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SVG@NAB Viewpoints: Industry on the Verge of a Digital ROI

April 28th, 2015 Posted in Headlines By Brandon Costa

Team SVG was out in force during NAB 2015, with nine reporters scouring the show floor and checking out the latest in technology as well as sitting down with dozens of industry leaders on both the exhibitor and attendee side. These reports from the entire SVG editorial staff offer nine individual perspectives that, collectively, form a single vision of what NAB 2015 meant for today and, more important, tomorrow.

Baseband to IP. HD to 4K. Spinning disk to the cloud. The broadcasting industry is undergoing all kinds of simultaneous makeovers across the content-creation ecosystem. Yet, perhaps the greatest industry changes are coming not as a result of how content is created but from how content is consumed.

4K made its advances in both quality and affordability, and IP very nearly stole the show with tide-turning announcements like Disney/ABC’s deal with Imagine Communications to move the company’s massive linear-broadcast operations to a unified IP cloud architecture. But the most interesting conversations at NAB 2015 concerned the future of digital/multiscreen distribution and monetization.

More than 103,000 people attended the show, and it certainly did feel busy. In addition, there was a general feeling of industry health and, overall, a greater sense of confidence than at past NAB Shows.

Yes, it appears that the broadcasting industry is bouncing back from the recession, but it’s emerging as an entirely new animal. “Digital” is no longer the rebellious kid sitting in the back of the classroom hurling sarcastic remarks like grenades; she’s in a cap and gown giving the valedictorian speech.

For a while now, digital has been victimized by the taunts of “where’s the ROI?” from the linear establishment, and, in TV’s defense, there wasn’t much reason to care about digital ROI when massive rights fees were coming from linear, all the ad sales were coming from linear, and the only numbers that mattered in selling those ads came from Nielsen.

It seems, however, that the industry may finally be on the verge of maturation when it comes to digital ROI, specifically dynamic ad insertion. And it’s a good thing, too, as it’s going to have to be figured out soon. Digital applications are rapidly shifting from companion experiences to the primary experience of sports viewers.

According to the Consumer Electronics Association’s Sports and Technology Study, which was released this month, nearly a third of sports fans (32%) reported interest in watching sports live on their mobile devices, a significant increase from 2010 (20%).

In such a situation, advertisers will miss out on a third of a live sports event’s viewing audience if an effective digital-advertising strategy is not a part of their package.

Any fan who has watched a live sports event — a college basketball game on WatchESPN or Fox Sports Go, a Barclay’s Premier League soccer match on NBC Sports Live Extra — has likely experienced two things: one or two ads repeating over and over (which can turn viewers off) and breaks with no ads at all (what?!).

That appears about to change. Networks have moved on from asking the question “why do I have to do digital/OTT at all?” to “how do I make a business model out of this?” The technology to deliver dynamic ads into live coverage wasn’t ready for primetime. Until now: many of the developers at NAB 2015 are confident that the technology is ready.

It’s no secret that customizing ads for various content devices — tablets, mobile devices, smart TVs — is a highly involved process and is probably a larger issue for a broadcaster’s marketing department to tackle than its production department. But the engagement levels are accessible in ways TV could never imagine, if you are willing to put in the work.

Companies like iStreamPlanet have been at the forefront of the technology side of building mobile apps and live over-the-top (OTT) solutions for broadcasters — most notably, for NBC Sports, which it helps stream the Olympics and Super Bowl — and building effective ad-decisioning and ad-insertion systems with partners like Adobe and Akamai.

iStreamPlanet Marketing VP Jennifer Baisch tossed out the idea of having the stream of an NFL game feature a live interactive interface, enabling viewers to vote on whether a call will be overturned when a challenge flag comes out. That’s a sponsorable element that will directly engage with a large portion of the users.

Brightcove also spoke openly about driving content creators away from cutting and pasting 16:9 video ads for all platforms and diving into the advanced user data available to engage users more effectively: what device are you watching on? where are you watching? what other apps have you downloaded? All are keys to the opportunity to monetize.

Users do not engage with their mobile devices the same way they do TVs. So ads should be designed for the type of device.

What’s the future for sports digital distribution? More advanced advertising, the birth of an ROI, and viewers’ comfort with digital consumption continuing to rise. More and more consumers are growing up as “digital natives,” and they have a much lower tolerance for traditional ways of engaging.