TV is under pressure from social media, but don't write it off yet
Published 01/05/2016 | 02:30
The global spend on television advertising is estimated to hit $200bn this year. And for some time, a host of social networks have been chasing this prize.
As media consumption habits continue to evolve, the battle for TV budgets is becoming more intriguing. According to research company eMarketer, 2016 is the first year that digital media consumption will overtake analogue media consumption. But only just - digital media will make up 50.07pc of all media consumed.
The main driver of this digital growth is, of course, the smartphone. In the UK (where such figures are available), the average adult will spend 2 hours and 40 minutes a day online this year, and the proportion of total ad spend on mobile is set to hit 29pc.
Mobile, therefore, is becoming a hotly contested channel on which the battle for TV revenue is taking place.
That's music to Facebook's ears, as it has been massively successful in owning eyeballs and generating revenues on mobile channels. Its latest range of features designed to make further inroads into online video include the ability to cross-promote videos from different pages owned by the same account, a new mobile video browsing hub, a video search engine for mobile and a push into live video.
Last weekend the social network streamed its first live sports game with little or no fanfare. It was the US National Women's Soccer League game between Orlando Pride and Houston Dash. The stream appeared on Orlando forward Alex Morgan's Facebook page and reached 554,000 unique viewers. (Orlando won 3-1, if you must know.)
But Facebook isn't the only social network trying to get into live sports. Twitter recently announced a deal with the NFL to stream 10 American football games, reportedly winning the rights ahead of Facebook, Amazon and Verizon.
It's unclear how Twitter will integrate the games into its rolling news feed. But with Twitter's second screen dominance and the potential to incorporate complementary Periscope streams from fans and journalists, there is the potential to build an all-encompassing sports experience around these games.
Snapchat is another channel that has captured an audience on mobile. But its lack of reporting has left marketers scratching their heads. Snapchat's plans regarding video focus less on new products, therefore, and more on new recruits. It has poached two media research veterans, one from Millward Brown and another from Google.
It has also done deals with Nielsen and a handful of ad tech companies to provide more data to media buyers.
But the top dog in online video is YouTube, which currently takes in about $9bn in advertising.
It recently rolled out a new ad format designed for mobile video consumption. It's called a bumper ad, and it's a six-second unskippable pre-roll - YouTube refers to them as the "little haikus of video ads".
YouTube is also ahead of its rivals in terms of PR. The latest 'Think with Google' infographic features a host of facts cherry-picked to impress media buyers. Here are some of them: six out of 10 people prefer online video platforms to live TV; in 2015 18- to 49-year-olds spent 4pc less time watching TV and 74pc more time watching YouTube; on mobile alone YouTube reaches more 18- to 49-year-olds than any TV network; and when it comes to reaching those elusive millennials, YouTube is also tops, accounting for 66pc of the premium online videos watched across all devices.
Despite this statistical assault, there's still an impression that TV delivers a higher quality bang for advertisers' bucks.
So is TV really under pressure from these social pretenders?
Undoubtedly the answer is yes, as consumption habits are changing so radically. But TV is proving more resilient than other forms of media. In the US, the rise in cord-cutting, or the move away from cable, is cited as evidence that traditional TV is on the wane.
However, Comcast, the largest cable and broadcasting company, has just announced that it added 53,000 new subscribers in the first quarter of 2016. There were also recent reports that it was in talks to acquire DreamWorks Animation - a deal that would put it on a par with Disney.
So, when it comes to the bigger networks, rumours of TV's death may be greatly exaggerated.
Sunday Indo Business