As the CEO of a startup in the media industry, I have been staring at the numbers in this space every day for more than three years. Sometimes the numbers are consistent, but sometimes you must dig and think more deeply about the data to make sense of the dislocation, ongoing experiments, and big bets being conducted right before our eyes.

So, let’s try and dig through the shrapnel together and see if it makes sense: 

1. Media consumption is flat

According to Nielson, overall media usage is steady at 10.5 hours per day. 10.5 hours!!! Does anybody work? Anyway as you see below its not overall consumption that is important but how its changing.

2. Broadcast TV is down

As detailed in my previous article, liner Broadcast TV is down in some demographics by as much as 50%.

3. Subscriptions are up while cable is down

It’s clear that consumption has been skewing heavily towards video for years now (1). When it comes to streaming video, the MPAA reports that subscriptions surpassed cable television for the first time, with 131.2 million new subscriptions added, rising to 613.3 million worldwide. This is a jump of 27 percent over 2017’s numbers. That same report shows cable subscriptions dropped by 2 percent. (2)

More people are watching shows and films through Netflix, Amazon Prime and other streaming services than through traditional satellite and cable TV, according to new figures from UK media regulator Ofcom. (3)

With Disney, Apple, Hulu, Amazon, and Netflix expected to spend around $30B in new subscription content in 2019, we can expect subscriptions to continue to sky rocket until that party ends. 

4. TV over the internet (OTT) is up

Ad spend in TV over the internet (OTT) (think CBS app or website) is up 20% this year, and two-thirds (59%) of ad buyers plan to increase their OTT ad spend in the next 12 months.

It is worth pointing out that OTT is notoriously difficult to measure and subject to the same blocking and fraud I mentioned in last week’s article. (5)

5. Overall, digital video ad spend is up

The 2019 IAB Internet Advertising Revenue Report shows ad spend in digital video continuing to accelerate as marketers report an increase for digital video budgets of 25% year on year. (6)

The first question we have to ask is: If there are fewer viewers in TV and cable (which are both ad-supported businesses) and there is a rise in subscriptions (which have no ads), where is all the growth in digital video ad spend going?

Of course, the bulk of it is going to untraceable interruption marketing on YouTube and Facebook. However, that is not the full story.

Early Signs of Digital Video Advertising Innovation

On the revealit advisory board we are privileged to take counsel from senior agency and brand executives. Lisa Reid from WPP and Philippa Sutherland from Unilever are both experienced global marketing executives tasked with innovating and answering this important question: How do we brand in a world where linear TV consumption is in decline? 

Let’s see what they, and others like them, are doing:

1. Product placement is up

First of all, product placement has grown rapidly to a $10B business in 2019, which is up from $8.8B in 2017. This makes perfect sense given the rise in subscriptions, but how do you track that if you are a brand? (7) 

2. Innovative ad formats rise up

Looking at the IAB graphic above (6), we see that new digital video ad formats of all kinds have experienced significant increases in adoption in 2019. Branded stories paired with shoppable ads, video overlays, augmented reality, and other interactive video ads are all on the rise.

What all these new formats have in common is the advertising is pulled by the viewer not pushed by the vendor. I have been following the IAB video landscape reports for a few years now, and this is the first time shoppable video ads have appeared formally in the numbers.

All of this is great news for viewers who don’t want to be interrupted.

A Contradiction?

In last week’s article, I stated that digital video advertising was a market stifled for innovation by Hollywood and the Google/Facebook duopoly. This week, I am celebrating the format innovations introduced by brands and agencies.

So am I contracting myself? 

The answer is NO because the innovation is not happening in the Facebook and Google video channels, which represents approximately 90% of the global digital video ad spend. (10)

Where is that innovation happening?

It turns out that brands and agencies are making a record number of their own in-house, brand-integrated content. They are also spending record amounts of their own money to publish this new content across their own channels. (8)(9)

In 2019, Walmart alone will spend $250M on new interactive video content and advertising within their own VUDU channel after acquiring video startup Eko. (See Walmart Expands Entertainment Strategy With Eko Interactive Content Joint Venture)

Conclusion

It does not surprise me in the least that when brands and agencies do not have their hands tied behind their back, and can publish within their own channels, that they are going to innovate, and the viewer wins. 

However, two things have also been made clear by my advisors:

1. Eyeballs dictate that we have no choice but to continue dealing with Facebook and Google channels into the foreseeable future, and we can expect them to not deviate too far from their profitable-but-interruptive model, however…
2. There is a healthy appetite (and budget) for alternatives and innovation in this dynamic, fast-paced market that is looking for ways to advertise without interrupting viewers.

That appetite and budget for innovation is exciting to me because entrepreneurs live to innovate, but it’s also exciting for investors, brands, agencies, and creators who grasp these opportunities and recognize that the time is now in this growing dynamic market.

revealit Corporation is dedicated to building a new viewer-centric video platform that makes anything you see in video shoppable.

For revealit, being viewer-centric means:

1.  Viewers are never interrupted.
2. Viewers always get to shop what they see in-frame.
3. Viewers expect shopping to be entertaining, educational, and engaging.
4. Viewers demand zero-friction while shopping.
5. Viewers should be rewarded for their attention.

References

1.  https://www.mediaplaynews.com/report-streaming-video-consumption-up-72
2. https://www.theverge.com/2019/3/21/18275670/mpaa-report-streaming-video-cable-subscription-worldwide
3. https://www.independent.co.uk/arts-entertainment/tv/news/netflix-amazon-prime-streaming-satellite-cable-tv-pfcom-a8453081.html
4. https://www.emarketer.com/content/will-ad-measurement-challenges-stifle-ott-growt
5. https://www.emarketer.com/content/will-ad-measurement-challenges-stifle-ott-growth
6. https://www.iab.com/insights/ad-spend-report-2019/
7. https://digiday.com/media/rainy-day-sunny-day-money-producers-streaming-shows-looking-product-placement-deals/
8. https://digiday.com/marketing/theyre-selling-ever-production-companies-feeling-squeeze/.
9. https://www.cnbc.com/2019/03/04/firms-are-taking-more-marketing-functions-in-house-heres-why.html
10. https://www.linkedin.com/pulse/lessons-from-decline-broadcast-tv-why-shoppable-video-garry-smith/?trackingId=sEwUzn6qDKcKGZHU1acg1g%3D%3D