The world is constantly changing, and that is a fact. Sooner or later, changes take place and affect our daily lives. If we focus on the business world, those transformations can erase robust enterprises and present an opportunity for unknown companies. Twenty years ago, Blockbuster seemed immortal and no one knew anything about Netflix. Nokia dominated the cellphone industry and Apple was just a computer brand. Those were also the good times for linear television and its advertising business, until everything changed…
The magic box entertained us for decades, but now it has a new challenger when it comes to advertising: The digital world. During the last ten years, the investment in ads on the internet has surpassed television’s, which was traditionally the market leader. In some countries like the UK, this change occurred way back in 2009.
The advertising market is like a blanket on a bed; if we pull it too much to one side, the other side is exposed. If advertisers are doubling their bet on the internet, a drop in TV data seems logical. For example, in Spain, during the first quarter of 2021, Lineal TV advertising revenues dropped 10%, according to the Market and Competence National Commission. According to Zenith, if we cross the Atlantic, the trend is confirmed with a 4% drop in the U.S Market.
If you can’t beat them, join them
However, TV channels are still on their feet (not like Blockbuster) and we continue watching them. We are talking about a 60 billion business in 2020 just in the United States. We’ve witnessed a change in consumers’ habits boosted by technology. We are watching more content than ever, but we do not consume it as we used to. And the major audiovisual groups are aware of this and have adapted.
Most of them offer their programs and shows on their own digital VoD platforms or distribute them through different non-linear channels. Therefore, TV companies opened a new door for advertising, which also has some advantages over the traditional linear TV model.
For example, Digital TV advertising allows customer personalization of the ads thanks to a better segmentation of our viewers. Most of the platforms require user’s authentication that providing data like age, gender or address. With this information, advertisements can be targeted and customized to achieve advertising more suited to consumer tastes.
Furthermore, this advertising format breaks the TV screen and allows an interaction with the consumer that was impossible years ago. Back then, in the halftime of a sports event, a pizza restaurant ad may produce a hunger feeling in the viewer, that may also call to order by telephone. Nowadays, we can introduce a link to the restaurant’s site in the same ad and order a pizza more easily.
Also, the digital advertising data is more accurate than classical TV advertising. With online advertising, we have constantly updated reports with information about the performance of the ads. On the other hand, linear television stills relies on rates data that are not 100% accurate. In this way, any digital audiovisual content with advertising offers reliable data on its impact.
New opportunitites, new challenges
As we saw, many audiovisual enterprises that used to focus on linear television are now combining both advertising formats to support their incomes. Despite the considerable differences between these models, there is a thought that linear and non-linear TVs share with digital platforms and other distribution channels: Advertising is still the king. In the end, a massive part of the profitability of these companies depends on it.
Therefore, it is wise to count on a Broadcast Management System (BMS) like VSNCrea. This system allows media planning and scheduling to get the most of our advertising. Thanks to its renewed commercials module, we can manage Ad Rates for pricing, select seconds of the spot for the pricing, the type of Ad Rate cost (Fixed, Cost Per Mille, Cost Per Rating) and assign prices to blocks in the Ad Rates.
We can quickly check and control all the rates with the new Table View and count with the rest of the functionalities of a complete state-of-the-art BMS like VSNCrea. As Henry David Thoreau said: “Things do not change; we change.”
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