Back to results Television 2.0 The television landscape has changed significantly, but Simon Hendery discovers those in the business are putting on a brave face and scoping new revenue opportunities as our viewing habits evolve. By Simon Hendery After finally securing deals with Warner and Disney that had been a long time in the making, TVNZ last month quietly began providing the global distributors’ content via its “ondemand” internet service. Despite a soft launch of the new programming offer, traffic to TVNZ’s online catch-up viewing portal leapt 30% during the first week the new content was available. Word quickly got around, and Kiwi TV watchers are clearly happy to get their viewing fix via a computer monitor or laptop screen if there’s a good selection of material to see. It shows there’s still plenty of life in the television medium, even if the way we receive it may be changing. And the good news for TVNZ is that there’s revenue to be made through the new service. Each online viewing it serves up is preceded by an ad screening, and the broadcaster’s ondemand inventory is fully booked at present. The past decade has been a challenging one for television. According to figures compiled by the Advertising Standards Authority, television’s share of total ad spend dropped from 35.4% in 1998 to 28% last year. The latest figures from the Television Broadcasters’ Council show that TV ads generated $164.4 million during the three months to June 30 this year, a 3.7% increase on the same quarter in 2007. TBC chief executive Justine Wilkinson described that level of spending as an “outstanding” result given the current economic climate, saying it “reinforces the importance that advertisers place on using television when times are tough”. But given the global economic maelstrom, should broadcasters be worried that ad budgets are about to wither? When TVNZ chief executive Rick Ellis announced the company’s annual results last month he said: “While the economic outlook for the 2009 financial year is challenging for many New Zealand businesses we are cautiously optimistic about the environment and confident in our abilities and plans.” M&C Saatchi boss Nick Baylis shares Ellis’ optimism, although he worries the tightening economic situation is having an impact on the quality of TVCs now appearing on our screens. “I think television’s far too entrenched and far too big a machine to ever really lose out that much,” Baylis says. “Sales of television sets is a fairly good indication and the upgrading of that technology in-home means in people’s minds television is still central to the house and to their lives. If we were all running away from TV you would not see this boom in high-tech flat-screen televisions that’s going on. It’s still a very prized possession and people want to engage with it,” he says. “What we’re seeing is, yes, people still desperately want to be on television but they also genuinely want to spend less money on production which personally I think is a big issue. “That’s the area where we need to redress the balance a little bit because we’re seeing a drop in quality of message. “When you’ve got fragmenting audiences your message quality needs to go up, not down. What’s tending to happen is people are saying I’ll spend less on production so I can spend more on media, which a lot of the time compromises the idea and I think that’s where you’ve got a problem.” While there may be a perception that fragmentation is being fuelled by young people turning their backs on TV in favour of new media, the findings of a recent study commissioned by MTV tell a different story. The global survey of under-25-year-olds, which included a sampling of young New Zealanders, found watching TV remains one of their most favourite and most common activities. “Linear TV is the medium for introducing people to new things they weren’t searching for in the first place,” was one of the takeouts from the study. “Linear media has the power to introduce people to content they weren’t looking for in the first place … The online generation relies heavily on linear media to hear about new brands.” And, the report concluded: “Digital communications such as IM [instant messaging], email, social networking sites and mobile/sms are complementary to, not competitive with, TV. TV is part of young people’s digital conversation.” This type of finding is one reason MTV Digital recently ramped up its marketing efforts in the NZ market with the aim of linking its various TV offerings and online portals. “There is a real opportunity for marketers to extend their advertising beyond television across the other technologies kids are engaged with, including IM and social networking sites,” says the company’s NZ sales manager, Matt Headland. “Especially since 53% of NZ kids and 48% of NZ young people IM each other about ‘what is on TV right now’.” TVNZ’s head of advertising sales, Dave Walker, says the broadcaster remains very upbeat about TV as a medium and with TVCs as an effective tool for advertisers. “[Ad revenue] dollars are up, support from advertisers remains strong, we’re innovating our offering by offering integrated sponsorships.” He says TVNZ is also “innovating the offering”, giving advertisers opportunities in the online environment as well. “While we’re firm believers in the power of television to drive brands, we’re also not burying our head in the sand, we do know people go and watch their content in different places as well – they’re getting news from TVNZ.co.nz, they’re watching catch-up TV on TVNZ ondemand and we’re offering advertising opportunities with that content as well. So if you’re watching Shortland Street on your PC at work during the day then you’re going to be seeing an ad as well. It’s just another opportunity for our advertisers to reach consumers.” He says TVNZ’s online ad revenue is tracking at 100% growth year-on-year. Meanwhile the broadcaster’s head of marketing and emerging business, Jason Paris, says the move online is about offering viewers content in the various formats they are wanting to receive it. “Advertisers want to be where the consumers are so we need to make sure our content is where the consumers are.” During the two weeks of this year’s Olympics, 1.5 million New Zealanders visited the TVNZ website where they watched 360,000 hours of live streaming video content. At the same time TVNZ had record ratings share on TV One, and Paris says this proves that rather than taking share away from TV One, the broadcaster’s online approach is complementary, meaning the initiative is effectively growing the overall audience. Samson Yau of niche broadcaster World TV sees both positives and negatives in the changing television environment. On the negative side, there is more competition and advertisers want better quality TV productions, but without increasing budgets, he says. But on the positive side, because World TV is a niche media targeting the affluent local Asian market, it provides an appealing audience for advertisers now that economic conditions have tightened. “Many clients from the mainstream community are exploring the opportunity of advertising on our channels as we are still comparatively inexpensive compared to the mainstream media,” he adds. Product placement is also generating growing interest as a means of leveraging TVC investment, says Kim Ellett at Exposure Product Placement. He says recent US research shows product placement delivers almost as well as a TVC in terms of brand recognition, but when placement and TVCs are combined on the same show, that recognition is raised significantly. There are secrets to doing product placement effectively, however. “What was a difficult thing in the past was that the networks often weren’t aware of what was happening [in terms of the placement deals being put together] so when placement turned up on their screen they were amazed that there was this product there that they weren’t aware of,” he says. “We’re network endorsed so that when we organise the product placement contract we will have an agreement with the network so that they know what we’re doing and that way there are no surprises when it comes on air.” © Copyright AdMedia magazine October 2008 All material appearing is copyright and cannot be reproduced without prior permission of the publisher. Please contact the copyright officer: Ph 0-9-845 5114, Email copyright@mediaweb.co.nz.	Username Password Keep me logged in on this computer Forgotten your password? Enter your email address and we will email your password to you:

Television 2.0

The television landscape has changed significantly, but Simon Hendery discovers those in the business are putting on a brave face and scoping new revenue opportunities as our viewing habits evolve.

By Simon Hendery

After finally securing deals with Warner and Disney that had been a long time in the making, TVNZ last month quietly began providing the global distributors’ content via its “ondemand” internet service.
Despite a soft launch of the new programming offer, traffic to TVNZ’s online catch-up viewing portal leapt 30% during the first week the new content was available. Word quickly got around, and Kiwi TV watchers are clearly happy to get their viewing fix via a computer monitor or laptop screen if there’s a good selection of material to see.
It shows there’s still plenty of life in the television medium, even if the way we receive it may be changing. And the good news for TVNZ is that there’s revenue to be made through the new service. Each online viewing it serves up is preceded by an ad screening, and the broadcaster’s ondemand inventory is fully booked at present.
The past decade has been a challenging one for television. According to figures compiled by the Advertising Standards Authority, television’s share of total ad spend dropped from 35.4% in 1998 to 28% last year.
The latest figures from the Television Broadcasters’ Council show that TV ads generated $164.4 million during the three months to June 30 this year, a 3.7% increase on the same quarter in 2007.
TBC chief executive Justine Wilkinson described that level of spending as an “outstanding” result given the current economic climate, saying it “reinforces the importance that advertisers place on using television when times are tough”.
But given the global economic maelstrom, should broadcasters be worried that ad budgets are about to wither?
When TVNZ chief executive Rick Ellis announced the company’s annual results last month he said: “While the economic outlook for the 2009 financial year is challenging for many New Zealand businesses we are cautiously optimistic about the environment and confident in our abilities and plans.”
M&C Saatchi boss Nick Baylis shares Ellis’ optimism, although he worries the tightening economic situation is having an impact on the quality of TVCs now appearing on our screens.
“I think television’s far too entrenched and far too big a machine to ever really lose out that much,” Baylis says.
“Sales of television sets is a fairly good indication and the upgrading of that technology in-home means in people’s minds television is still central to the house and to their lives. If we were all running away from TV you would not see this boom in high-tech flat-screen televisions that’s going on. It’s still a very prized possession and people want to engage with it,” he says.
“What we’re seeing is, yes, people still desperately want to be on television but they also genuinely want to spend less money on production which personally I think is a big issue.
“That’s the area where we need to redress the balance a little bit because we’re seeing a drop in quality of message.
“When you’ve got fragmenting audiences your message quality needs to go up, not down. What’s tending to happen is people are saying I’ll spend less on production so I can spend more on media, which a lot of the time compromises the idea and I think that’s where you’ve got a problem.”
While there may be a perception that fragmentation is being fuelled by young people turning their backs on TV in favour of new media, the findings of a recent study commissioned by MTV tell a different story.
The global survey of under-25-year-olds, which included a sampling of young New Zealanders, found watching TV remains one of their most favourite and most common activities.
“Linear TV is the medium for introducing people to new things they weren’t searching for in the first place,” was one of the takeouts from the study.
“Linear media has the power to introduce people to content they weren’t looking for in the first place … The online generation relies heavily on linear media to hear about new brands.”
And, the report concluded: “Digital communications such as IM [instant messaging], email, social networking sites and mobile/sms are complementary to, not competitive with, TV. TV is part of young people’s digital conversation.”
This type of finding is one reason MTV Digital recently ramped up its marketing efforts in the NZ market with the aim of linking its various TV offerings and online portals. “There is a real opportunity for marketers to extend their advertising beyond television across the other technologies kids are engaged with, including IM and social networking sites,” says the company’s NZ sales manager, Matt Headland.
“Especially since 53% of NZ kids and 48% of NZ young people IM each other about ‘what is on TV right now’.”
TVNZ’s head of advertising sales, Dave Walker, says the broadcaster remains very upbeat about TV as a medium and with TVCs as an effective tool for advertisers. “[Ad revenue] dollars are up, support from advertisers remains strong, we’re innovating our offering by offering integrated sponsorships.”
He says TVNZ is also “innovating the offering”, giving advertisers opportunities in the online environment as well.
“While we’re firm believers in the power of television to drive brands, we’re also not burying our head in the sand, we do know people go and watch their content in different places as well – they’re getting news from TVNZ.co.nz, they’re watching catch-up TV on TVNZ ondemand and we’re offering advertising opportunities with that content as well. So if you’re watching Shortland Street on your PC at work during the day then you’re going to be seeing an ad as well. It’s just another opportunity for our advertisers to reach consumers.”
He says TVNZ’s online ad revenue is tracking at 100% growth year-on-year.
Meanwhile the broadcaster’s head of marketing and emerging business, Jason Paris, says the move online is about offering viewers content in the various formats they are wanting to receive it. “Advertisers want to be where the consumers are so we need to make sure our content is where the consumers are.”
During the two weeks of this year’s Olympics, 1.5 million New Zealanders visited the TVNZ website where they watched 360,000 hours of live streaming video content.
At the same time TVNZ had record ratings share on TV One, and Paris says this proves that rather than taking share away from TV One, the broadcaster’s online approach is complementary, meaning the initiative is effectively growing the overall audience.
Samson Yau of niche broadcaster World TV sees both positives and negatives in the changing television environment.
On the negative side, there is more competition and advertisers want better quality TV productions, but without increasing budgets, he says.
But on the positive side, because World TV is a niche media targeting the affluent local Asian market, it provides an appealing audience for advertisers now that economic conditions have tightened.
“Many clients from the mainstream community are exploring the opportunity of advertising on our channels as we are still comparatively inexpensive compared to the mainstream media,” he adds.
Product placement is also generating growing interest as a means of leveraging TVC investment, says Kim Ellett at Exposure Product Placement.
He says recent US research shows product placement delivers almost as well as a TVC in terms of brand recognition, but when placement and TVCs are combined on the same show, that recognition is raised significantly.
There are secrets to doing product placement effectively, however. “What was a difficult thing in the past was that the networks often weren’t aware of what was happening [in terms of the placement deals being put together] so when placement turned up on their screen they were amazed that there was this product there that they weren’t aware of,” he says.
“We’re network endorsed so that when we organise the product placement contract we will have an agreement with the network so that they know what we’re doing and that way there are no surprises when it comes on air.”

© Copyright AdMedia magazine October 2008

All material appearing is copyright and cannot be reproduced without prior permission of the publisher.

Please contact the copyright officer: Ph 0-9-845 5114, Email copyright@mediaweb.co.nz.

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Television 2.0

The television landscape has changed significantly, but Simon Hendery discovers those in the business are putting on a brave face and scoping new revenue opportunities as our viewing habits evolve.