​​​
  1. Subscription video on demand: Continued growth of SVoD is a challenge, says president of Essence, Global Media

Subscription video on demand: Continued growth of SVoD is a challenge, says president of Essence, Global Media

People subscribe to SVoD not to avoid ads, but because they want a different viewing experience

By: | New Delhi | Updated: October 12, 2018 3:36 PM
Adam Gerber (Photo: Amit Mehra)

Prior to joining Essence (WPP’s global data and measurement-driven agency) in 2017, Adam Gerber had a prolific stint at Disney ABC Television Group. He was recently promoted as president, global media, at Essence. Gerber talks to Ankita Rai about his new role, trends in advanced TV and voice, and the advertising opportunity in the subscription video on demand (SVoD) space. Edited excerpts:

What are the key shifts in media planning owing to the rise of digital?

This shift is driven by consumer behaviour and the move to digital platforms. As a media agency, we need to rethink how we approach the evaluation of the media marketplace. Consumers have a lot more control on how they engage with content and whether they are willing to accept advertising. Thanks to digitisation of the delivery of media, we have a lot of data available to deliver the right advertising at the right time.

How is traditional TV reinventing itself? How is the sales model evolving?

Advanced TV is about moving from a unit-based model to an impression-based model. In the digital ecosystem, we buy impressions in real time and serve on a one-to-one basis on a targeting criteria. That is where television is headed. But it will take a long time because the infrastructure has to exist. It is not easy, given TV is consumed live. Imagine having to serve a different ad to each household during a live cricket match.

There are technological challenges, legacy issues, measurement issues and commercial issues. In the new world of addressable TV, the cable company is the platform that ultimately facilitates the addressable ad being delivered to the household. They will want to participate economically; they are third party now. In the US, the addressable TV market is estimated to be between $500 million and a couple of billion dollars annually, and is controlled by cable companies. But that is changing with AT&T making a big play in the addressable TV space with its acquisition of Xander.

Where does OTT feature in media plans?

The US has a robust OTT market with multiple players such as Netflix, Amazon Prime and Hulu. We have huge consumption on platforms like YouTube too. There are different behaviours we see from a consumption perspective, not only by the age demographic but also by socio-economic segmentation of the marketplace and psychographic segmentation of the population. While the older audience (50-plus) tends to watch television more, they have also adopted services like Hulu and Netflix. But the bulk is on the traditional platform. When it comes to the younger population (18-34), a high proportion of viewing occurs on digital platforms such as OTT and YouTube. Thus, a media plan should use a combination of OTT, traditional video and digital native content on YouTube.

With OTT veering towards SVoD, where does advertising fit in?

We are seeing continued growth in SVoD across the globe, driven by Netflix. Studies show that a majority of people want to watch content that is ad-supported. There is a tradeoff between paying for content and paying with their time, and it is still primarily skewed towards the latter. But there are people who are time constrained. People subscribe to SVoD not to avoid ads, but because they want a different viewing experience for long form content. They are willing to participate in the ad-supported model, but their expectations are different from what exists today. They want personalised messaging and less intrusion.

Marketers need to figure out how to address them. That’s a key challenge for agencies and an area Essence is focussed on.

How are media companies monetising OTT? Are they direct selling inventory or selling programmatically?

Both. I am not sure which model will scale faster. Ultimately, the shift to the programmatic platform will happen. A vast majority of advertising that exists in digital content will move to platform-based transactions. However, TV networks are predominant owners of content that is being distributed on OTT platforms today, and they have a very traditional sales model. For example, TV networks in the US are not chopping off their inventory by platform and selling independently. As a result, a large proportion of OTT inventory is being sold on direct channels, not programmatically.

What kind of opportunity do you see for advertisers in voice?

There is a huge opportunity in voice. It is going to change the way people navigate content. Advertising on voice could take many forms. In the US, platforms such as Spotify and Pandora are delivering music through voice platforms. The ad model will be similar to traditional radio — you can deliver an audio ad with a music experience on the voice platform. In the case of search, we see sponsored search results being developed. But who would own the search response and what kind of response is to be delivered, are big questions.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top