1. Millennials will never take to traditional TV (more than they are now)
While it’s known that traditional TV viewing in the US and the UK by Gen Y (and millennials) has fallen by 4.5% annually since 2012, it’s now known that they never take to it.
At present, this category averages watches less than 200 minutes of TV daily in the UK and less than 250 minutes in the US. This is lower than any other age group and, contrary to other age group trends, while this group watches more TV as they age, the increment is not as pronounced as previous generations.
"In startling opposition to history, GenY and GenZ are actually watching less as they age," wrote report authors, Adam Smith, futures director, and Rob Norman chief digital officer, of Group M. "GenZ and GenY TV-viewing is falling in absolute terms and even more against expected lifestage."
Based on this, the report authors calculate that as Gen Y ages, it will pull 35-54 viewing down by over 1% a year in both the US and the UK.
2. Addressable TV is here and it’s growing
While programmatic TV is still a pipe-dream, data has changed TV advertising. Addressable TV allows networks to insert ads into linear and time-shifted TV ad breaks which are seen only in homes selected by criteria of location, income, demography, purchasing behaviours and so on.
Currently, addressable TV is only available at scale in the US via pay TV providers that include Comcast, Time Warner Cable, Cablevision, AT&T/DirecTV, and Dish. One2one estimates the total number of addressable US TV households (linear plus VOD) stands at 68 million, up from 50 million in 2016.
In the UK, it’s only available via Sky AdSmart. In January, the network said it had run more than 7,000 household-level campaigns for more than 1,000 advertisers. At the time of the report’s writing, Sky intended to multiply this to 5 million.
3. Challengers to TV’s advertising crown
Group M regards TV’s biggest challengers (in the West) to be primarily, Google and Facebook, and secondarily, Snap and Twitter. Also, in some form, Amazon.
So far, YouTube is not regarded as a replacement to TV for advertisers, the report said: "For many advertisers, YouTube still lacks sufficient inventory that the advertiser (or the television industry) would describe as quality.
Even Google Preferred, an aggregation of its highest quality content, deteriorates as campaigns scale and results in a huge percentage of impressions being delivered adjacent to gaming and "social humour" content, it continued.
Nevertheless, viewership of YouTube on TV (screens) grew 90% in the US in 2016 and is set to grow 90% in 2017. This, the report said, could be due to the rise of more professional quality content.
Facebook defines video as any moving image: "from a GIF to a slideshow to conventional video." This, the report advised, points the way to advertise on Facebook. Advertisers could animate all images, rather than aim to compete solely on short video clips.
Currently, the report said, when it comes to advertising on Facebook, advertisers have issues with autoplay (as opposed to user-initiated), and with data. Nevertheless, Facebook’s push into original content could propel its conquest of TV advertising.
Amazon Prime is now in around 65% of US households. Yet only around 18% of US wi-fi households watch Amazon Instant Video. Amazon pays publishers $0.15 (£0.11) per hour screened in the U.S. ($0.06 elsewhere) on Amazon Direct Video and has an ad-supported model in which the publisher share is $0.55.
"It’s too early to predict the effect of this on the market, but it’s another direct challenge to YouTube," the report concluded.
Approximately half of Twitter’s $2bn revenue now comes from video. Twitter’s main constraint is "time spent on platform." Though not "apples to apples," monthly US users range between 120 million to 150 million adults for Facebook, YouTube and Twitter.
Time spent, however, polarizes spectacularly with core YouTube and Facebook at over 30 hours per month and Twitter at two. "Monetisable time spent" is the key to economic success from advertising and the imperative for Twitter.
Snapchat has half the US penetration of the longer-established platforms at around 68 million users, including 78% of 18-24s and 48% 25-34s. It reaches less than a quarter of over 34s. In contrast, Facebook reaches 90% of the entire internet population.
More interestingly, Snapchat averages six hours monthly in time spent. From a placement perspective, Snapchat video is highly attractive to advertisers, which appear in interstitial format thus eliminating "shared screen" issues and some brand safety risk.
4. In future, media tech platforms will hold the bargaining power in live sports
Media tech platforms are muscling in. Over the next decade, they might disrupt how live sports events are consumed, the report predicted.
"Amazon buying the ATP rights in the UK is an example. Even at a relative bargain of $13.2m, how does a TV company selling advertising or subscriptions compete with a retailer using the content to sell tennis gear?" the report asked.
Apple has enough cash to buy the NFL, NBA, MLB and NHL rights, and all the teams too, if it wanted, the report noted. "Facebook’s TV ambitions may tempt it into the fray. Google can continue to dabble and explore with formats and modes on YouTube, working out how to make live sports pay in the digital ecosystem before making a move."
5. Measurement is still lagging behind
Viewing measurement has not kept pace. What appears to be a loss of linear audience is in fact "largely a measurement illusion".
"As audiences increasingly migrate to view content on poorly or completely unmeasured screens, this situationwill only get worse. What goes unmeasured cannot be fairly or fully monetised and thus may not exist in the future," the report said
Current market mix models compare multiple video streams that use different impression calculations.
"We need to develop better strategies to build our clients’ business. The lack of holistic measurement is holding us back," the report’s authors urged.