As consumers watch more and more content on-demand and through streaming platforms, traditional television players are trying to figure out the best strategy to take advantage of these new viewing habits.
At the Next TV Summit in New York, two network executives -- David Levy, executive VP of non-linear revenue for the Fox Networks Group, and Aaron Radin, senior vice president of partnerships and portfolio products for NBCUniversal -- explained how their two companies were working together to fulfill that goal.
“For television, we are faced with challenges from the left with Facebook and Google on advertising, and on the right we are looking at Netflix, Amazon and ad-free experiences,” Levy said. “Our challenge is, how do we create a competitive viewing environment to Netflix and Amazon, and at the same time make enough money off of ad-supported revenue to continue to product quality content?”
At the heart of the problem is the relative inefficiency of traditional ad formats, which don’t necessarily translate to new platforms such as streaming services.
“Our challenge to make a competitive viewing experience with ads is really about taking what our traditional format is -- about 16 minutes of ads per hour -- and trying to create something competitive to an ad-free environment, and that is probably something like two minutes, or one minute,” Levy said.
“We have to get more efficient with the consumer’s time... We have to deliver the exact right message at the exact right time, so that we can actually drive more ROI with two minutes of ads than we were with 16,” he added.
The solutions the companies are working on are largely technological, allowing marketers to use automated platforms to transact more efficiently. The strategy also includes improving measurement to go beyond just cost and reach.
The two media giants are hoping to roll out solutions that combine automation and improved measurement and targeting, enabling them to take on the digital behemoths for ad dollars on these new video platforms.
“Google and Facebook have extraordinary automated systems that allow them to present their inventory and allow buyers to buy their audiences at immense scale,” Radin said. “In order to be competitive going forward, [we are looking at] how can we converge that inventory and present it to the market, and allow our clients to transact on it the same way they might buy a search ad on Google, or a native ad on Facebook.”