Can digital steal TV's thunder?
Last week, GroupM published a forecast for digital advertising growth in 46 markets. Nothing too shocking: digital advertising is growing faster than TV and will account for 77pc of new ad spend in 2017. TV, for its part, will account for 17pc.
It may lag in terms of growth, but that's because TV is still top dog, according to the advertising and media group. Television's share of ad investment stood at 42pc in 2016, and a minuscule dip to 41pc is predicted in 2017. So with TV still top of the pile and digital growing fast, it's no surprise that many online products and services are trying to get their mitts on some of TV's ad spend.
Twitter is one digital platform that's betting that it can court a traditional TV audience and some of its ad revenue. It recently announced a slew of partnerships that illustrate what digital platforms are doing to take on TV. Sport is a big part of the programming plan. Twitter will stream 20 women's basketball games per season, there'll be a three-hour baseball programme once per week and a live show where athletes can interact with fans and more.
In entertainment, there'll be concerts and behind the scenes at fashion-weeks in New York, Milan and Paris. There'll be a gadget show in partnership with the Verge, and a morning entertainment show in partnership with BuzzFeed. But the most interesting content play relates to news. Twitter has teamed up with Bloomberg to launch a streaming video service, which will launch this autumn. It's billed as the first-ever 24/7 global, social and streaming news network. Sounds impressive, but what are we actually talking about? "It will feature an extraordinary mix of user-generated breaking news video from citizens, curated and verified by Bloomberg editors, along with live video and reporting from Bloomberg journalists around the world," gushes the blurb.
"Combining the speed and immediacy of Twitter with the editorial rigour of Bloomberg, the network will be interactive, rich with social content and consumable on any device," it trumpets. So we're talking Sky News for phones, with added user-generated content. But hey, the markets were impressed. Twitter's share price climbed to its highest levels since last October this week.
So some people clearly believe the hype. Others are less enthusiastic.
One sceptic is WPP's Martin Sorrell. "Facebook can't really claim that a three-second view when 50pc of the time the sound is off is the same as a 15-second, a 30-second, a 60-second TV ad or someone reading a The Times for 40 minutes," he harrumphed last year in defence of traditional media.
And let's face it, he's got a point. Last year BuzzFeed exploded a watermelon on Facebook Live using elastic bands. The video, which has been viewed 11 million times now, had around 800,000 concurrent viewers towards the end of the 45-minute broadcast. But how many of these were muted, partial and non-user initiated views of the doomed fruit?
BuzzFeed and Twitter teamed up for an online broadcast on the night of US Presidential election results last year. The programme ran from 6pm until just after midnight and garnered 6.8 million viewers in total. Not bad. But not great compared to traditional TV. Average audience per minute is the best metric to use when comparing online video and TV audiences. For Twitter this amounted to 165,000 viewers globally.
According to Nielsen, 71 million Americans watched on TV from 8pm to 11pm on election night. So Twitter's global audience amounted to 0.23pc of the US TV audience.
There's another area where online channels lag behind TV. They're nowhere near as good at generating demand. The US TV industry has its Upfronts, a series of glitzy events where advertisers are given a tantalising glimpse at the shows that are coming soon. Big shows, big stars and - most of all - finite ad space mean that the TV industry can generate demand and urgency amongst advertisers at a particular time of the year. It's a selling season.
Contrast that with online channels. There's an elastic supply of inventory, there's no annual selling period like the Upfronts (though they've tried with a series of IAB-organised events called NewFronts) and increasingly advertisers are turning to programmatic channels to book their inventory. So while digital channels are still honing their business propositions, TV is rolling out the red carpet. It's an evolving business model versus a showbiz behemoth, and while the online upstarts talk a good talk, they have a lot of catching up to do.
Sunday Indo Business