TV is in decline, but it is still perceived as an effective medium; addressable TV remains a promise; the TV industry looks likely to consolidate. Here’s what you need to know.

Over the past year the state of video, according to GroupM’s State of Video 2018 report, has seen little material change, but the reasons and means of that change are becoming clearer.

There is still a place for the big screen

“The young may yet return to the main screen. They are already saturated with smartphones, and screen size is a binding constraint. Big screens encourage viewing, particularly for SVOD, YouTube and sports.”

Addressable TV lacks reach

And therefore commercial potency, the report states. Historically, the format was constrained by the limited number of set top boxes or smart devices, and though these are now the dominant new type of device, “the binding growth constraint remains the proportion of total impressions that may be addressed”. However, the prospect of mergers (AT&T and Time Warner, for instance) may be a catalyst.

And TV is still about reach

“Data adornments are welcome only if they make that reach more intelligent and more intimate, expanding television’s relationship to sales and downstream financial and performance metrics, as any advertiser on earth would hope to achieve.” Given it is the “greatest weapon in our arsenal”, the medium must prioritise new currencies, data pipelines, and planning/measurement frameworks that add activation inputs as an enhancement of a strategy.

Ads are getting shorter, but that’s a good thing

The US, notorious for its heavy ad load, is seeing reduction, especially in the number of 30-second ads. According to a Nielsen Consumer Neuroscience study, which analysed 80 US campaigns and found that 15-second ads outperform their longer cousins across a number of metrics: action intent, effectiveness, emotion, and memory.

Ultimately, TV will stand still, despite effectiveness

“Even while its audience shrinks, ages and atomizes, TV remains outstandingly safe and effective. But this is evidently enough only to sustain present levels of TV investment, at best. It is hard to imagine how TV will ever grow its share of advertising investment again.”

 Around the world, a few things are certain:

  • Linear viewing of ad-supported TV is not going to grow.
  • The economics of ad-funded OTT are questionable.
  • Subscription fatigue is inevitable.
  • Advertisers will get used to making video that is relevant to the user and the platform use case. This is essential if they are to benefit from a data-rich, multi-platform world.
  • It is only going to get harder to get audiences to sit through interruptive ads.

Sourced from GroupM; additional content by WARC staff