Thinking Inside the Box A comprehensive study of TV and addressable advertising in a transforming media landscape.

1 Whitepaper written by DRG in collaboration with Finecast Thinking Inside the Box

Foreword. Whitepaper Guide by

With the continuing developments in technology and the pace of change accelerating, we’ve all become accustomed to adapting to new approaches, tools and information. Section 01. Section 02. Section 03. Within the advertising landscape we’ve seen huge advances in the last few decades, and the advent of digital Looking Outside The role Left to your marketing has ultimately revolutionised our approach, whether brand, agency or consumer, all powered by the the Box of TV own devices use of data and granular insights. TV advertising has traditionally been a media stalwart, 18. The advertising industry 34. What is TV? 56. The device diary– the role of big and small screens a place where brands become famous with creative 21. Addressing the COVID-19 46. A modern take on TV appearing alongside viewers’ favourite TV shows. Today, effect we can apply the power of TV with the precision of data, 47. A day in the life of a viewer 59. Preferential treatment producing a compelling offering for advertisers. But is this 23. Consumer trust 50. Living up to expectations still the case today? 61. Ads on the TV screen 26. TV in a world of streaming – everything on-demand The primary objective of this research was to deep dive and online video into the impact of the evolution of TV on viewers and how advertisers can navigate this to maximise the effectiveness of their TV campaigns. With TV screens, advanced ‘Smart’ technology, and on demand services meaning we can watch the content we love at a time that suits us across a multitude of screens and devices, how can advertisers run successful TV campaigns today? The concerns arising from other data-intensive mediums receiving considerable scrutiny and goalposts being moved (think GDPR and Section 04. Section 05. Section 06. the death of the Cookie) is also leading to a widening gulf between how brands can reliably reach their audiences with TV Appetite for Appendix relevant, impactful and positive advertising experiences, and consumers’ perceptions of those campaigns. advertising addressable Are big screens getting the right consideration from 68. Playing to one’s strengths 78. The role of addressable 97. Sample composition and agencies and brands? Are they approaching TV advertising – the power of TV ads methodology details in the most effective way? Are they still in touch with how 81. Addressing knowledge gaps their audiences interact with content there? We wanted to 71. How do viewers feel about ask these questions and share our findings with you. TV ads? 83. The experiment We hope you find the outcomes as insightful and 85. People liked addressable fascinating as we did. ads more 89. Addressable ads were more memorable Harry Harcus UK Managing Director 90. Greater engagement for addressable ads 93. Physiological measures 2 3 Thinking Inside the Box. Key findings Key findings

Key findings 2. Addressable TV advertising From an industry perspective, addressable TV was largely seen as positive and something 1. What is TV? that will be part of the future, adding to the strengths of TV as a channel. There remains The choice and power that viewers have over a lot of work to be done in terms of its marketing how, when and what they view, as well as and knowledge sharing, communicating to increasing ad free viewing options, gives them advertisers on how they should best put it to use. a sense of control over their TV consumption. For some this is completely different to Industry professionals cited open the door for more brands the traditional notion of TV that many of the many opportunities offered by to advertise on TV. viewers we spoke to grew up with. But, not all addressable TV, from extending viewing is equal. Viewers are gravitating to the reach of linear TV We found evidence that or building incremental reach, people both explicitly liked different aspects of TV for different needs and to creating relevance and and remembered Addressable certain viewing moments are suited to different reaching different consumers TV ads more accurately. with different messages. They also had greater platforms and devices. Some experts felt addressable subconscious engagement and TV meant campaigns could be greater external focus for them planned around more specific compared to those delivered audiences and that it throws as non-addressable too.

TV is transitioning from produced, premium content, A stark generational difference a physical entity to something viewers were more uncertain was apparent when parents 40% OFF much more complex and divided. The broadcaster put themselves in the shoes and conceptual. brands are very much part of their kids. Parents felt of the modern notion of TV, their children see TV through Viewers don’t have a simple, with BVOD perceived as TV an altered lens, use it very unified answer of what TV by most, but just over half differently and have a different is now, but 60% of viewers categorising SVOD as TV. relationship with ‘TV’. felt they consider it to be For some, TV will always be something different compared a physical box, watching live to five years ago. TV or strongly connected to the home and British Whilst the industry broadcasters, but for others professionals agreed that it’s something much more TV is any professionally fluid and expansive.

4 5 Key findings Thinking Inside the Box. Thoughts for advertisers

3. Big screens and small screens Thoughts for For many, viewing on smaller, personal devices doesn’t replace big screen viewing, advertisers but is an addition, allowing them to expand their by viewing across the day in different contexts and environments. There is also a clear sense Here are five key strategic takeaways that all of convenience linked to viewing on smaller advertisers should consider: devices, particularly for online video but also for TV. Watching when out and about, watching more personalised content 1. when viewing ads on the larger must be shared to enable or watching something different to the rest TV is a unique screen with evidence of slower advertisers to use it effectively. of your household are some of the benefits advertising heart rates linked to a greater Addressable can be used the small screen offers. ability to encode external to build incremental reach opportunity and information. alongside linear, complement therefore requires a other TV, provide new bespoke approach. Looking to the future, 85% of planning opportunities (using UK consumers think they behavioural or purchase As the big screen embodies We found evidence that TV as an advertising medium will always have a TV in the journey data) or to reach more the traditional idea of TV, people remembered ads more demonstrates huge advantages house. This is indicative of the specific audiences with certain it comes with emotive and accurately and had slower over other media channels, power of TV and the emotional messages. Addressable also positive ties. Pairing this heart rates suggesting greater particularly when considering attachment audiences have enables agencies and brands with the relaxing, escapist external focus when watching audience trust. It allows you to it, proving it is firmly a to more accurately track and environment its content can TV ads on a bigger screen to tell stories through the big part of a household’s media report on campaigns and gives create, viewing on the big compared to on a smaller, screen that are powerful, consumption and continues them the ability to use the screen isn’t a comparable handheld device. emotive and therefore more to remain among the best results to gain new levels of experience to watching on engaging for viewers. Our mediums to reach people with insight. This allows brands to a smaller device. The TV screen neuroscience study showed compelling messages. optimise spend and maximise is seen as a key feature in the that heart rates for viewers existing TV campaigns as home and a focal point in the were lower when watching Addressable TV creates well as engaging those harder living room, equated to a fire on a big screen than when opportunities for brands to to reach younger audiences in olden times and 85% they were viewing the same develop their TV advertising whose viewing is far more of viewers (all currently with a content on smaller screens. strategies and strengthens fragmented. big screen in their household) This suggests that viewers the power of this unique felt they will always have a TV were more ‘externally focussed’ channel, however knowledge in their home.

Insight in action: Analyse and understand how ‘TV’ today can best work for your business, for example; what are the optimal combinations of creative and audience based on objectives? How can brands use their own data to better inform TV execution and design innovative campaigns using the full arsenal of opportunities the evolving TV ecosystem has to offer?

6 7 Thoughts for advertisers Thoughts for advertisers

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2. 3. What people on demand (BVOD) is largely the new environment. Smaller Creative is key, viewers engage with and trust 24s open to TV ads stating seen as TV by respondents advertisers or those who are TV advertising. a great TV ad should be consider TV to be, and is therefore becoming new to the medium can reap especially in TV socially relevant. is rapidly evolving. an increasingly staple way to the benefits too by taking Viewers crave positivity from view TV content. This shift to on more experimental and Brands tell stories and TV TV ads, and humour is often Addressable TV also opens No longer just scheduled live the actively chosen viewing focussed strategic investments. allows for stronger narrative leveraged to create enjoyment. up the opportunity to viewing, viewers have become associated with BVOD over arcs by virtue of longer ad This is true especially in tailor creatives to different accustomed to watching TV more passive experience 80% of 16-24-year-olds now lengths. While addressable uncertain times, with viewers personas being targeted. on their own terms and not presents a big opportunity for class BVOD as part of their TV advertising opens up TV keen to see advertisers using This makes content and the solely from the comfort of their advertisers. Even live sport is description of TV. and makes it an attractive positive messaging that feels campaigns they form much living room. Accessing TV in no longer technically linear if proposition for smaller, regional genuine. Consumers are more engaging, relatable and different places fuels different viewers can pause the action. This indicates that the brands, advertisers need to looking for more than just impactful for consumers and needs – advertisers need to be This provides new data to definition of TV is changing maintain high quality creative products from brands, and ultimately more successful for smart in how TV campaigns buyers and opens up new and will continue to do so as standards. If the quality of the social relevance is especially brands. are created and executed. It’s opportunities that require consumers alter their viewing environment is lowered, this important to Gen-Z, with harder than ever to capture TV to be approached in a habits, increasingly looking to will have a big impact on how a significant 48% of 16- viewers’ attention which means different way, and with newly catch-up and to stream content ads need to be more engaging up-skilled teams who can on their terms. and smarter. Broadcast video navigate the technicalities of Insight in action: TV is trusted by viewers as they understand it is a regulated environment, but they also hold the high production value of the content in high regard, meaning it’s important for advertisers to collaborate closely Insight in action: with creative partners to maximise their potential within addressable channels. The right message being As TV evolves and fragmentation across linear, BVOD, SVOD and online video increases, how effective are delivered to the right audience is only realised in full effect when the content is relevant and of high quality. different types of AV at driving brand business objectives? ‘Not all AV opportunities are equal, understand the nuances in your audience’s consumption mindset and the opportunities that this then creates.

8 9 Thoughts for advertisers Thoughts for advertisers

4. 5. Viewers seek relevance for ‘As seen on TV’: Viewers better TV viewing experience trust TV content

Viewers liked the TV ads that were addressed Brands should harness that trust. We to them around 4 times more than the ones surveyed viewers on which media that weren’t. Despite this the concept of channels they most trusted and five targeted advertising is typically viewed as times as many respondents chose one-to-one and sometimes invasive and TV as their most trusted channel negative, particularly when some consumers compared to the next most trusted. 25- feel bombarded with ads from all angles. 34-year olds were the most likely to However, one in three stated they would explicitly express positive sentiment be more likely to view TV ads if they were for TV advertising, with 37% trusting it relevant to them. This tells us that there is a the most. TV advertising has the power fine line between relevance and targeting. With to make viewers feel something, with the addressable TV, we’re looking at households interplay between music, imagery and and postcodes. There are lots of possibilities for humour making an emotional impact advertising in this way, as it creates relevancy possible as well as providing a space to for the viewers without the sometimes ‘creepy’ tell a story, either in a single creative or or inhuman feel of targeting an individual. sequentially over time. TV offers advertisers a range of diverse There were advantages when using opportunities and is more accessible addressable TV ads compared to non-targeted than ever before. In the accelerated age ads across physiological and behavioural of ‘digitalisation’, TV continues to be the measures of engagement. Addressability strongest contributor to both long-and holds out the possibility of better advertising short-term effectiveness KPIs. by improving viewer experience whilst still serving brands and could even lighten ad load with brands able to target at a household level Insight in action: using postcodes. Another outcome of this approach is that viewers are less likely to feel By leveraging the familiarity and high that personalisation has been taken too far and production value of TV in the right ensure that their trust in TV isn’t compromised. way, brands can harness this powerful environment to deliver against a variety of campaign objectives. Above all though, the advertising message will be more Insight in action: impactful by being delivered via the most Getting the targeting right is key, know your trustworthy medium available. consumer or potential consumer – who are they and what do they want to see? Keeping your brand on the right side of the ‘creepy targeting’ barometer is a very real challenge, but one that can be considerably eased by postcode level targeting.

10 11 Thinking Inside the Box 4. Test engagement between Project objectives big and small screens and paint a picture of the roles of different screens in the lives of viewers and the environment each presents 1. for advertisers. Understand what the new normal is when it comes to TV - how do viewers define TV and what does the sector consider to be TV in a world where video is everywhere? 5. Test and quantify viewer engagement when delivered 2. addressable TV ads Explore changing viewing compared to those not behaviour, the role of delivered as addressable. broadcaster video-on-demand (BVOD) and the advertising opportunities emerging from this new world.

8.7 6. Gauge levels of openness 3. 6.5 to addressable TV advertising amongst viewers, explore the Shine a light on TV as an opportunities addressable advertising channel, exploring its presents the industry with role in a modern-day media mix as well as the challenges and explore TV adverts through and barriers to investment. the eyes of viewers.

12 13 Thinking Inside the Box In-home ethnography Exploratory viewer Eight observation sessions workshops in which we observed viewers The approach Six qualitative research watching TV (and ads) in the workshops across the comfort of their own homes. UK where viewers shared and research their thoughts, took part in individual and group activities, methodology and engaged in discussions. Online survey Thinking Inside the Box is a comprehensive study and polls pairing implicit and explicit research methods to A robust, nationally representative explore the perceptions of viewers and industry online survey of 1,507 viewers experts in a 360-degree view of TV in 2020. who all had a TV screen in their household and watched some form of TV or video regularly, and a series of nationally Depth interviews representative polls all via DRG’s online panel, Panelbase with industry (data collected December 2019 experts - January 2020). Eleven explorative depth interviews with industry professionals, including Neuroscience in advertisers, agencies, industry partnership with bodies and broadcasters. UCL professors An experiment designed and run in partnership with UCL consultants led by Professor Joe Devlin and Professor Daniel Richardson, both professors at University College London University. The experiment included 77 participants and explored differences in engagement by examining physiological and behavioural measures between participants who were shown addressable TV adverts and those who were delivered TV adverts as non-addressable as well differences in viewing on large and small screens. 14 15 Thinking Inside the Box

Section 01. Looking Outside the Box

The challenge, and the opportunity, for us is how to ensure that we are making the most of every opportunity with every impression. That means a combination of how to dial up the relevance to the individual viewer or the individual viewing context for every impression.

David Fletcher, Chief Data Officer, Wavemaker

16 17 Thinking Inside the Box. The advertising industry Section 01. - Looking Outside the Box

The overarching questions mix in the modern world core challenges that that this poses are how do is almost like learning a new the industry faces, The advertising advertisers take advantage recipe with ingredients you’ve with measurement solutions of new opportunities, optimise never cooked with before racing to keep up with spend, and accurately and just as you get to grips the advancement of the industry measure how effective their with the recipe, someone advertising industry. efforts have been? suggests adding another new spice to the mix. Leveraging TV plays a key role in To understand the evolving role of TV in the strengths that different the changes those in the a modern media-mix we began by looking channels present, and the advertising industry are facing, outside the box. We interviewed a number Increasing globalisation, specific moments generated with new opportunities, the ease and low cost by a multitude of media platforms and changing of industry experts, painting a picture of the of certain digital channels, touchpoints to reach behaviour arising as a spanner advertising industry in the UK in 2020. combined with a perceived consumers, as well as being in the works disrupting a tried Our discussions covered everything from focus on delivery and bold, capturing attention and and tested advertising model. measurement rather than creating emotional impact Understanding how traditional the burning questions which advertisers creativity, innovation and is a task facing the advertising and advanced TV advertising are seeking answers to, all the way to the imagination means some industry as a whole. fits into the modern media mix of the professionals that we is crucial to help advertisers new arsenal of opportunities to reach spoke to questioned whether Whether you’re an advertiser, navigate the changing consumers that brands and agencies have at there is a ‘crisis of creativity’. media agency, industry body TV ecosystem. their disposal. So, before we start Thinking Intelligently combining or media owner, the need different channels and new for a universal measurement Inside the Box and exploring where TV sits formats as part of a media system is one of the biggest, in the wider advertising eco-system, we asked industry professionals their thoughts on the advertising industry as a whole which identified key areas of interest.

Advancements in technology, exciting opportunities; from However, it’s not necessarily new platforms and devices, the ability to have one-to-one ‘out with the old, in with the data availability and the conversations with consumers new’, as industry professionals subsequent impact on through targeted advertising, were clear on the value consumer behaviour are just to crafting technologically of traditional channels with a flavour of the developments innovative and unique a feeling that the advertising which have led to a new world campaigns fit for the future. industry will mature into a fusion for advertisers to operate in. In addition, advertisers now of ‘old and new’, where new have new environments opportunities are better These developments have led to take advantage of and the understood and are added to a complex environment to ability to reach consumers to an enhanced arsenal that navigate and fresh challenges within different contexts that brands and agencies have for advertisers to overcome, weren’t possible before. to work with. but they have also provided

18 19 The advertising industry Thinking Inside the Box. Section 01. - Looking Outside the Box

How to ensure budget goes as far as possible and how What’s on to intelligently spend each pound in the right place to meet the industry’s different campaign objectives? Addressing the mind? How should ad creatives be designed most effectively for different channels and platforms – taking into account COVID-19 effect behaviour, usage and the context of the channel / platform?

How to create an efficient measurement system that doesn’t The advertising industry was already in just provide one piece of the story in isolation but gives the whole picture? a period of flux, and now, the economic and logistical constraints caused by the pandemic and the ‘new normal’ we find ourselves moving towards, means there may be more of a focus on the short term, with existing industry issues and developments having to take a back seat.

The creative is a fundamental element. I think one of the challenges we have in the digital age is we’ve made it easier

to make ads, unfortunately we’ve made The crisis does, however, when there has been logistical The pandemic has shone it easier to make crap ads. present some opportunities for barriers to production and a spotlight on the power advertisers and for the wider options are limited, and what of TV in the lives of the UK Simon Thomas, Global Director, Audience Research, Group M media sector. Advertisers have impact will the crisis have public, providing comfort, an opportunity to connect on the advertising and media entertainment, escapism emotionally and genuinely industries longer term? and a way to pass the time, support consumers through The general feeling is that no- as well as a way for advertisers this difficult time, and can one can predict the full impact to reach consumers with take advantage of falling costs of the pandemic and the messages of support and for advertising space and legacy it will leave, but there comfort. With TV slot prices shorter lead times for TV. is a sense of ‘going back having dropped during Brave marketers and brave clients For the media industry, times to basics’, with trust and the pandemic, the door of turmoil may be a catalyst common sense important in to TV advertising has been make brave work and brave work for changing ways of working the here and now. Despite the well and truly opened. stands out to be more effective. through a need to adapt. short term being important However, there are logistical during any crisis, experts spoke challenges around the Jem Lloyd-Williams, CEO, Mindshare UK During conversations with of how advertisers should try production of creatives industry experts, more questions to minimise longer term negative and critically, what should and areas of concern arose brand impact and sustain the tone of the message be? including; what the tone consumer connections through of communications should advertising when possible. be during this time, how to produce distinctive creatives

20 21 Addressing the COVID-19 effect Thinking Inside the Box. Section 01. - Looking Outside the Box

Challenges Consumer trust Uncertainty and economic constraints Trust in advertising was generally felt to be Producing creatives at an all-time low from the perspective of industry experts. Viewers and professionals 52% Getting the tone of the noted that ‘hypermarketed’, ‘creepy’ and saw personalised message right ‘re-targeted’ advertising may have been advertising as damaging for the industry. There’s a danger in intrusive Changing behaviour ‘assumed knowledge’ and that bombardment can be overwhelming. Some consumers felt that the way their data was used was laughable and, rather than being relevant, Opportunities can be down-right annoying.

Cost of ad space dropping

Adapting, innovation and new So, where is the sweet spot want to feel as if they have but, if personalised ads give ways of working between subtly creating lost all sense of control. them a useful insight stronger connections with ‘My Alexa definitely listens and are deemed as helpful audiences vs. alienating to me’ was a common (whether this be knowledge Quicker lead times consumers? This is a question conversation during this of a new product or deal), that the world of advanced TV research and getting the then perceptions in turn must consider in order to plot execution of personalised are less negative. a course to a positive market advertising wrong can Personalised advertising in which the trust of viewers be scary and inhuman, is seen as a double-edged is not compromised. a contradiction to the emotive, sword; it presents a data creative and innovative ads led opportunity to reach Although we live in a world that professionals told us that consumers one-to-one and I think there’s going to be a pressure on of personalisation and clicking brands should be striving for. drive short term activation, budgets and that will force people to be more ‘yes’ to cookies is as regular but trust is a key issue. of an occurrence as brushing Consumers often don’t want innovative and creative with the money that our teeth, whilst consumers to be chased around the they’re actually spending. reap the benefits of living in internet by ads showing the a data-led world, they don’t suitcase they bought weeks ago, Richard Marks, Research Director, Research the Media

22 23 Consumer trust Consumer trust

A flip of a coin reflects the to advertising in general, Which of the TV 29% odds that someone in Britain 25-34-year olds were the most doesn’t trust advertising, likely to explicitly express following types with 50% not trusting any positive sentiment for TV of advertising do Magazine / Press 5% key channels. However, TV advertising, with 37% trusting you trust the most? was the runaway winner the “magic box” the most. OOH 5% of the most trusted channel [Results from self selected sample award, with five times as When it comes to the future who partook in a Panelbase MiniPoll™. Base: Weighted to UK Nat Rep Cinema 5% many respondents choosing of TV advertising, or indeed sample (1212)] it as their most trusted more personalised or targeted channel compared to the solutions through any Radio 3% runner up. Perhaps ‘lived channel, it’s important that experience’ is playing personalisation isn’t ‘taken a part, with a clear increasing too far’, ensuring that Online 3% lack of trust amongst older audience trust in traditional adults. Although 16-24-year channels isn’t compromised. I don’t trust any of these types of advertising 50% olds were the most open

% of each age group who told us they The inherent challenge we have didn’t trust any forms 70% with the advertising industry at the of advertising moment, is the lack of trust, which is Results from self-selected sample who It feels really partook in a Panelbase MiniPoll™. a huge challenge on ISBA’s agenda. inhuman. Base: Weighted to UK Nat Rep sample (1212) 55% 50% Bobi Carley, Head of TV and Video, ISBA Consumer 49%

34% 35%

Sometimes it’s handy but other times it’s scary.

Consumer

16-24 25-34 35-44 45-54 55-64 65+

24 25 Thinking Inside the Box. TV in a world of streaming and online video Section 01. - Looking Outside the Box

From a viewer perspective, TV mindless scrolling is a waste TV in a world is seen as reliable, regulated, of time with parents unable and with high production to comprehend why their value content. However, it is children are so drawn to random also less personalised with online videos. However, youth of video more generic programming audiences do seem to be compared with online video, attracted to the personalised, The internet has been a game changer which is perceived as quick, raw, real content that they easy, random, raw, personal, can find online, whether this for the advertising industry, providing a space unregulated and a real mixing is a vlogger discussing niche for video creatives and to reach people in pot of content. topics of interest, or kids watching other kids opening a new context. Before we start Thinking Inside There was a strong, positive presents. After ‘entertainment’, the Box, what are the comparisons between TV emotional relationship between ‘for education or information’ and online video when both have the strengths viewers and TV; with TV was the second highest driver perceived as higher quality for watching YouTube amongst of sight, motion, and sound and what are their content than online video. viewers. But, for 16-24 year olds, differing roles in the media mix? There is clearly a stigma the hierarchy of drivers for around excessive use of online YouTube viewing is more akin video and the perception that to those cited for linear TV viewing.

How consumers engage and environments consumers to hover over with channels and consume for advertising to sit within. the skip button, ready to click content across media touch When it comes to TV as soon as possible. points should be considered. and online video, usage Advertisers have the is different, suggesting It’s not a level playing field. opportunity to take advantage advertisers should play TV and online each have their of the context of different to the strengths of each own strengths; with the online channels (and even different as an advertising channel. environment known for reaching opportunities within channels) more targeted audiences with and how their consumers There are stark differences simpler measurement and TV or potential consumers are between how people feel championed for being a quality using them. For example, about and use TV compared environment which is brand watching Sky Go on a tablet to how they browse or watch safe and where you can reach while cleaning the house, content online (or even mass audiences. Creatives sitting around the TV screen generally feel about each should be tailored to suit with the family to watch as an advertising channel). these different environments, a Saturday night favourite, It’s felt that the ‘value exchange’ with each used appropriately watching a favourite vlogger of advertising on TV is more for different objectives. on YouTube or quickly flicking universally accepted, whereas Ultimately, online video isn’t on a beauty tutorial online the ‘interruptive model’ a replacement to TV, but a are all very different contexts presented online has primed different opportunity entirely.

26 27 TV in a world of streaming and online video TV in a world of streaming and online video

YouTube - viewing For entertainment 70% / 70% How much do you drivers agree or disagree 76% 74% 72% 57% For education/ information 39% / 34% that each of the All monthly users following you view 16 - 24 year old monthly viewers provides quality SVOD BVOD Linear TV Online video To relax 37% / 47% grouped * content? [Base: Those who use YouTube monthly or more frequently users (1,114), 16-24 year [Base: Those who use the platform monthly old monthly viewers (192)] or more frequently – SVOD (976) BVOD To pass the time 37% / 46% (1,153) Linear TV (1,376), *Online video grouped (view YouTube, other online video or social media vids at least monthly (1,200)] To escape 19% / 25% NB: Online Video = at least one of YouTube, social media videos or other online videos I see TV differently compared to Netflix Out of habit 11% / 19% and YouTube and all these things, I think probably kids would think totally different, just because of how they’ve To have on in the background 11% / 24% been around for their whole life so it’s not been a new thing for them. To feel part of a community 9% / 16% Viewer

To be part of conversations in person or online 8% / 9%

To spend time with others 6% / 8%

Netflix and ITV… they’re more for entertainment whereas with YouTube it’s very informative and can also be educational.

Consumer

28 29 TV in a world of streaming and online video TV in a world of streaming and online video

The industry has looked to other video platforms One of the weaknesses of TV as a channel to plug the reach gap left by TV. I guess, fooled by is the ability to identify individuals and be able what on paper looks like a comparable means of to talk to people one to one. If we look at YouTube, driving reach amongst target audiences through they have data about who is on their portal and more using the likes of Facebook video or YouTube. often than not it’s consumed on a PC or a mobile. Therefore, you’re more likely to be talking to Matt Hill, Head of Research and Planning, Thinkbox an individual rather than several people, meaning you can be even more precise with your targeting than perhaps than you could on traditional TV.

Emma Moorhead, Head of AV Planning, Wavemaker I love YouTube, I think TV might look down I don’t think I could its nose at it [YouTube]. live without it. There’s so much guff and It always has nonsense of people just something on there doing silly things. YouTube is leading for me to watch. Viewer you and you’re not Viewer leading YouTube.

Viewer

30 31 Thinking Inside the Box

Section 02. The role of TV

32 33 Thinking Inside the Box. What is TV? Section 02. The role of TV

What is TV?

It may have been seen as a box in the corner of the living room in the past, but fast-forward to 2020 and 60% of viewers felt their I think a sixteen-year-old would see perceptions of TV have evolved and consider me as out of the dark ages, because it as something different to five years ago. you used to have channels BBC, BBC 2, STV and then I remember when we got Channel 4 and it was a right big thing.

Accessing TV has never been Whilst the industry although they see their kids Viewer easier and with VOD platforms professionals we interviewed using the TV set more broadly, becoming a staple part agreed that TV is any they weren’t too concerned of modern viewing and more professionally produced about catching up. Some felt and more players entering premium content, viewers smart TVs could be clunky the market, TV is no longer were more uncertain and and difficult to use, whereas just seen as a physical entity, divided. Things aren’t as getting online on a personal but online, digital, and cross clear for viewers and the device is so simple and easy. For the industry, TV is device. Viewers described broadcaster brands are very linear TV as ‘normal or much part of the modern notion From an industry perspective, about the content and traditional TV’, but if it’s not of TV, with BVOD perceived TV content is regulated, brand ‘normal TV’, then what is it? as TV by most, but just over safe, professionally produced what it was produced half categorising SVOD as TV. and designed for viewing on for rather than how There isn’t a simple answer The lines are blurring for them a big screen, highlighting the and although behaviour but not solidified yet. unique environment of TV viewers access it. is changing, viewers don’t have as an advertising channel. a collective idea of what TV is A stark generational difference Some thought that SVOD would in the modern world. For some was apparent when parents eventually become advertiser it will always be a physical box, put themselves in the mindset funded and that currently SVOD watching live TV or strongly of their kids. Parents felt their within the TV landscape is connected to the home and children see TV through an another entity fuelling changing British broadcasters, but, altered lens and use it very behaviour and the evolving for others it’s something much differently, with some kids even nature of TV (with a broader more fluid and expansive. shocked that TVs aren’t touch definition of what TV is), Even though online video screen. While parents think meaning that capturing viewer primarily fulfils the entertainment they’re not getting the most out attention is more challenging. need, entertaining video content of modern TVs, their kids can isn’t enough to get into the use it as an extension of their exclusive TV category with only personal device to get online. 11% of viewers classifying some There was a sense of form of online video as TV. acceptance amongst parents;

34 35 What is TV? What is TV?

Which of the BVOD SVOD Online None following would video of these you define as TV?

[Base: All respondents (1507)] TV Traditional NB: Online Video = at least one of YouTube, social media videos or other online videos 74% 53% 11% 16%

I now consider catch up and YouTube as TV as well whereas 5 years ago it was only broadcast TV.

Viewer

What we classify TV as is premium, professionally produced content. SVOD absolutely is TV. I think also from an advertiser’s point of view you would consider regulation as being a part of TV, it’s about knowing what type of content you are advertising within.

Matt Hill, Head of Research and Planning, Thinkbox

It’s weird now because the gaps are getting blurred between what is and what isn’t.

Viewer

36 37 What is TV? What is TV?

The broadening of TV has This is underscored by viewing to different platforms and If you could only choose one of given rise to changing patterns figures, with more than half devices. Industry professionals of behaviour, with 57% feeling of our sample identifying that felt that there can be hyperbole the below to watch content on, as though the way they view they watch more than 3 hours around changing viewing which would you choose? TV has changed in the past of TV per day and echoed behaviour; although things five years. Although they might in industry professionals’ |are changing, not all 16-34s not agree whether viewing perspectives that there is a clear are only watching on-demand. through connected services, shift in how TV is accessed From Love Island and Strictly on smaller devices and via and perhaps a greater appetite Come Dancing to sporting subscription services is ‘TV’, for content than ever before. events, programmes that create viewers can’t get enough shared moments across of the never-ending stream The choice and power that the nation and provide that of TV content. Viewers spoke viewers have over how, inclusive feeling of being part about TV as if it was a drug, when and what they view, of the conversation are suited using language from ‘binging’ as well as more and more to live viewing, while others, to ‘addiction’. ad free viewing options, whether it be dramas, soaps or gives them a sense of control documentaries are appropriate TV is no longer about being over their TV consumption to watch at a later date. ‘governed’ by a schedule, that is completely different having to sit through to the traditional notion More expansive viewing programmes you’re not of TV that many of the viewers portfolios means more interested in with family, we surveyed grew up with. advertising opportunities, or even just confined to But not all viewing is equal. and with fewer 16-34s viewing the house. When we asked As previously outlined, linear TV, reaching them viewers to describe their viewers are gravitating to at the same scale is a big All respondents 16 - 34s 34 - 54s 55+ viewing habits, responses different aspects of TV for challenge for advertisers. were varied, individualised different needs and certain and lengthy! viewing moments are suited TV (Linear, BVOD, Set top box recorded)

60% 30% 57% 87%

SVOD

28% 48% 30% 9%

Online Video

13% 22% 13% 4%

[Base: All respondents (1507), 16-34s (458), 35-54 (499), 55+ (550)] NB: Online Video = YouTube, social media videos or other online videos grouped

38 39 What is TV? What is TV?

Those who have different viewing Weekly or more All respondents 16 - 34s frequent viewers preferences, whether that be linear, Linear 87% Linear 77% of each platform BVOD or videos online are driven to these platforms by different viewing [Base: All respondents (1507), 16-34s (458), BVOD 60% BVOD 68% 35-54 (499), 55+ (550)] NB: Online Video need states, meaning each provides = YouTube, social media videos or other online videos grouped] a unique advertising opportunity to reach SVOD 57% SVOD 81% consumers in different states of mind.

Online video 71% Online video 93% More affluent viewers were content, the seeds significantly more likely of frustration could also be to choose paid SVOD services seen with more choice as their top choice compared meaning more decisions and 35 - 54s 55+ to those from lower affluence effort from their perspective. households (34% vs. 21%) ‘Traditional TV’ seems to be Linear 86% Linear 96% and it’s important to note that a way to keep things simple a lot of viewers don’t have in a complicated world, an unlimited budget to pay for with linear and BVOD chosen BVOD 66% BVOD 50% a never-ending list of different as favourites for being ‘easy services. Although viewers to use’ significantly more so SVOD 66% SVOD 29% see the personal benefits than SVOD (13% vs. 7%). of a boom in platforms and

Online video 79% Online video 44%

Linear TV provides a unique, At the other end of the as a clear winner. There are, in-the-moment viewing spectrum, online video however, stark differences experience to watch live provides variety and niche, in preference between and be part of a shared less regulated content which generations. moment with millions makes it a top choice for some. of others, with sport and This again suggests reality especially suited Many viewers have emotional a changing world where younger to this environment. relationships with linear TV, generations don’t have the BVOD allows the broadcaster formed by years of habit and same emotional connection to offer content that viewers experiences and amongst the with and loyal relationship know and love to be available total sample, if they had to ‘traditional’ TV as older in a more convenient to choose between TV and generations, having grown up and accessible way. online video, TV came out with more choice and control.

40 41 What is TV? What is TV?

Viewing drivers for those with preferences for Advertising in general is not necessarily taking TV/video advantage of the golden age of television, Linear Youtube BVOD SVOD some of the actual advertising itself is absolutely outstanding but I think the general standard For entertainment is not taking advantage of the content in which 81% 78% 75% 87% it’s being distributed. To relax

Jem Lloyd-Williams, CEO, Mindshare UK 72% 61% 60% 72%

To pass the time 39% 50% 25% 37%

For education/information 32% 55% 22% 17% It would cost a fortune to subscribe to

Sky, Netflix, Amazon Prime, BritBox, etc. To have on in the background 26% 19% 10% 18% Viewer

Out of habit 32% 19% 9% 11%

To escape 27% 36% 27% 39%

To spend time with others 22% 11% 17% 30%

To be part of conversations in person or online 7% 15% 5% 13%

To feel part of a community 4% 17% 3% 7%

[Base: Those who chose each as their preferred way of viewing video and use at least monthly. Linear TV (448), BVOD (153), SVOD (418), YouTube (172)]

42 43 What is TV? What is TV?

[My child] He’ll watch a lot of nonsense like flicking I enjoy the reality to it. It is more through Facebook and he’s watching all of these enjoyable as a viewer since it seems It just feels like videos and random clips, it just doesn’t interest me. like they are directly talking to us. I’m part of the I see the utter rubbish that sometimes is on YouTube It is fun and enjoyable to pass time nation all viewing especially at the weekend with my niece, she was and educate myself. together.

watching people like opening pencil cases, it’s just Viewer (chose YouTube) Viewer (chose Linear) that kind of nonsense.

Viewer

You have the choice of what to watch and when to watch. Mainstream channels are still I find the programmes For me it was a no the best and I need to watch the news. more interesting and brainer so to speak. I love Viewer (chose BVOD) entertaining than the YouTube, I don’t think I normal television which could live without it. It seems to be the same always has something on old same old. there for me to watch.

Viewer (chose SVOD) Viewer (chose YouTube) I can watch my favourite programmes where and when I want to and can dip in and out of it and it costs me nothing.

Viewer (chose BVOD)

44 45 Thinking Inside the Box. Thinking Inside the Box. Section 02. The role of TV Section 02. The role of TV

A modern A day in the take on TV life of a viewer

Watching content at home is evolving and no longer just about being gathered around a TV set being governed by a schedule or being forced to watch another household member’s choice. With personal devices We don’t use the word “television” anymore, and the ability to access TV online and we talk about premium video. Premium video has a through a wide variety of platforms, viewers relationship with consumers that watch it and different spoke about lone viewing and fragmentation groups of consumers have different relationships within their households. Not only this, but around whether they are prepared to watch advertising TV is now an accompaniment to cleaning, or not, or whether they have the disposable income cooking, exercising and other activities, to buy subscription services or not. easily transportable and with so much easily Simon Thomas, Global Director, Audience Research, Group M accessible, easy to watch content available that doesn’t require viewers’ full attention.

TV is still a pivotal part of the TV has spilled out of the Viewers are now able household with family movie house and can now be to mould all of these different nights and shared viewing watched while commuting, viewing opportunities to their experiences still a big part of waiting or at work, again own schedules, preferences modern life. The importance facilitated by the never-ending and needs and with TV still of these moments is clear, catalogue of content. This has changing and developing, with an unspoken rule that also led to evolving viewer will there ever be an agreed those treasured shared shows needs, with binge-watching concept of what the new should never be watched alone. common and changing ‘normal TV’ is? These dedicated moments, expectations meaning viewers in which viewers want to fully don’t want to wait a week engage with TV, are suited to for the next episode of their the big screen and often bring favourite dramas. busy households together.

46 47 A day in the life of a viewer A day in the life of a viewer

What does this Although broadcasters are trying to play catch-up with the SVOD model that youth audiences are drawn to, SVOD takes mean for the viewers away from ad-funded platforms and the crowded TV landscape means people’s attention is in short supply. industry? It is harder to reach younger audiences via traditional TV The bulk of viewing is still on linear cost effectively and fragmented viewing has driven prices up. television but that is not necessarily As behaviour evolves, advertisers crave new knowledge the case for the audiences our and want to understand how these different viewing moments clients want to advertise to. can be used successfully to meet different campaign objectives and how advantage can be taken of the modern TV Simon Thomas, Global Director, Audience Research, environment, from the quality content, multitude of viewing Group M moments and emotive, trusted environment.

48 49 Thinking Inside the Box. Living up to expectations – everything on-demand Section 02. The role of TV

Claimed linear vs. Daily 61% / 12% Living up to BVOD viewing expectations – Linear BVOD 2-3 times a week 15% / 26% [Base: All respondents (1,507)] everything on- Weekly 10% / 22% demand Fortnightly 2% / 7%

On-demand viewing of broadcaster content Monthly 2% / 9% is no longer a nice-to-have or a way to occasionally catch up when an unexpected Less regularly 5% / 14% late night at work means missing the latest episode of EastEnders, it is now a staple part of how the British public are consuming Never 3% / 9% content, with 60% watching BVOD at least once weekly. It’s become an expectation, and the majority of respondents we spoke to classified it as TV.

We saw lower percentages view daily. BVOD seemingly driven to BVOD to ‘pass the fits the dedicated, considered time’ or ‘out of habit’ compared viewing occasion well, providing to linear TV. This is paired with the flexibility to watch what lower percentages watching viewers want, and most very frequently – another importantly, when they want it. distinction from linear viewing where very high proportions

50 51 Living up to expectations – everything on-demand Living up to expectations – everything on-demand

Viewing drivers for For entertainment 73% / 74% linear and BVOD

Linear BVOD To relax 62% / 50% Advertisers need new, cost-effective solutions

[Base: Those who use each monthly or more to reach their target audience which can be frequently – Linear (1376) BVOD (1153)] To pass the time 38% / 29% achieved by finding the right mix of linear TV and broadcaster VOD.

For education/information 27% / 17% Matt Hill, Director of Research and Planning, Thinkbox

To have on in the background 27% / 10%

Out of habit 26% / 9%

To escape 25% / 20%

To spend time with others 23% / 15%

To be part of conversations in person or online 8% / 6%

To feel part of a community 4% / 4%

52 53 Thinking Inside the Box

Section 03. Left to your own devices

I just think that the children are so far advanced now with the TV… I mean they do things and I don’t have a clue what they’re doing.

Viewer

54 55 Thinking Inside the Box. The device diary – Section 03. Left to your own devices the role of big and small screens

The device diary I was thinking between me and my son, if someone – the role of big said to me, “Would you rather someone took the TV away or took the iPad away?” I’d say just take the and small screens iPad but he’d say, “Just take the TV.” I don’t think they [kids] have the same relationship with it. The ease of accessing TV on smaller devices in today’s world means smaller devices are Viewer a fundamental part of modern viewing.

For many, viewing on smaller, As the big screen embodies the media, viewers can feel as personal devices doesn’t traditional idea of TV it comes though it’s harder to focus on replace big screen viewing, with emotive and positive ties. the content in the same way but is an addition, allowing Pairing this with the relaxing, as it is on the big screen. Devices used to people to expand their viewing escapist environment its content watch BVOD across the day in different can create, viewing on the big Although under 35s were more [Base: Those who view BVOD monthly contexts and environments. screen isn’t a comparable likely to be viewing TV on or more frequently – (1153), 16-34 (388), There is also a clear sense experience to watching on personal devices compared 35-54 (397) 55+ (368)] Television Laptop Tablet Mobile Desktop of convenience linked a smaller device. The TV screen to older viewers, the majority to viewing on smaller devices, is seen as a key feature in the are also still using the big particularly for online video home, and a focal point in the screen. However, parents All monthly users but also for TV. You can watch living room, equated to a fire told us their children have when out and about, use to in olden times. strong connections with their 80% 25% 19% 14% 10% watch more personalised personal devices and don’t content or to watch something With smaller screens having have the same draw to the TV different to other members many other distractions, from screen as they do. 16-34 monthly users of the household. emails and texts to social

72% 36% 24% 28% 10%

35-54 monthly users

83% 24% 20% 14% 10%

55+ monthly users

85% 15% 14% 1% 9%

56 57 The device diary – Thinking Inside the Box. the role of big and small screens Section 03. Left to your own devices

Preferential treatment

Out of those who claimed to watch content across more than one device, TV came out I think if you’re sitting down to watch TV, you’re as the preferred device by far for viewing solely watching TV, whereas if you’re sitting on it. More than twice as many Londoners a laptop you can easily within five seconds be off chose mobiles as their favourite compared watching a DVD or be on Facebook. to the average, potentially due to busy lifestyles, house sharing and greater Viewer use of public transport. However, for video content responses were more varied, influenced by ease of access via small devices and tarnished with experiences of difficulty accessing online content via smart TVs. Despite the barriers, 27% of those who watched YouTube at least monthly did so on their big screens.

TVs are firmly rooted in our futures, although viewers think they will get bigger and bigger, projectors will become the norm and just like kids currently expect, touch screen TVs will be the next big thing.

58 59 Preferential treatment Thinking Inside the Box. Section 03. Left to your own devices

Is content I would Linear TV BVOD SVOD Online video* rather watch on Ads on the the television (NET agree) TV screen [Base: Those who use the platform 79% 67% 64% 26% monthly or more frequently – SVOD (976) BVOD (1,153) Linear TV (1,376) *Online With big screens continuing to be such a core video grouped (view at least one of YouTube, other online video or social part of TV in the modern world, there are media video at least monthly 1200) NB: Online video = would rather watch differences in the drivers for choosing to sit down any of the three on a TV screen. *% who agreed that they would rather in front of a big screen at home compared watch at least one of YouTube, other online video or social media on the TV] to the add-on viewing moments of smaller screen viewing. Although it was clear that viewers don’t feel smaller screens are a replacement for their TVs and explicitly told us they use them 85% differently, we wanted to understand how this It depends what programme. I mean impacts engagement with advertising. Felt they would I don’t mind watching The Apprentice always have a TV on my phone or on the tablet because in their house it’s The Apprentice. But something like [Base: All respondents (1507)] Game of Thrones there is no way I’m 70 watching that on the phone because you want to submerge yourself, you want the big screen. Our neuroscience module presented on a large screen, results found significant as opposed to a smaller, Viewer evidence that those viewing handheld device. This is on larger screens had lower consistent with previous heart rates compared to those studies that have found large watching on smaller devices. screens to be associated with Studies have demonstrated better memory for the material lower heart rates are associated (Detenber & Reeves, 1996), with a greater external focus a greater feeling of immersion and increased ability to encode (Baranowski & Hecht, 2014; external information. TV ads Lund, 1993; Troscianko, Meese, were also recalled more & Hinde, 2012), and more accurately when they were attention and arousal (Reeves, Lang, Kim, & Tatar, 1999).

60 61 Ads on the TV screen Ads on the TV screen

Consistent with the explicit no evidence that they were memory results, people were more certain in their significantly faster to respond recall answers between to ads they had previously those viewing on big and seen when they were presented small devices. on a big screen, but there was

Screen size

60000 We recorded the trajectory of mouse movements from the initial “Ready” position 40000 until the participant Screen size Screen size made their choice. The 0 0.8 96.6% difference between the 20000 measured trajectories and a straight line to the Trajectory complexity Trajectory 0.6 response was an indicator 61.8% of uncertainty with more -2 0 complex paths indicating Big Small 0.4 greater uncertainty. Mouse tracking results showing no Accuracy Heart rate evidence of a difference in trajectory routes when participants were 0.2 responding to questions about ads -4 shown on big or small screens. 81.2% 0.0 Big Small Big Small

Note: Scale is negative due to normalised heart rates Screen size

Heart rates were significantly lower There was some evidence ads were 2000 when shown on a large screen remembered better when they were compared to a smaller device, presented on a large screen, as suggesting greater external focus and opposed to a handheld device. 1500 increased ability to encode external information when viewing the ads on a Accuracy is an explicit measure Response times during the memory test. 1000 big screen. of participant’s memory for the These provide an implicit measure with ads they have seen with higher faster responses indicating better memory Reaction times because participants have to work less hard accuracy indicating better 500 recollection. to respond correctly. Here lower reactions times can be seen for those viewing on 95.2% 0 bigger screens compared to smaller. Big Small

62 63 Ads on the TV screen Ads on the TV screen

Using mouse The user then had to move the trajectory of mouse their mouse curser to the movements from the initial trajectories “ready” button to proceed “Ready” position until the to the image, ensuring participant made their choice. to assess the mouse always started in The difference between Screen size, quality and it cognitive the same place on the screen. the measured trajectories and Feels more homely The subsequent still image a straight line to the response ‘feels right’ to use the TV screen. engagement. had two response buttons was an indicator of uncertainty In addition, I sometimes need when watching (yes/no) in the bottom corners with more complex paths to work on my laptop while things on television. of the screen. We recorded indicating greater uncertainty. watching TV so using it for videos More importantly, isn’t helpful or desirable. the screen is bigger!

Viewer Viewer

I think sitting on my couch watching TV, on the big TV, I’m relaxed and I’m winding down, whereas my phone is kind of on the go, I’m kind of just watching something quickly to stick it back in my pocket.

Viewer

64 65 Thinking Inside the Box

Section 04. TV advertising

There’s an opportunity to put a lovely piece of beautifully crafted television advertising in front of people who are watching quality content and to hopefully affect them emotionally so that they decide to buy your product either there and then or in the future.

Jem Lloyd-Williams, CEO, Mindshare UK

66 67 Thinking Inside the Box. Playing to one’s strengths – Section 04. TV advertising the power of TV ads

Playing to one’s You remember the TV There’s a strengths – ones more. story. the power of Viewer Viewer TV ads

When it came to ads, industry experts Other described TV as a unique channel, with considerations the ability to build brand equity and the power of being able to speak to masses Industry professionals for teams to flex in line with at the same time setting it apart. Traditional highlighted a perception that changes in the industry. TV advertising is expensive, strengths of reach and scale are combined and with longer lead times this Reflecting wider advertising with a brand-safe environment amongst can lead to a harder sign-off, industry challenges, some felt especially when compared creatives on TV weren’t like quality, trusted content meaning it offers to channels that are perceived they used to be, with less advertisers a platform for a variety to offer more immediate results. imagination and creativity of campaign objectives. However, it was felt TV can compared to the past. and should be used for short Professionals felt it was crucial term activation as well as to get the creative right, taking brand building. advantage of the unique TV advertising has the Developing technologies context that TV provides. power to make people are opening doors for TV There are clear challenges feel something, with the ads to address targeted around reaching younger Cross-platform measurement interplay between music, groups and reach niche audiences in a cost-effective in the TV industry is currently imagery and humour audiences, but at such way and there is a lack of one of the gaping holes in making an emotional an emergent state it’s not knowledge around BVOD’s addressing the challenges impact possible as well as without its challenges. place in the TV mix and how raised and ensuring providing a space to tell to use it to its full potential. effectiveness and optimisation. a story either in a single More widely, the changing This in turn makes decisions creative or sequentially nature of TV means a lack on spend and channel harder, over time. of insight around how new and technical complexities opportunities can be optimised can still be a barrier. TV offers advertisers and there are requirements a range of diverse opportunities and is more accessible than ever before.

68 69 Playing to one’s strengths – Thinking Inside the Box. the power of TV ads Section 04. TV advertising

How do viewers

It’s a question of focusing on what TV does best. It really is consistently shown to be a very strong feel about TV ads? brand building medium; it builds fame for your brand, it makes people know who you are and what you are. But, there is that big hole of much younger audiences that needs to be filled Viewers are very familiar with advertising by using other media channels. but are beginning to become more aware of ad-free platforms. This is putting the sense Richard Marks, Research Director, Research the Media of acceptance around sitting through TV ads at risk, meaning capturing attention through advertising on TV is harder. Viewers expect to see the big brands on TV, from supermarkets to car brands, with ads that are ‘made for the masses.’ The thing that I think we’re all struggling with is measuring the efficiency and effectiveness of digital advertising.

Gideon Aroussi, Senior Planner, Bray Leino

There are clear, distinct Even though many said they personas when it comes to skip or try to avoid them, attitudes of ads on TV. ‘Ad people talk passionately about avoiders’ will do all they can certain TV ads and easily to escape ads – they want to entered into a discussion feel in control at all times - about ads they’ve seen. while others sometimes enjoy Viewers see some as ‘random’ watching them as a way to and don’t see the link to the stay up to date and discover brand or product, but there is new products, whereas some clearly a power in TV advertising accept them as part of life, with some describing it as but would rather only see ads iconic and entertaining. that they consider to be ‘good’.

70 71 How do viewers feel about TV ads? How do viewers feel about TV ads?

What do viewers The creative is key to capturing clear way to create enjoyment. What makes Funny 73% attention and viewers believe This is true especially in want from TV ads? that the power of a TV ad stems uncertain times, with viewers a great TV ad? from the story it tells. Viewers keen to see advertisers using Creative 57% [Results from self-selected sample who crave positivity from TV ads, positive, genuine messaging. partook in a Panelbase MinipollTM . and humour is the absolute Base: Weighted to UK nationally Unique 43% representative sample, subset of those open to TV advertising (668)] Inspirational 34%

Socially relevant 28%

Emotive 25%

Diverse 16%

Celebrity stars 8%

16% 24% openly stated they recall taking enjoy watching action (e.g. buying TV ads a product, or having a conversation) after viewing a TV ad

[Base: All respondents (1507)]

72 73 How do viewers feel about TV ads? How do viewers feel about TV ads?

What about Humour is a way to connect more likely to choose diverse with viewers and was the top (23% vs. 16%) and celebrity different chosen creative characteristic stars (14% vs. 8%) compared to generations? across all ages. the average. Those aged 45-54 I just don’t like adverts, it’s like they’re I think if an advert were more likely than average just too much on telly, just constant. 16-24 year olds were to want creativity (67% vs. 57%) is good it stays significantly more likely to and emotion (33% vs. 25%). It drives me up the wall. with you forever. think positively about socially Londoners were significantly relevant TV ads compared to more likely to want a dose Viewer Viewer the average (48% vs. 28%), of inspiration (49% compared while 25-34s were significantly to the 34% average).

If you can get the adverts right, I think it’s still got a place.

Viewer

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74 75 Thinking Inside the Box

Section 05. Appetite for addressable

76 77 Thinking Inside the Box. The role of addressable Section 05. Appetite for addressable

The role of addressable I think addressable TV will revolutionise the world of TV and at the moment it’s being We’ve seen that the concept of TV is changing, done in bits, but it’s still got a long way to go. behaviour is changing, and viewers expect Emma Moorhead, Head of AV Planning, Wavemaker the future of TV to be exciting and technologically driven, so what role will addressable advertising play in the new era?

From an industry perspective, advertising isn’t a widely to advertise on TV. The ability What would make If it was a product that I’m looking for right now 45% addressable TV was largely known concept from to target potentially control a TV ad feel relevant seen as a positive and a consumer point of view. frequency means brands are If it was a product I might be likely to need or want in the future 44% something that will be part Across multiple sessions, able to tell a longer, more to you? of the future, underscoring viewers mentioned that they controlled story and, therefore, [Results from self-selected sample who If it was a brand or product related to my lifestyle 39% the strengths of TV as a channel. would like to be able to select in the future people might partook in a Panelbase Minipoll™ . There is a lot of work to be the types of ads they would have to sit through fewer ads. Base: Weighted to UK nationally representative sample, subset of those done in terms of knowledge be interested in and then open to TV advertising (668)] If it was a brand or product related to my hobbies or interests 39% development across the be served relevant ads based Viewers are open to the idea industry and communicating on their preferences. of addressable, but their If it was a brand I love 36% to advertisers how they should lack of knowledge about use addressable effectively. Industry professionals the execution makes it hard Some felt that addressable will cited many opportunities for them to articulate their If it was a brand or product related to my household 34% complement linear rather than that addressable TV offers, feelings and many sat on replace it, allowing advertisers from extending the reach the fence. Tying into the idea If there was current music I like 30% to use the strength of TV of traditional TV or building of craving positive creatives, and reach more targeted incremental reach, to creating the idea of location specific audiences in one fell swoop. relevance and reaching ads or smaller businesses If the ad had music from my childhood 28% different consumers with on TV were seen a positive. Viewers spontaneously different messages. Viewers want ads that they think If it tackled a relevant social issue 27% spoke about how they felt They felt addressable meant are relevant, but as a subjective disengaged with ‘irrelevant’ campaigns could be planned concept what does relevance ads and their tolerance around more specific audiences actually mean? As well as ads If the actors were relatable 24% of TV advertising is changing. (including behavioural or that address their immediate People also expect to see more at a point along the purchase or future needs, viewers also If there was a celebrity in it that I like 14% personalised advertising on TV journey) and that it throws seem drawn to the idea in the future, but addressable open the door for more brands of creative relevance.

78 79 The role of addressable Thinking Inside the Box. Section 05. Appetite for addressable

Appeal of adverts on TV Appeal of adverts on TV tailored to location tailored to lifestyle/interests Addressing knowledge gaps 21% 23% 37% 34% With any new opportunity there comes a number of challenges from an industry perspective and barriers to investment.

42% 42%

NET Appealing NET Unappealing Neutral

It’s clear that viewers are concerned about the execution of addressable TV ads, having little understanding of how it works, how their data is being used and what’s in it for them and having general negative connotations with ‘personalised’ and ‘targeted’ ads. Around 4 in 10 felt neutral on the idea, with the line between relevance and helpfulness and intrusive key.

16-34s were the most likely Those with children were age range to consider location significantly more likely to find 1 in 3 specific TV ads to be appealing the concept of addressable (28%) with older generations TV to be appealing and to trust Addressable advertising is, how it works, how it felt they would be significantly less sure. TV advertising more than is perceived to be expensive should be measured more likely to watch The same trend can be seen other channels compared and there are questions and how to use it effectively. for ads tailored to lifestyle to those without children. around whether there is such This lack of transparency TV adverts if they or interests, with 33% Potentially TV is seen as a safe a thing as wastage for big means advertisers are were relevant to them of 16-34 year olds finding and regulated space for families brands. There is a distinct lack cautious about investing the idea appealing. to enjoy entertainment. of education and knowledge without understanding how (Base: All respondents (1507)] of what addressable actually to optimise its use.

80 81 Addressing knowledge gaps Thinking Inside the Box. Section 05. Appetite for addressable

Measurement How to prove addressable has had the desired impact? The experiment How to show addressable has reached new or previously unreached audiences? We designed an experiment that used The plots in this section come How to measure addressable as part of a wider media mix? from a Bayesian mixed model both explicit and implicit measures of analysis and reflect the strength engagement based on a combination of of evidence of a difference behavioural and neurobiological measures between those for whom ads were viewed as addressable How are addressable ads bought? in partnership with UCL professors. compared to those that were Knowledge The aim of this study was to investigate not addressed to them. How does addressable technically work? how viewers psychologically process 90-100% How should addressable be used in conjunction with linear? TV advertising. Specifically, we looked to = strong evidence of establish whether or not an ad that was a difference What data should be used as part of an addressable campaign? targeted to the interests/lifestyle or specific 70-89% point along the purchase journey of the = some evidence of a consumer (addressability) and whether that difference ad occurred during large or small screen 50-69% viewing (screen size) had an impact on the = no meaningful on viewers’ engagement. difference

Participants were given They were then asked a choice between three TV to complete a surprise memory programmes and asked experiment about the ads to select an episode to watch they saw. This experiment also for approximately 30 minutes, collected explicit data on how complete with ads as they much they liked the ads and would appear on TV. their level of interest in what was being advertised. 82 83 The experiment Thinking Inside the Box. Section 05. Appetite for addressable

The ads were the 1. Gender 3. Automotive primary focus of These ads were classified as These ads were classified as People liked the experiment. addressable for women. addressable for people with a There were four self-professed interest in cars. addressable categories of addressability: 2. Family 4. Mobiles These ads were classified These ads were classified ads more as addressable for parents with as addressable for people in at least one child living the market to purchase either at home under the age of 13. a new mobile phone or a Overall, there was strong evidence new network supplier in the that participants liked the TV ads that upcoming 12-month period. we delivered as ‘addressable’ more than those that were not.

Addressability

2.0

1.5

Liking 1.0

0.5

100% 0.0 addressable non-addressable

Rated liking scores for advertisements broken down by Addressability.

84 85 People liked addressable ads more People liked addressable ads more

When this addressability That is, people liked the ads in Note that this analysis assumes that the ads in the addressability advantage was broken down these categories more if the ad conditions were well targeted. To test this assumption, following by advertisement category, was deemed to them. the experiment we asked participants to explicitly rate their it became clear that the In contrast, there was little interest levels in each category of advertisements. automotive and gender difference in targeted vs. categories performed strongest, non-targeted ads in the Family Car category with a smaller advantage category, with both targeted for the mobile category. and non-targeted ads liked 100% equally as much. = strong evidence those for whom these were addressed were interested in the category

Car Family Gender Mobile Family category 57.1% 2 = no evidence those for whom these were addressed were interested in the category Mobile

1 category

Liking 69.7% 100% 55.1% 100% 79.6% = some evidence those for whom these were 0 addressed were interested in the category

Gender -1 category 100% addressable non-addressable = strong evidence those for whom these were addressed were interested Participants rated how much they liked the advertisements with scores broken down by category. There is very strong evidence that in the category people preferred targeted ads in the Car and Gender categories more than non-targeted ads. The evidence was weaker for the Mobile ads and there was no evidence for ads in the Family category.

86 87 People liked addressable ads more Thinking Inside the Box. Section 05. Appetite for addressable

If participants felt the As a result, it may have been addressable targeting worked, less clear to participants Addressable based on our assumptions, how to rate their interest then there should be a clear when the “types of products” difference between the ratings were mixed. This raises for addressable and non- the question; how should ads were more addressable ads in each consumer data be used when category. Indeed, this worked it comes to addressable for the Car and Gender targeting? Consumers told memorable categories, but not as well for us that advertisers making the Family and Mobile categories. assumptions to serve them It is worth noting that the Car ads based on the data they Based on the results of the memory test and Gender categories were hold doesn’t always meet participants not only liked addressable ads more homogeneous than the their needs (or wants!) and our other two. The Mobile category experiment has showed how more, they also demonstrated higher recall combined interest in a new easy it is to get it wrong from based on the results of the memory test. mobile phone with interest a consumer perspective. Accuracy is an explicit measure of participants’ in a new mobile provider whereas the Family category memory for the ads they have seen with contained a mix of products. higher accuracy indicating better recollection.

Responses were significantly more accurate for addressable ads, indicating better memory for ads that were delivered as addressable to the individual.

Addressability 0.8

0.6

0.4 Accuracy

0.2 Accuracy for remembering ads after watching the show. Accuracy is an explicit measure of participant’s memory for the ads they have seen with higher accuracy 97.3% indicating better recollection. 0.0

88 addressable non-addressable 89 Thinking Inside the Box. Greater engagement for addressable ads Section 05. Appetite for addressable

Greater Addressability 2000 engagement for addressable ads 1500

While accuracy is an explicit way to measure engagement, it relies on conscious recollection. 1000 It is possible to measure implicit engagement without conscious awareness. We did this Reaction times in two ways: using response times and 500 mouse tracking as participants completed the memory test.

95.3% 0 addressable non-addressable Consistent with the explicit a clear indication of superior memory results, people memory for ads that we were significantly faster to delivered as addressable. Response times during the memory test. These provide an implicit recognise addressable ads. In other words, both explicit measure with faster responses indicating better memory because Faster responses on memory (memory) and implicit participants have to work less hard to respond correctly. tests are normally associated (reaction times) measures with more errors, but in this converge to demonstrate case, participants responded a significant advantage for faster and more accurately – addressable ads.

90 91 Greater engagement for addressable ads Thinking Inside the Box. Section 05. Appetite for addressable

A second implicit measure Do you remember this ad? used mouse tracking (Maldonado, Dunbar, & Physiological more certain less certain Chemla, 2019) to assess cognitive engagement. We recorded the trajectory measures of mouse movements from the initial “Ready” position until the participant made There was some evidence that heart rates their choice. The difference were lower when participants watched ads between the measured trajectories and a straight that were delivered as addressable compared line to the response was to those that weren’t. Studies have demonstrated an indicator of uncertainty, that lower heart rates are associated with with more complex paths indicating greater uncertainty a greater external focus and increased ability (red line). We found that to encode external information. addressable ads produced more direct trajectories(blue Yes No line), indicating greater confidence in their answers. In other words, both implicit measures agree – addressable Addressability ads were more accessible and easier to remember for 0 76.0% our participants.

Addressability

60000 -2 Heart rate

50000

-4 40000

Trajectory complexity Trajectory addressable non-addressable

Note: Scale is negative due to normalised heart rates Mouse tracking results showing more direct routes when 93.7% participants were responding to questions about ads 30000 targeted to them relative to other ads. addressable non-addressable

92 93 Physiological measures Physiological measures

As well as measuring participants’ heart rate as Addressability an index of their focus, we also quantified how much There’s always going to be advertising. individual audience members synchronised the emotional 40 Maybe if it was more targeted to you, intensity they experienced you wouldn’t mind it as much. It wouldn’t based on their electrodermal frustrate you as much because then activity (EDA). Increases in at least it relates to something you’re synchrony reflect greater 30 audience engagement. interested in.

We calculated the synchrony Viewer between EDA signals across participants when they 20 watched ads that were targeted for them and when they were not targeted. We Physiological synchrony found some evidence of an 10 increase in synchrony during targeted ads, consistent with I basically feel aggrieved having to watch the interpretation that people [ads]...or stop the continuity with it. I interested in the ads’ content 75.2% 0 like to be able to just watch something better engage with the ad. addressable non-addressable through, whereas five years ago I would say adverts were probably more part of my viewing.

Viewer

94 95 Thinking Inside the Box Sample composition Section 06. and methodology details

Appendix Workshops 6 x 90 min groups each between 7-10 respondents

Ethnography 8 x 1.5 – 2.5 hr sessions

Online survey N=1507, UK Nat rep sample, All had a TV in their house, Must watch at least one of the options at Q1 at least monthly (scheduled TV, YouTube, BVOD, SVOD, recorded programmes on a set top box, videos on social media, other online videos such as Vimeo)

Sample sourced via DRG’s in-house panel, Panelbase

Data collected Dec 20th 2019 – 6th January 2020

Industry depth 11 depth interviews with industry professionals and experts, Interviews interviews took place between mid-March and early May 2020.

Mix of experts from agencies, professional bodies, advertisers and broadcasters.

Neuroscience Participants were given the choice of a piece of broadcaster content conducted in to watch, each including the same 16 ads (of which half would be addressable to each person). partnership with UCL Consultants All respondents were shown all ads, ensuring that the differences we Limited observed were due to the ads’ relevance to the individual and/or to the size of the screen rather than any intrinsic differences between advertisements.

Equal test groups were set up with respondents recruited to ensure a balanced experiment. This means each ad was served to an individual as either addressable or non-addressable depending on their previous survey answers.

Participants were fitted with an Empatica E4 device to record biometric signals including heart rate and electrodermal activity (also known as galvanic skin response) to track physiological measurements during the experiment. 96 97 For more information, visit www.finecast.com

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