At the same time we are being overwhelmed with the avalanche of streaming offerings, little is being said of the ability of Australia's internet to cope with the amount of data required for all the predicted streaming.
Akamai's State of the Internet Report is not comfortable reading. So why is Australia is becoming a digital backwater? With internet speeds ranked 44th in the world, studies cite the direction of the nbn as part of the problem (as reported by the ABC).
Reading Australia doesn't even have connection speeds above the average 10 Mbps 'high broadband' threshold is depressing, but to learn we are ranked behind New Zealand should surely spark the competitive nature in us to at least try and challenge our cross-Tasman rivals.
What makes a great ad?
According to AdAge's Top Ad Campaigns of the 21st Century ads which change the way consumers think about the world and those built on strong marketing foundations using accurate and relevant insights and then artfully executed are some of the most awarded.
In his post summarising the Best Ads of the 21st Century, David Aaker speaks of the best ads being those that 'broke through the clutter with inspired strategy and execution'. Assessment of AdAge's top ads were based on 3 criteria: 1) Was it a watershed ad or campaign, discernibly changing the culture of advertising or the popular culture as a whole? 2) If it itself was credited with creating a category, or if by its efforts a brand became entrenched in its category as No. 1, or 3) Was it just simply unforgettable?
All too often the campaign and creative development process focuses on making an ad 'viral' - good ads are fervently shared but not necessarily because socialisation was the core objective and specifically directed in a manner to achieve this. A campaign's ability to go viral may well be part of a good strategy, but ads are more freely and rapidly shared when they resonate; when a brand 'connects' with its audience, generally through emotion or humour. As Aaker further points out, "humour attracts attention, aids memory and detracts from competitive counter-arguing." It's easy to argue some of these ads absolutely had viral at the heart of their campaign vision, though it's important to recognise that for every brilliant ad, which succeeds socially, there are countless failures that have overcapitalised in the viral stakes we never hear about.
If an ad fails to connect, cannot deliver a message succinctly and efficiently, confuses, or is either not memorable or doesn't illicit a call to action, it fails.
Here are my favourite 3 ads. The reasons they work are simple; target audience resonance, use of a human connector (humour or emotion) and/or the utilisation of a novel, pin-point insight.
1. Apple: PC v Mac. Everyone loves the underdog, right? The Apple v PC ads deliver the computing world's version of David and Goliath in a cheeky and non-aggressive way all the while highlighting the dominant capabilities of the Mac. It's a clever slant on delivering a message on product benefits.
2. Metro Trains: Dumb Ways to Die, whilst was highly successful from a viral perspective, it was also a game-changer when it comes to public service announcements. A memorable, out-of-the-box strategy and execution that redefined the category. Warning: you won't get the tune out of your head for a couple of days.
3. P&G: Thank You, Mom tops the charts in the emotional stakes for those in its core demo. You'd be hard pressed to find a mum who this doesn't resonant with. Get your tissues out before you press play!
Oh, and a honourable mention to these guys. (Disclaimer: Meerkats fascinate me. I think because they look curious, naturally, so this was immediately on my radar). The ad focuses on the potential confusion of the brand name with something utterly ridiculous and armed with an obtuse choice of 'talent' (including an over-the-top accent) it seems to enhance audience recall of the brand. The humour works (from a brand awareness point of view), at least for this sample of one. Simples!
Do you have a favourite?
It would be an understatement to suggest 2015 will be the year for streaming.
Late 2014 saw a flurry of partnerships and launch announcements (Seven and Foxtel to join forces in a 50:50 JV to deliver Presto and Nine confirmed Fairfax as partner for 'Stan') and just this week Netflix (after announcing it's AU plans late last year) has commenced it's 2015 assault on the market with trials to block some Australian VPN users.
Prepare yourselves for the onslaught of content deal announcements in the first quarter: The first of many this week - "Stan signs Amazon Prime shows, announces pricing and kicks off pre-launch campaign".
One thing is for sure - there will be more choice and more freedom to choose (as very well articulated by Chris Stephenson). The growth in SVOD will spur the delivery of more diversified content and ensure it is more evenly distributed than ever before with consumers at the helm of choice (and device). Streaming is undoubtedly the future of how Australians will consume content.
Streaming is the future of content - internet TV will replace linear TV. CEO of Netflix, Reed Hastings predicts the demise of broadcast TV by 2030. Undoubtedly, TV audiences are ageing and 16 years will see us move through another generation of viewers. There may potentially still be those in older segments clinging to traditional viewing but largely, the market will have transitioned away from traditional TV.
I don't see the future of TV devoid of advertising. Early proclamations of ad-free options are a lure to gain adequate audience numbers early.
With the advent of greater consumer choice comes greater media fragmentation making media buying even more challenging. Streaming does however, present the opportunity for advertisers to achieve placement in content rich and contextually relevant environments. More importantly, operating as a subscription service, the data enables greater personalisation, validation and retargeting opportunities. The pressure and ability to resist the opportunity might prove too great and ads within SVOD (or tiered subscriptions with lower tiers delivering ads) are an inevitable outcome.
Netflix while currently ad-free is said to have signed 'commitments' to Google Partner Select (a programmatic video ad marketplace) and while Stan (currently) promotes its platform as 'ad-free'. As consumers, let's rejoice and take advantage of the short-term ad-free commitments while they last but as advertisers and planners, rally the (strategy) troops for when the flood gates open.
Of the potential of streaming in the market, there has clearly been consideration in numerous boardrooms for the size of the prize. Whilst there are already seeing large consumer segments shifting significant portions of their viewing to SVOD and many players scrambling to get a slice of the action investing huge swathes to stake their claim there are not many public proclamations of market potent. Early estimates from Nine assume that 40% of Australians will be streaming within 4 years. That would be approximately 10.2 million Australians based on population growth estimates or 4.031 million households (at current estimates of 2.53 people per household and assuming they mean all people).
It's important to note that 83% of Americans claim to be currently streaming movie and TV content at home, Netflix enjoys reach to almost 12% of total Americans and significantly 2 in 3 prefer to stream with commercials than pay a monthly subscription to stream without commercials.
Nine/Fairfax, Seven/Foxtel, Netflix and Quickflix have all been vocal in their offerings and each will come out aggressively. We've yet to see the full extent of Telstra's plans, and we've not yet heard from Apple and Google (or Android TV - fully launched this week) or even contemplated the possibilities from Amazon or tie ups with TV manufacturers. (Check out some of the players here).
But buying content is not a cheap business. Nine and Fairfax announced a JV backed by a $100 million investment, Foxtel and Seven have combined their pennies and most notably Netflix recently paid $90 million for the first season or 10 episodes of the original Marco Polo. Netflix clearly benefits from global rights deals and currently pays less than local players so the current lower cost of content and the production of epic originals can be shared across multiple geographic markets. Local players will have domestic volume advantages when negotiating rights, but I'm not sure any party can accurately put a figure on or a fully prepared for the looming increases in the cost of content rights.
For mine, the AU market is too busy and it's unlikely all players will be able to sustain the high cost of content over the long haul. There will be success stories, there will be losers and for some, there may be small wins but without the breadth and depth/quality and the quantity of content required to draw significant enough numbers to put a double digit dent in market share. Profitability from subscriptions alone then comes into question and therefore the proposition of ad-supporting becomes more attractive.
Here are my (brave and potentially embarrassing if wrong) predictions of what I think will play out:
1. Quickflix and EasyFlix are acquisition targets. If they can't hang on for the near there years it will take for them to benefit from streaming becoming mainstream they will need to succumb, focus on niche content to keep content costs low or incorporate another revenue (advertising) stream. Their catalogue offerings will not draw adequate audiences needed to fund the bigger content plays in the short to mid-term.
2. There will be a direct impact on the traditional TV market. As Google and Apple become more active they won't play to the same conventions as local operators will aim to dictate. TV will be online - we're not talking catch-up but new, original content which shakes-up traditional program schedules (what consumers want, when they want it). Just this week at CES, US satellite operator, Dish announced Sling - its online television service. It almost certainly will be a very delicate dance for FTA and Pay TV owners to ensure they maintain the traditional TV fortress for long enough to transition adequate audiences to SVOD without impacting current TV revenue. Once the numbers arrive at SVOD offerings and presumably some are lost to FTA and Pay TV where does the (traditional) TV ad revenue go? It's not a hard sell to suggest a product which is a blend of traditional TV and catch up shouldn't have ads - viewers are already well acquainted with ads in both TV and catch-up environments. Ads here are a given and so is the power of dynamic ad insertion and programmatic.
3. The last bastion for streaming to conquer will be live sports. A mass exodus from live TV for viewing of live sports is unlikely and not imminent in Australia. Networks control TV production; an expensive investment and TV viewing of sport is currently the preferred method of consumption Clearly though there are portions who are transitioning to other devices (think Cricket Australia Live and NRL Digital Pass). Control by the rights holders (like Cricket Australia and NRL Digital Pass) will see the networks relinquished to content distributors of sport only. I'm not convinced that's the preferred option (for networks) if we see a future where all content is streamed. If live sport is integrated into the streaming offerings of networks, ads are inevitable, just like on traditional TV.
Sponsors won't want to relinquish their presence in these sports especially if the streaming platform draws adequate numbers, so at the very least native advertising will be an easy obvious solution. But imagine the advances in on-screen interactive ads, augmented reality and click-to-buy in real-time within the next 1-2 years. Might they be too tempting? A three-way play from Telstra, Foxtel and Seven offering TV coverage/production, streaming platform and data access bundles could be formidable.
4. Accurate (and independent) measurement and validation of audience numbers across platforms (including mobile!) will be mandated as advertising becomes incorporated. This requires a step-change in current solutions and thinking - solutions which compliment and add to current measurement. It most definitely is not a digital replica of TV measurement and nor is it a panel only solution. The gate is wide open for some very creative solutions and partnerships.
Hang on to your hats - we're in for one hell of a ride.
More launch activity with the announcement of Presto Entertainment - the joint venture between Foxtel and Seven West.
I confess to sometimes pouring (mostly private) scorn on banal, ill-conceived or contrived research. I'd apologise, though I'm afraid I also have a low tolerance for mediocrity and perhaps through therapy a penchant for sarcasm would also quickly bubble to the surface.
I save my harshest judgement for (mis)'leading' research which delivers lofty descriptions of products or services that respondents could never say no to and then asking them at what price point they would pay for their product or service. These studies rarely deliver very little differentiation in preference but are often interpreted as affirming the price proposition desired. Surprised?!
It was refreshing, therefore to read the recent Harvard Business Review article - Ask Your Customers for Predictions, Not Preferences.
As Julie Wittes Schlack points out; "Purchase intent is notoriously overstated in survey reposes, showing little correlation with actual sales performance…In contrast, when you ask a diverse group of people not 'What are you going to do?' but rather, 'What is going to happen?' the results tend to be far more accurate."
Prediction market testing returns a greater degree of accuracy and has the ability to provide more discernment between concepts. Comparisons with prediction market results to the results from other forms of tests and real-world outcomes are promising. What I love about prediction markets are the rich and unique insights it also delivers and the potential to easily sight 'step-change' ideas.
As HBR points out; "Prediction markets...provide a far more nuanced read on consumers’ thinking and passions than do traditional methods. They let us immediately see which concepts are polarizing, because they attract significant positive and negative investment. We can also discern which ideas are most differentiated and attract the greatest passion based on the number of investors they attract and the average number of points invested."
Similarly, Choice modelling in market research (as described by Decision Analyst is an 'analytical method used to simulate real-world consumer purchasing behaviour') is used to guide product positioning, pricing, concept testing as well as to predict changes in demand and market share.
Neither prediction market testing nor choice modelling are new concepts but both are under-utilised in the Australian market. A simple survey or an internally conducted set of focus groups (for preference testing) are often employed to validate conventional thinking and generally seen as more cost effective options. Results might convince those not familiar with the rigour required to deliver robust results but they are 'safe' and where more accurate methods are available, dare I say, naive.
Trialling new research methodologies, especially those which engage real customers requires bravery and vision. Knowing when to use them requires deep research and insights knowledge and leadership. As HBR puts it - "The most visionary companies not only explore new research methodologies, but also engage their customers' passion and expertise in the design and testing of the products and services they'll eventually be asked to buy."
Be curious, always - never be afraid to learn something new. Explore new methodologies which deliver better results - neither you nor your business/client will regret the insight you will garner not just from the results but also from the implementation of the process and the mere learning of a new skill.
Recently I read an article; 5 Reasons Why Watching Live TV is Good For You and couldn't help but recall the advent of the first of such types of articles from newspaper supporters. It reminded me of a 5 year old article on newspapers: 10 Reasons You'll Actually Miss Newspapers.
CEO of Netflix, Reed Hastings recently predicted the demise of broadcast TV within 16 years, suggesting it "will be another casualty of evolution" and claiming it "will probably last until 2030,” and likening it to “kind of like the horse — you know, the horse was good until we had the car.”
These platforms begin to flail when consumer driven change and the technology that may drive consumer demand is ignored because of the volumes of revenue associated with the platform.
It's also about content but in a new context. Content is still king but as Jonathan Perelman of Buzzfeed once quipped - "distribution is Queen and she wears the pants"! The latter is the fundamental element often overlooked. We tend to hold onto the notion that distribution is the most powerful component and as such is the least vulnerable to change when exactly the opposite is true.
To illustrate, the 5 reasons from the article are; serendipity, curiosity and awesome delight, the time to do something else, to reduce (social) anxiety and to be in the present - can all be delivered by non-live TV or another medium, another form of distribution? The bonus is a consumer doesn't have to adhere to a broadcaster's scheduling.
We could attach any one of these 'reasons' to any medium. Online is king of serendipity and curiosity and selecting what, where and when you want is the ultimate in enabling time for something else. #FOMO was usurped when #JOMO (Joy Of Missing Out) was identified as far back as 12 months ago (that is, I really don't care if I miss it live - I'll catch up in my own time because a TV schedule doesn't rule my life) and SVOD or streaming isn't only consumed in 'binge' quantities, enabling you to be 'present'.
In the instances where (questionably) not, it's a fair stretch to suggest TV is good for you. It's certainly not a data-centric insight.
If we're honest the reality is 82% of content watched live has more to do with that measure not being compared with those watching via other platforms (i.e. catch up online as opposed to it being a measure against other TV time dimensions alone) than a desire for consumers to specifically want to view (only) in this manner. They are separate measures. It also has much to do with content rights resting with TV broadcasters and not digital entities (or their own digital assets)…yet.
As a sample of one, I consume live TV for sport and occasionally for news. All other content and the majority of my news I access online but it doesn't seem that long ago I consumed news from a newspaper.
Ask anyone under 50 if they could live without (traditional) TV currently and then if they think they will be living without it in 5 years. I'm sure you can guess what the answer will be from the majority. Their prediction for 5 years will give you a better indication than their current behaviours and preferences.
In hast to judge though, we should be mindful that in a couple of decades, it's possible subsequent generations will be wiring of the demise of digital??!!
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