The UK TV Landscape: Collaborate or Die

Last week, the FutureTV Advertising Conference landed in London, sprawling over four days and three locations. The event has been running for a few years, and the themes are often consistent, but this year a palpable sense of urgency was in the air. Broadcast TV in the UK has essentially got away with it over the past decade. Print media has disintegrated, radio and outdoor have consolidated furiously in order to maintain relevance and reduce costs; all have suffered at the hands of Google, Facebook and the march of programmatic digital advertising. But now, it’s the broadcasters turn to be nervous. FAANG have their sights firmly set on broadcast audiences and ad dollars, and the stakes have suddenly been raised.

As a result, we saw the heads of ITV, Channel4 and Sky share a stage for the first time ever. The word ringing through the conference halls was “collaboration”. Sky were putting their money down and demonstrating tangible progress. Their AdSmart product has run over 1,700 campaigns. It is the only TV service in town that looks anything like the open interface of a Facebook Editor or Google AdWords. And now they have agreed their pay TV rivals Liberty Global can use it too. Cadent have been brought in from the US to deliver even further reach and insights. Jamie West of Sky would like to work with YouView and Now TV in the next few years. Everyone else wishes ITV would get onboard too.

AdSmart is intriguing as it gives local business, and SMBs the chance to utilise TV smartly and efficiently through targeting and geo-location. Facebook and Google make the majority of their money from SMBs. Sky now have a weapon which can push back against Facebook and Google’s primary weapons: flexibility, visibility and exceptional targeting precision. This could be the breakthrough platform for broadcast advertising, and it is part of the reason Comcast were so happy to pay over the odds to purchase Sky.

However, Carolyn McCall, the ITV CEO, didn’t seem inclined to utilise AdSmart. There was a sense of ‘not invented here’ about her reasoning. She is still keen to collaborate, but perhaps more with the other major UK PSBs. She had a long list for Santa, most of which feels speculative: an end to CRR, a level playing field on advertising compliance, the opportunity to create a joint UK SVOD platform to take on Netflix and Amazon. ITV, Sky and others are aware just how fast SVOD is growing. In the UK, Netflix has 10m subscribers, 400,000 more than Sky, who have been doing this for over 25 years. They are taking TV eyeballs away from the adverts, and that is hurting commercial TV more than they care to admit.

Channel4 have been running some interesting tests around contextual TV, swapping ad copy to be more relevant to the editorial. They are talking to YouView about expanding usage of the technology. But it felt like a solution in the absence of programmatic TV, and not much of a game-changer. Interesting that Channel4 were also trying to work with YouView, also of interest to Sky. Maybe they could all work together?

Without wanting to spook the stock market, Carolyn McCall admitted that Q4 was “impacted” by the ongoing Brexit uncertainty. She said she feels almost certain we will see a contraction in the ad-market, and maybe a consumer-led recession. Tough times lie ahead, but it’s often during such periods that we see real breakthroughs and innovation. 2008/9 saw a big drop in advertising spend, but also the unstoppable rise of Facebook, YouTube and the concept of turn on/turn off, real-time, optimised media. Perhaps we will see the same revolution in TV over the next two years.

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Dan Matthews

Dan has over 20 years media experience across a range of blue-chip global clients. During the past four years, he has worked principally with The Walt Disney Company across most aspects of their media and marketing. He passionately believes a good account director should understand their client’s business from the outside in, and deliver business results, not just marketing outcomes.

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