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1. The Future for TV: The Publisher as Audience Architect

2. Agenda
• Introduction
• Research report presentation – The Future of TV: The Publisher as
Audience Architect
• Panel discussion
• Audience Q & A
• Close

3. A future for TV: The publisher as audience architect
Daniel Knapp, Director, Advertising Research
28 November 2013

4. The value of IP-delivered video advertising for publishers
IHS Electronics & Media

5. US-domestic and international markets are similar
in size, but very different in business model
composition
Consumer/Net Advertising Revenue by business model - 2012 ($m)*
8,000
7,000
6,000
5,000
Other ad funded content
Broadcast
Purchase
Rental
Subscription
4,000
3,000
2,000
1,000
0
US
*includes TV and movies, and pay TV based platforms
IHS Electronics & Media
ROW

6. IP-delivered video outperforms ad market growth
Year-on-year growth in WE advertising revenue (%)
80%
76.0%
70%
60%
50.7%
50%
45.6%
40%
30%
24.6%
22.9%
20%
18.3%
15.8%
14.4%
10%
13.4%
10.0%
8.4%
6.1%
9.1%
6.1%
7.5%
8.0%
0%
2010
2011
2012
2013
Video
IHS Electronics & Media
2014
Total media
2015
2016
2017

7. IP-delivered video advertising more than doubles
between 2012 and 2017
IP-delivered video advertising revenue and growth - Western Europe
3,000
80%
76.0%
2,500
2,500
2,205
2,000
70%
60%
1,905
50.7%
50%
45.6%
1,610
1,500
40%
1,310
1,051
30%
1,000
24.6%
722
22.9%
20%
18.3%
500
15.8%
479
13.4%
10%
0
0%
2010
2011
2012
2013
Revenue
IHS Electronics & Media
2014
Year-on-year growth
2015
2016
2017

8. Video becomes an increasingly significant portion of
display ad revenue
IP-delivered video share of display - Western Europe
35%
30%
28.7%
26.9%
25.2%
25%
23.0%
20.6%
20%
17.8%
15%
13.7%
10.7%
10%
7.6%
4.9%
5%
2.0%
1.7%
2003
2004
2.3%
2.8%
3.5%
0%
2005
2006
2007
IHS Electronics & Media
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

9. But proliferation of video differs among top markets
IP-delivered video share of display in 2013
40%
35%
33.9%
31.6%
30%
24.9%
25%
21.0%
20%
18.2%
14.3%
15%
10%
5%
0%
France
Spain
IHS Electronics & Media
Italy
UK
US
Germany

10. Multi-screen video: the consumption/revenue divide
IHS Electronics & Media

11. It is no surprise that the markets which have seen
linear declines have high proportions of non-linear
viewing
% of TV viewing which is non-linear (2012)
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
UK
US
IHS Electronics & Media
France
Spain
Germany
Italy

12. Screens continue to grow – not just at the high-end
100%
90%
80%
70%
10.0 - 11.0
60%
07.1 - 09.9
05.2 - 07.0
04.6 - 05.1
50%
04.1 - 04.5
03.5 - 04.0
03.0 - 03.4
40%
02.5 - 02.9
02.0 - 02.4
30%
20%
10%
0%
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Source: IHS - from Mobile Technology Intelligence
IHS Electronics & Media
Q1-12
Q2-12
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13

13. Proliferation of video-capable devices makes
monetising audiences difficult for publishers
Video-capable devices - Western Europe
1,200
1,000
800
600
400
200
0
2012
Smartphones
Tablets
IHS Electronics & Media
2017
Game consoles
PCs
Smart TVs
Other devices
TV sets

14. So which devices are users currently relying on?
PC still represents the most important platform for
major commercial broadcasters
ITV
RTL
M6
Mobile/
tablet, 10%
Pay TV, 37%
Pay TV, 43%
PC, 45%
PC, 46%
Connected
TV, 2%
Mobile/
tablet, 15%
IHS Electronics & Media
PC, 90%
Connected
TV, 0%
Mobile/
tablet, 12%

15. Lower ad-loads on non-PC devices are common feature
of the market, as is disparity between players
Ad-load per stream (# adverts)
12
10
8
6
4
2
0
DE
DK
FI
FR
NL
Web/PC
IHS Electronics & Media
Mobile
NO
Tablet
SE
TR
UK

16. Audience-based buying and the rise of targeting
IHS Electronics & Media

17. The US is two years ahead of Western Europe with
11.4% of video revenue already generated
programmatically
IP-delivered video advertising revenue - US
3,500
3,000
2,500
€m
2,000
1,500
1,000
500
0
2010
2011
2012
2013
Other video
IHS Electronics & Media
2014
Programmatic video
2015
2016
2017

18. Programmatic video moves from marginal to
mainstream
IP-delivered video advertising revenue - Western Europe
2,500
2,000
€m
1,500
1,000
500
0
2010
2011
2012
2013
Other video
IHS Electronics & Media
2014
Programmatic video
2015
2016
2017

19. Fixing it: Publishers as audience architects
IHS Electronics & Media

20. Most publishers are still in nascent stages of
developing a data strategy
Publishers in Europe in H1 2013*
20%
80%
No data strategy
Data strategy
* source: IHS biannual publisher survey
IHS Electronics & Media

21. Most publishers are still in nascent stages of
developing a data strategy
Publishers in Europe in H1 2013*
Publishers in the US 2013**
20%
28%
72%
80%
No data strategy
Data strategy
* source: IHS biannual publisher survey
IHS Electronics & Media
No data strategy
** source: IAB/Winterberry Group Whitepaper
Data strategy

22. Fragmentation & duplication characterise complex
video advertising infrastructure
Trading
desks
DSPs
Ad
Exchanges/SSPs
Ad networks
Video Properties
Data Vendors, Data Management Platforms, Measurement
Analytics
IHS Electronics & Media

23. In an increasingly cookie-less world, personally
identifiable log-in data becomes crucial
Millions of users by service
1,400
1,200
1,000
m
800
600
ID driven by iPhone &
iOS unit volumes
400
200
0
IHS Electronics & Media

24. Why a data strategy?
Pressure from the demand-side
Competition from online giants
Adding transparency to existing data
regime
Connecting audiences across screens
Adding diversity and context to overstandardised demand-side metrics
IHS Electronics & Media

25. Data strategies: adoption varies among publishers
Online portals & print
Predisposition
Broadcasters
Video ad networks
• Open to experimentation
duet o either 1)
understanding the
experimental nature of online
or 2) originating for a
declining print business
• Reluctant to adopt new
unproven techniques as they
comes from a long-tested TV
background
• Accustomed to selling
audiences
• Aware of the urgency to use
data
• Most advanced in
understanding the value of
data
• Advanced in their thinking
about data strategy
State of adoption of
data strategy
• Combining 1st and 3rd party
data effectively
• Fear of alienating users by
asking for registration data
• Leveraging data with
context to enhance their
offering
Challenges
• Connecting data available
across devices
Various states of adoption
from early to advanced: tend
to be more advanced than
broadcasters
Early: the process of
understanding their 1st party
data
IHS Electronics & Media
• Cannot offer premium
context in the way the other
two can
• Combining 1st and 3rd party
data effectively
Advanced: already use 3rd
party data extensively and
working on integration of 1st
party data

26. Data strategies: what are publishers currently
doing?
Data is key to their long-term selling strategy
10% of ad revenues come from programmatic
Programmatic is part of their media planning strategy, but not creative
Own trading desk (Response+) to implement demand-side
capabilities
1st party data is still underdeveloped
Display is traded programmatically, but not video
Cautious of middlemen
Work solely with 1st party data – 3rd party data is too expensive and
“frankly not very good”
Direct sales remains the primary and preferred channel
Cooperate with other publishers in data strategy
IHS Electronics & Media

27. Conclusion
• Growing importance of data should coincide with change in
publisher self-perception as audience architect.
• At the core of audience architects: unlocking data, making it
usable, enhancing it to segment and assemble audiences in
new ways. Pairing advertiser need and specifics of unique
editorial offering.
• No golden path to becoming audience architect, still in infancy.
Emerging set of practices across Europe as compass.
• Putting data strategy at centre as a) defensive move b) driving
innovation.
Architecting audiences means architecting the
foundations for future revenue growth
IHS Electronics & Media

28. Thank you
daniel.knapp@ihs.com
@_dknapp
IHS Electronics & Media

29. Panelists
Eleni Marouli
Advertising Analyst
IHS
Stephen Byrne
Commercial Director UK/NL
Videoplaza
Andrew Moore
European Managing Director
SpotXchange

30. Next steps
• All webinar participants will receive early and exclusive access to the
full research report via email by Friday, ahead of launch
• A recording of the webinar will also be made available via the same
email

31. Thank you