comes to viewing figures, and its output rarely makes a dent on its weekly list of the top 50 most-watched shows.
However, while Netflix is currently in the headlines, its travails reflect a much broader picture, and one that affects broadcast TV and on-demand/CTV services alike: consumer habits are changing and making it far harder for advertisers to understand where best to spend their precious budgets.
The impact of changing consumer behaviour
This is essentially a story of fragmentation. There are simply too many TV services competing for viewers and this is having a significant impact on ratings. Broadcast TV is experiencing significant declines in weekly viewers. For instance, between 2014 and 2023, the number of TV programmes pulling in over four million viewers has halved. This downward trend has slowed a little, but commercial TV viewing was nevertheless 1.7% lower in 2023 than in 2022.
Many of these viewers are moving to SVOD, BVOD, and CTV. Last year, for instance, BVOD saw 23% growth, largely on the back of ITVX. SVOD is having a slightly tougher time of things, with subscriber levels flat or shrinking. According to recent ScreenThink research from MTM, for example, Netflix and Amazon Prime both experienced a 6% drop in user numbers between Q2 2022 and Q4 2023, with users citing cost and content wearout as the key reasons for leaving.
As consumers’ TV viewing habits continue to transform, advertisers are coming up against a range of other challenges. These include the ease with which viewers can skip ads on platforms like YouTube and Sky, brand safety challenges (making sure that ads do not appear next to unsuitable or undesirable content), and relevancy issues (guaranteeing that ads are served to the right audiences, at the time time, and in the right place, which is near-impossible in such a fragmented ecosystem). The list goes on.
Can TVOOH save the day?
Fortunately, a relatively new TV medium has emerged that addresses all these challenges, providing a way for advertisers to maximise their reach cost effectively. TV Out of Home (TVOOH) is a service that enables the viewing of live, playback, and on-demand TV content in high-dwell-time environments outside of the traditional home setting. This is achieved by placing screens in locations like shopping centres, pubs, hotels, airports, and gyms, where people watch TV as part of the broader environment. Unlike traditional out-of-home advertising like billboards and digital signage, TVOOH also includes audio, making for a more dynamic and engaging experience and potentially increasing the impact and memorability of the advertising.
As these screens are in contextually relevant locations, advertisers can engage consumers with premium content knowing that the message is time relevant and will be well received – such as providing Fashion TV content at retail locations, or traffic and travel content at motorway service stations. This hyper-relevance means that advertisers can be assured that they are reaching the right audiences at scale and are doing so in 100% brand-safe environments. TVOOH is therefore like linear broadcast TV when it is at its best: mass scale, non-skippable, targetted, and safe.
Embedding transparency and accountability in TVOOH
However, for TVOOH to live up to its promise, transparency and accountability are key. Advertisers need an alternative to the opaque world of on-demand, one that is as rigorous around impacts and ratings as linear broadcast.
At present, the TVOOH market is not regulated, so the companies in the sector must chart their own course. That means holding TVOOH businesses up to the most rigorous and transparent standards. It is for this reason that C-Screens engaged RSMB, the auditor that informs BARB’s ratings, to audit our own reach and impacts. By seeking robust third-party accreditation in this way, TVOOH providers can put their services on a par with the planning, execution, and measurement capabilities of linear TV, helping create consistency, trust and accountability for advertisers.
This of course requires a solid data foundation. Here, the best TVOOH propositions are as data rich as any linear TV alternative. A broad variety of sources such as first-party data from landowners and telco subscriber data are readily available and can be augmented with proprietary measuring devices and addressable audience data from QR-promos run over the out-of-home screens. With this data foundation in place, TVOOH can uncover precise and granular information on viewers – a goldmine for advertisers.
There’s no getting away from the fact that technological changes and shifting consumer habits are disrupting the TV advertising industry. The good news is that alternatives like TVOOH mean that these changes are not all negative for advertisers. By leveraging transparent and accountable TVOOH offerings that are underpinned by robust reporting and measurement, advertisers can reach their ideal audiences in new and exciting ways, and at the scale required.
