Converged TV Is Complex but It’s Also Full of Opportunities

The move to converged TV - that’s the merging of digital targeting techniques with linear TV content into one closed system - has been happening gradually over several years. Recently, it ramped up speed leading to even faster evolution in the space. There are key global trends driving this transformation. The recent explosion of streaming services and their popularity is one; then there’s the rise of connected devices and smart TVs; and, finally, the pandemic, which forever altered everyone’s viewing habits. The cumulative effect I notice is more people than ever watching TV in hybrid fashion, making it the new normal. Advertising has had to rapidly evolve in response to that. 

Data backs this up. The connected TV market is projected to grow at around 13.7% over the next five years. Likewise, when we look at programmatic ad spend in connected TV, we've seen four times growth between 2019 and 2022. 

The shift to converged TV is happening globally but it’s perhaps most interesting in the APAC region where we’re seeing an increase in net disposable income. With that, the demand for smart TVs is increasing too alongside OTT platforms, like HWOQ. The market in India seems to be on the cusp of significant growth too as does any market where increasing disposable income is meeting better internet coverage. 

We’re seeing very fast growth in the US, where ad revenues are projected to reach $9 billion by 2026. In France, the growth of addressable is particularly notable. A study by SNTV found that addressable TV (that’s the ability to show different ads to different households as they watch the same programme) reaches a fifth of all French households. In the UK, BVOD continues to go from strength to strength, especially with younger audiences who are shifting from linear -  BVOD plays a key role in capturing those. Based on this, we’re expecting a four to five percent increase in investment in BVOD this year. 

The advantages of a converged TV model

Since the converged model enables more personalised, relevant and premium experiences, there are significant opportunities for advertisers and broadcasters. The improved targeting capabilities enable advertisers to be more relevant, driving improved engagement and conversion.

Another key advantage is the measurement and connectivity of data. We're seeing continual improvement in terms of performance measurement and the analytics that are available, enabling advertisers to adapt their campaign strategies faster and in real time. 

At Peach, I see content increasingly have the ability to drive a lot of that relevance and premium experience. So rather than being somewhat hindered by legacy operations and processes, with improved measurement and data, you can actually tie that directly to the content, reaching audiences across platforms and devices in new and really powerful ways. That's our key area of focus. 

Another emerging area is the idea of interactivity with ads now the tech infrastructure is in the place where it can support more interactive formats. Things like voice activation and shoppable ads are becoming more common. With that, there’s yet more opportunity to improve engagement across campaigns.

This isn’t without its challenges. 

Data fragmentation is a key challenge. In an increasingly diverse landscape, filled with platforms, devices, and systems - there's a disconnect. There are disparate data sources. So how do you best optimise your campaign? You need to connect data from multiple sources in order to leverage it and to drive that premium experience. Connecting your data is really key to simplifying the journey and driving relevancy.

With an increased opportunity to target and an increased number of variants of creative, we start to see cost issues relating to content production. Producing more content at scale is a tricky thing. We’re looking at a future where instead of one linear ad that millions of people see, there might be dozens of individual ads, tailored and relevant to each viewer. Achieving that at scale and in a more automated way is definitely a challenge. There's a great opportunity here to leverage the best tech and creative AI to support creatives across different parts of the campaign.

The third major challenge is around a blended converged TV strategy. When you're strategising across platforms and devices, there's a lot of manual activation workflows, in terms of actually getting data from A to B. Getting the ads live still requires a lot of manual interaction. And because the converged TV landscape is evolving rapidly, the industry doesn’t have the mature processes and structures in place that we have when looking at linear in isolation. At Peach, we’re spending a tonne of time really zeroing in on how we can drive efficiency and increase automation - I think that's key to overcoming that challenge and resolving some of these workflow tensions.

Brand compliance is another issue for advertisers. From a brand perspective, having that consistent application of your guidelines to your assets is going to be fundamental. A brand might have a blended TV strategy and be present across different platforms and devices, working with new formats in this landscape. It needs to take great care to guard its credibility, ensuring that it’s not compromised at any point. 

Zeroing in on compliance and regulations specifically, we're starting to see signs of increased regulation when it comes for different geographies. It's essential that local market laws, rules, and guidelines are clearly understood. There’s the friction of potentially more creative variants and more content playing a really big role. But brands also need to make sure that content abides by market specific laws and guidelines.

On the campaign success side, attribution is a key talking point. Being able to harmonise measurement across linear and CTV platforms, in particular, is something that is really front of mind for Peach and we play a key role for the UK in this particular space, where we develop and manage the attribution service for Clearcast within the UK’s industry.

We also need to think about timeliness and real time analysis. If we imagine a world where data attribution was solved, there remains a challenge of ensuring that analysis can happen as quickly as possible so that actions can be taken quickly to drive efficient adjustments to campaigns. It’s a complex area and one that’s ripe for automation. 

The future of converged TV

The future of converged TV will be marked by a few different factors. Accessibility is the first one worth calling out. It's more important than ever to ensure that content is inclusive and accessible to all. That advertisers can reach the widest possible audience. 

I predict that we’ll see more interactive CTV campaigns and a second screen interactive format. Initial engagement and video completion rates suggest that interactive has really great potential to be a powerful, influential format for advertisers. 

We'll also increasingly see an emphasis on ensuring that the right type of measurement is in place across different platforms, publishers, ad networks - that's key to be able to reach audiences and realise some of the aforementioned advantages. 

Currently, the ecosystem is very complex, but within that there is a tonne of opportunity. At Peach, we also see the opportunity to simplify the complexity, automating processes to deliver premium experiences. Solving these problems is a priority for us as it will enable our industry to focus on what it does best: delivering great, creative content to the right audience at the right time.