Looking through a crystal ball is always a dangerous game, as the reality often takes us by surprise. So when attempting to pick out the key trends in TV over the next 12 months, it is essential to look back to understand the facts as well as the emotion of the past year.
A key word for the TV business in 2007 was “recovery”. The business bounced back in different ways – advertising revenue grew at a greater rate than GDP, sales of high definition TVs reached 6 million and average spend per pay-TV home passed £400.
Moreover, TV viewing remained stable, despite the misinformed who told us that no one watched TV any more. For advertisers the result of this was that impacts rose again by 4%, meaning that TV last year was about the same price on average as 2006 and cheaper than it was 11 years ago.
With so much choice of audience, environment and opportunity, some would argue TV has never had it so good. In summary, 2007 provided a great base from which the TV business can relaunch itself. With this in mind, there are two key words that will dominate our lives this year – “digital” and “regulation”. I expect the former will come to be better understood and the latter will experience some shifts in thinking.
Since its inception, the word digital has been hijacked by companies selling services on the Web or mobile. Naturally the people in these businesses have been positioning themselves as fashionable, while placing more established operators and media in the “traditional” box.
Let’s put the record straight. The TV medium went digital in 1999 and by the end of 2007, 85% of homes had a digital service. The plain fact is that the vast majority of revenue in TV is derived from viewing that takes place in digitally enabled homes. In the case of Viacom Brands Solutions, our brands – MTV, VH1, Paramount, Nick and E! – are almost 100% digitally distributed across satellite, cable, the Web and mobile. We’re not in competition with digital… We are digital.
The next 12 months will see us get better at knitting digital strategies together, utilising TV’s superior brand-building skills with the point of sale potential of online. This is the context for a concerted revival as brand owners look to make themselves the brand of choice to Net savvy consumers.
A golden age for TV? Quite possibly. But more fashionable? Definitely, especially if the flurry of econometric studies into advertising effects – which tell us that TV is very effective at driving results – continue. The most recent report by Pricewaterhouse-Coopers told us that for every £1 spent on TV advertising there was on average a £4.55 return, better than any other medium.
It’s exactly because of this power and influence that the next trend emerges. Consumer regulation will continue to receive a lot of Government attention in 2008.
Over the past few years, advertising has been restricted in different categories, as the Government has sought to appease single-issue lobby groups that blame it for the nation’s ills. But I’d like to think a change is taking place. It was heartening last week to hear Secretary of State for Culture, Media and Sport James Purnell talk about how important it was to “look at the positive power of advertising to transform people’s attitudes” and to “work with industry” for a “culture change” towards a much healthier nation.
Advertising bans generally achieve little. But advertising per se can be extremely effective in helping to effect positive change – the powerful Government campaigns targeting smokers and drinkers appear to have had more influence than banning advertising.
However, I expect the TV business to get better at embracing public opinion and in particular take greater responsibility in nurturing positive behavioural change.
This isn’t just about reflecting opinion via programming; it applies especially to advertising. Making it easier to bring advertisers to TV who help to meet social policy objectives – such as health food producers, energy efficient products and recycled products. We want to show that advertising truly can be a force for good.
So that’s it: I said it was dangerous looking through a crystal ball. I’ll wait until December 31, 2008, and then you can let me know just how wrong I’ve been.
Nick Bampton is managing director of Viacom Brand Solutions