The broadcast industry is transforming, with cross-platform automation and tech advances driving platform convergence and data-driven innovation. At the same time, there is a focus on reinvigorating shifting audiences and reaching viewers in the ways they want to be reached. Following Ooyala's recently published 'State of the Broadcast Industry 2016' report, Paula Minardi (pictured below), broadcast industry marketing manager, Ooyala, speaks with ExchangeWire about some top ad industry trends and innovations to look for in broadcasting this year.

Ratings conversation changes

Viewers are continuing to drift from linear TV to digital platforms. This is resulting in TV ratings nose-diving, led by networks focused on millennials; indeed, only 30% of millennial viewing time is spent watching live TV. Ad dollars will continue to follow audiences; in fact, UK mobile ad spend will surpass both TV and print spend in 2016. Audiences have historically been hard to measure away from TV, but the arrival of cross-platform ratings, like comScore’s Xmedia and Nielsen’s Total Audience Measurement, is starting to answer the industry’s cries for help.

Current measurements suggest that viewers have stopped watching TV content; but, in reality, they’re just watching it somewhere (and sometime) else. Fox has decreed that overnight ratings are obsolete, particularly for their millennial audience, because OTT viewers are happy to watch shows two days, or even two years, after their original air date. Expect to see ad money keep moving to over-the-top video, TV Everywhere platforms, and connected TV devices, in response. Also, look for cross-screen attribution to become the next mile-marker on the journey towards full audience tracking.

Companies like Time Warner and Viacom are also trying to change the ratings conversation by moving away from Nielsen ratings-based guarantees that often miss viewers, and instead, are focusing more on interactions or purchase-habit impact. In addition, networks are increasingly focused on better targeting through data to help advertisers (and themselves) make smarter decisions. Back in 2014, Sky Media was the first in the UK to try targeted ads via its set-top box (STB) data and, going forward, companies like Cablevision and Comcast are also interested in selling STB viewer data to networks. Look for data to be the vehicle that drives ad transactions going forward, particularly as the industry moves closer to true programmatic TV.

Programmatic pushes alignment

Besides aiming for better ratings and targeting platforms, companies are turning to programmatic advertising to make full use of their full digital and linear video portfolios. An Unruly Programmatic Video Pulse Survey revealed, of 500 UK marketers surveyed, 17% said between 41% and 60% of their TV budget was now on programmatic video. In the US, 70% of advertisers have moved at least some of their TV budgets to programmatic video, driven by the need for more precise audience targeting. And, according to eMarketer’s latest forecast, programmatic will account for 65% of total online video ad spend by 2017.

The industry is truly waking up to the opportunities and efficiencies of programmatic trading. It can link inventory, data, and audiences across video offerings. Both old- and new-guard companies are getting into the game: Hulu, for example, is offering programmatic for its premium video inventory, and Dish is using a programmatic TV platform for addressable TV ads. Fraud and viewability are problems for digital video, but increases in premium inventory and better metrics will help address those issues. Look for more consolidation in the advertising industry in response to all of this convergence. 

Private programmatic marketplaces (PMPs), like Aunia for broadcasters in Spain, are also on the rise. Ooyala recently reported that in Q3 2015, the number of overall deals made using private programmatic more than doubled, at a quarter-on-quarter rate of 103%. With the benefits PMPs offer in increased inventory controls and revenue, and with advances like header bidding, look for open auctions to decrease in use over time.

Challenges remain for the rollout of programmatic TV, specifically regarding the standardisation and full automation needed for more active buy-in from all participants. Those will continue to improve as audience-first approaches gain favour. Look for 2016 anchor events, like the European Championships and the Summer Olympics, to be catalysts that drive more rapid experimentation and adoption in the space. Better forecasting tools and more personalised ads tailored to screens, as with dynamic ad insertion, will become key differentiators and revenue-drivers for companies who make those smart investments in the coming year.

Expect to see mobile become a programmatic driver going forward, as ad buys catch up to viewers. This will be particularly true in emerging regions. Also, look for more personalised ads, customised for a small screen experience, as marketers and broadcasters try harder to reach audiences who want to avoid them.

Ad-avoidance rebellion grows

Ad avoidance is a key challenge for content providers today. More audiences (especially millennials) are blocking ads, skipping them, or simply opting for ad-free OTT environments. Consumers often pay little attention to the implicit value exchange that requires them to pay for content with their time or their money to keep the entire ecosystem in balance. Networks like TruTV have been chopping linear TV ad time to appeal to millennials who have moved to services like Netflix (still ad-free) or the higher priced, NowTV. Products like Tivo’s ad-skipping DVR aren’t helping matters, either. And the issue is global: In Australia, viewers are bothered by catch-up TV ads that they don’t have to endure on SVOD.

Online broadcasters aren’t having an easy time of it either. Consumers accustomed to skipping ads on their DVRs are now using ad blockers to do the same online. Ad blocking is still highest in Europe, according to eMarketer, and has grown into a huge global problem, driven by millennials – and in some ways, by the industry itself. In fact, the global cost of ad-blocking is estimated to reach USD$41bn (£28.7bn) in 2016. A recent study also noted that over 60% of online viewers would be more agreeable to advertising if they could have control over the ads they see; and over 40% responded favourably to personalised ads. The same study showed that nearly 50% of mobile users dislike ads in video content.

It’s no wonder then that mobile users are excited about mobile ad blocking via Apple’s iOS 9. This is particularly significant for American audiences, where the 2016 elections will be influenced in part by whether target audiences even see campaign ads, particularly digital and mobile ones. In response, look for smarter ad blocking technology unlocking ad inventory, more targeted interactive ad creative and compelling website environments, deeper personalisation of ads based on screen types, and hybrid monetisation models. All will help address these issues and improve communication with audiences, as the industry works toward improving the ad and content experience for all.

The takeaway from all of this activity: The advertising industry is finally beginning to realise its dream of finding consumers efficiently across the video universe. Expect to see rapid ad tech advances and new formats drive even deeper value and innovation in the coming year, as companies test them out during the major events of 2016.