Building large reach in a short time — that’s the strength of TV advertising. But it can be done even more effectively. As television and the Internet grow together, innovative forms of advertising become possible. New technologies make it feasible to aim advertising messages at specific target audiences and geographical locations. In 2015, ProSiebenSat.1 was the first German TV broadcaster to launch addressable TV. The Company is now getting ready for the next stage in TV advertising: virtual reality.
Broadcasting German-speaking: The Future of TV Advertising
Taking a nighttime spin in the car and sharing the experience with friends on Instagram is nothing unusual. But having your own snapshots become part of a TV spot — now, that’s something new. “In 2015, we worked with the Mini automotive brand to open up a whole new phase in the future of TV advertising,” explains Angelika Seemann, Sales Director of ProSiebenSat.1 marketer SevenOne Media, at her Munich sales office. The Instagram users’ photos provide the urban setting against which the indie rock band The Vaccines cruised around in a sporty Mini John Cooper Works. The spot attracted 46 million contacts among ProSieben viewers aged between 14 and 39 alone. Social media generated another more than five million contacts and more than seven million ad impressions.
But it’s not just the figures that prove that the power of TV remains unbroken among the younger generation. “No other medium can build such a big reach among all target audiences as fast as TV can,” says Matthias Brüll, the German head of Group M, the largest media agency network. “So it will continue to be the strongest advertising medium and the backbone of many campaigns in the years to come.”
ProSiebenSat.1 is taking advantage of that prediction. The Company has raised its revenue projections for the Broadcasting German-speaking segment to EUR 2.3 billion by 2018.
Big reach, targeted approach: Addressable TV combines TV and Internet
The market is gathering additional momentum from what is known as “addressable TV.” ProSiebenSat.1 is ringing in the next generation of TV advertising, combining the reach of mass-medium TV with the focused appeal of the online world. Using the “Hybrid Broadcast Broadband TV” technology standard — HbbTV for short — viewers can push a “Red Button” on their remote control for additional digital content on Internet-compatible TVs. For example, during an advertising spot they can push the button to view the advertised brand’s microsite to get more information. In 2015, SevenOne Media combined this interactive function with its new “SwitchIn” special advertising format for the first time. The digital advertising window, which can be displayed as a function of target group and geographical location, covers part of the screen as soon as the viewer switches to a ProSiebenSat.1 channel. But only those who belong to the selected target audience during the campaign period will see the ad.
LONG FORMATS, WIDE SCREENS
of Germans prefer to watch feature films on a TV screen. News follow with 82 % and documentaries with 81 %. On the other hand, Germans would rather watch video clips on a computer (51 %), mobile phone or tablet (17 % each).
Source: Nielsen „Screen Wars 2015.“
Car maker Daimler was the first client to try out this innovative ad combination for its Smart brand. The SwitchIn was selectively cut into the program environment on ProSieben, SAT.1, and kabel eins for the target audience aged between 30 and 59. The Red Button then took interested viewers to a special Web page with information about Smart test-drive events and product information. But an overlay can also be applied to a nationwide advertising spot to enrich it with local information. The first campaign of this kind was launched in 2015 for the Opel Corsa, divided up into dealer territories. A banner appeared over the national spot listing nearby Opel dealers. Then, the “Branded Red Button” took the viewer to the nearest dealer’s Website. “HbbTV has equipped television with a turbocharger for the next 20 years,” says Jens-Uwe Steffens, Managing Partner of the Hamburg-based media and creative agency Pilot. “Differentiating target groups and geographic fine-tuning — meaning precise approaches via the TV screen — are massive marketing drivers.”
More and more homes have a smart TV: About 30 million sold units projected by 2020
With more than 16 million HbbTV-ready devices in German households so far, our potential reach has exceeded the critical mass above which geographically displayed HbbTV advertising tailored for target audiences begins paying off for clients. This trend is growing fast. In the medium term, the number of devices will reach 25 million. “The more people we have connected, the more precisely we can address our target audiences,” is how Seemann views the future potential.
The advertising impact of addressable TV, with its combination of the Red Button spot and a microsite that leads viewers onward, is already proving its value today: Advertising recall and dwell times are rising sharply, along with the propensity to buy. “Addressable TV lets TV play to its strengths,” says media expert Matthias Brüll from Group M.
Prospects for strong growth in marketing: Virtual reality offers fascinating experiences
While addressable TV is still discovering the size of its market, the vision of entirely personalized advertising on the screen is already in the offing in the form of virtual reality. In 2015, ProSiebenSat.1 acquired a minority stake in American start-up Jaunt VR, which specializes in this kind of content. “Virtual reality is going to be a major push for TV and will open up new worlds, also in marketing,” Seemann is convinced. ProSiebenSat.1 has already run the first test cases at dmexco, the leading international trade show for digital marketing and advertising. Virtual reality will be able to take viewers to new realms. That implies a whole new world of fantastic entertainment — anytime, anywhere.<
TV advertising on a growth course
Fast-expanding reach, strong emotional appeal, accurate approaches: TV advertising is highly effective and efficient. There are good reasons why its demand will continue to grow in the future.
viewers a day in Germany are reached by TV.
This lighthouse function will only become more important in a niched media world with its fragmented reaches. The value of TV is on the rise compared to other media.
is the average return on investment for TV advertising after five years.
Even after one year, a TV campaign can pay for itself with an average return on investment (ROI) of EUR 1.15, according to calculations by SevenOne Media’s ROI Analyzer.
Virtual advertising enables advertising clients to address viewers with a personalized, strongly emotional appeal. ProSiebenSat.1 presented the first examples to the public at the dmexco trade show in 2015. Augmented reality, which links virtual advertising with the real world, will be the next feature to enliven TV advertising. Over 200 million people worldwide will be using augmented reality apps by 2018, according to Juniper Research. At that point 25 million virtual-reality or augmented-reality headsets will be on the market, say the researchers from the Gartner Group.
of daily media usage consists of video, which is still dominated by TV.
Though mobile devices continue to spread, the basic patterns of media usage remain largely stable. The new forms of TV count as “on top” uses.
In 2015, ProSiebenSat.1 became the first German broadcasting group to offer addressable TV. Advertising windows can be displayed as a function of target groups and locations. A “SwitchIn” is overlaid digitally over the line TV program or advertising spot. The Red Button can be triggered just as precisely. Opel and Daimler were the first clients.
EUR is the estimate for what the German TV broadcasters will earn in gross advertising revenues in 2016.
TV is continuing to pick up a tailwind, according to Nielsen Media Research. For 2015 these market researchers calculated a total advertising volume of EUR 14 billion. The 2010 figure was only EUR 10.9 billion.
of video consumption on all screens is covered by TV.
TV continues its succes on the Internet and mobile devices.
is the estimate for the growth of online video advertising on average.
That’s the projection from consultancy Magna Global for the period from 2014 to 2019. With the boom in video on the Web, a market is growing where TV broadcasters already know their way around. They are deriving especially great benefits from the upswing in video advertising.
of the population in Germany organizes their living rooms in a way that allows them to watch TV.
TV advertising also has an impact when the viewer is using another device in parallel — in fact, it tends to work even better because the Internet reinforces the impulse effect of TV contacts.
tailored distribution according to the target groups is possible.
As TV and the Internet coalesce, TV advertising via HbbTV will become even more effective. Viewers will become precisely addressable. Advertising will be more successful and more efficient.