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Pay more, get more? – Why BVOD is not for everyone

As you’ll know, TV measurement is an important topic that we like to focus on at All Response Media. At least those of you who regularly read ARM weekly will know… those of you who don’t… we know who you are! Most of you will also know that when we talk measurement, we are mainly interested in business outcomes as opposed to focusing on buying TVRs or eyeballs. One of our clients once said that “not all impacts are created equal” and I thought that was a great way to summarise our approach to TV measurement and optimisation.

However, to measure outcomes you need to understand viewing behaviour and all its nuances. The debate around the measurement of TV both on and offline continues in the vacuum created by the outputs of BARB’s Project Dovetail. There is still much frustration amongst marketers that there is no unified and common currency against which both platforms are traded.

Nick Ashley, the head of media and campaign planning at Tesco, outlined at the recent TV Advertising Summit what he believed to be the biggest problem for brands that advertise on TV: “The biggest problem for brands that advertise on TV is not being able to understand the difference in the audience they are reaching on linear TV and video-on-demand”.

Is it though?

I would argue that the current issue is actually much simpler than that. Perhaps one of the basic principle of economics: supply and demand. ‘Premium content’ pricing as it’s termed by our friends at ITV, C4 and Sky is really just a fancy way of saying we don’t really need to sell you VOD at lower cost per thousands (CPTs) because we have enough advertisers lining up to pay those costs. Advertiser’s like Tesco (and many others) who favour media focused KPIs as opposed to tangible business outcomes are the reason that VOD CPMs (cost per thousand in digital terms) are so inaccessible to advertisers who could prove that it works…or not.

Telling those who read our weekly articles that you should focus your attention on prioritising business outcomes is almost certainly preaching to the converted. But I’ll say it anyway! Not all impacts are created equal, and we of all agencies certainly know the truth behind that. But can any impact/impression be worth 5-10 times that of another? I’m not sure it can.

It’s likely that this imbalance between the demand and supply driven by these ‘pioneers’ will last for some time. Although BVOD is growing, arguably it is the area of broadcasters’ revenue that is most affected by SVOD providers such as Netflix and the new Disney+. There will come a tipping point in the future but it’s some distance off still.

In principle, this sounds like a great opportunity to grow TV spends and increase investment with ITV, but there are several clauses within which would make us approach with caution.

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