At the third Interactive Television Advertising Show in London, Nick Milligan, the managing director of Sky Media, said that television is under threat and the 30 second advertising spot is under more pressure than ever before, but it seems the sky is far from falling in.
“I have experienced more change in our medium in the last four years than in the previous 25,” he said. “Who would have thought it extraordinary 10 years ago that we would have to defend the medium of television? Clearly it is the most powerful advertising medium.”
All the main commercial broadcasters in the UK came together last year in an unprecedented way to create Thinkbox, an industry body to market television advertising.
“It is critical that we find ways of enhancing the old interruptive model and interactive advertising is a wonderful way of enhancing advertising efficiency,” declared the man responsible for advertising, sponsorship and interactive advertising across a portfolio of channels on the Sky platform. “We are not interested in cornering the market in interactive advertising, no matter what people may have thought in the past about Sky’s ambitions. I genuinely welcome competition.”
Following the failure of the Zip TV consortium, which sought to create a competitive alternative to in-house services from Sky, ITV has come together with Emuse Technologies to provide interactive advertising under the banner of Absolutely Media.
Sky, which has been delivering interactive television adverts for over five years, is now looking to extend its range of interactive services. It currently limits its interactive spots to the last in break and says a large proportion of that inventory is sold. Sky needs to find new models if it is to grow the interactive advertising business.
“We are looking to offer our customers video-on-demand through the set-top box,” explained Nick. “This opens up further possibilities of ad insertion and specific targeting for those advertisers.”
There are now more than a million homes with a Sky+ personal video recorder, and Sky aims for that number to increase to a quarter of all its subscribers. Its new high-definition television service comes with a personal video recorder as standard.
“It enables people to change the way they watch television,” said Nick. “Sky+ is well documented as being no friend to the advertiser. We cannot deny that advertising is affected but we are certainly well away from the meltdown people have predicted.”
“If you ask people if they fast forward through ads the claimed behaviour is about 40%,” said Nick. “The truth is that number is nearer 14%.”
He refers to research recently published by BARB, which suggests that time-shifted viewing accounted for 13.8% of all viewing by individuals in Sky+ homes. However, 8% of viewers used their personal video recorder to time-shift more than half of their viewing.
This research is based on just 165 Sky+ homes in the BARB panel, but Sky suggests this impression is backed up by its own much larger Sky View panel. People with Sky+ actually watch more commercial television, they argue. Commercial impacts have risen. Relax.
This runs counter to anecdotal evidence from many in the industry that admit they routinely avoid adverts on television, but maybe they are just more media literate than the masses.
Nevertheless, Sky is exploring the use of the personal video recorder to create new commercial formats. “We’ll be using the hard drive to enable broadcasters to deliver more and better forms of advertising that allow the viewer to choose to watch long-form content,” said Nick.
“We know that non-linear and on-demand experiences will probably change our viewers’ tolerance for interrupted forms of advertising. We need to give advertisers the opportunities to use long form video to communicate their message.”
This could provide full-screen video, which is currently restricted to quarter-screen due to limitations on broadcast bandwidth. Furthermore, it can start at the beginning, enabling narrative presentation, rather than somewhere in the middle of a loop, and is available at the convenience of the viewer.
“Imagine a not too distant future where the advertiser can invite the viewer to download full-screen content of almost any duration to be watched at almost any time of their choice,” explained Nick. “It could be 30 seconds or an hour. It could be at the same time every week. It could be high-definition. It could have full surround sound.”
“The big difference is that the advertiser has to win the trust of the viewer to request the download in the first place. The content needs to reward the viewer for their interaction. The brand must build that trust and never betray it. Brands that build and keep that trust will eventually reap huge rewards.”
Sky is also looking to broadband and mobile to provide additional video advertising opportunities. The Sky by broadband service, which offers movies and sports clips for download over broadband at no cost to top tier subscribers, has now been equipped to serve adverts. The Sky by mobile service now has over 100,000 subscribers and has streamed over 12 million sessions in a matter of months since it launched.
Sky is also gearing up to launch its own broadband service later in the summer. “The purchase of Easynet last year will take Sky into a whole new broadband world which will transform the business,” said Nick.
It certainly seems that there is more to come in terms of interactive television advertising. If viewers are avoiding conventional commercials, in whatever numbers, they are unlikely to even have the opportunity to see interactive adverts.
Personal video recorders and video-on-demand services offer the potential for new forms of contextual, targeted, truly interactive advertising. Viewers may even be persuaded to opt in to relevant commercial messages, especially if they are not seen simply as adverts.