A quick overview of the opportunities for brands and advertisers on Apple's new tvOS platform, and how they might leverage their ecosystem to create unprecedented opportunities in the future.
Hi I’m Adam Simon, Director of Strategy at the IPG Media Lab, the creative technology arm of Mediabrands.
Three weeks ago, Apple announced a new version of their Apple TV platform, complete with an app store, a new interface built around touch and voice, and cross-platform search, powered by Siri.
On stage, they demoed not only video streaming and games, but also apps from Gilt Group and AirBnB, and a new experience from Major League Baseball that blended video and software to create a unique viewing experience.
Today, I want to talk to you about what’s possible on this new platform for brands and advertisers.
But first, let’s talk about why this little black hockey puck is important
As of this year, we have definitive proof that people in the US are cutting the cord, and cancelling their pay TV service. And of course we know that millennials are very likely to never subscribe to pay TV in the first place.
http://www.beyonddevic.es/2015/08/11/an-update-on-cord-cutting/
On the other hand, 40% of US households subscribe to at least one streaming service, meaning they’re already getting some of their video content over-the-top.
Only 2.6% are broadband-only, but that number is growing.
And, along with gaming, YouTube, Twitch, Facebook, SnapChat, and other apps, it’s stealing attention, and starting to cut into linear TV ratings.
If you don’t already pay for linear TV, there’s so much content to be had over-the-top that there’s no longer a compelling reason to do so. And there’s no going back from here.
http://adage.com/article/media/where-did-everybody-go-tv-premiere-week-ratings-fall/300509/
The shift to streaming is the shift away from channels and to apps: it’s going to fundamentally change not only how we watch, but how we create, discover, and measure our television.
The app-ification of TV will be the story of collaboration between engineering talent and Hollywood talent.
And the most exciting new work will be take the shape of things we haven’t thought of yet.
When TV is Apps, you don’t program for the grid, you optimize for the feed. We’ll optimize the way we optimize for Google, target the way we target on Facebook.
Discovery will be driven by search, personalization, and curation. Branded content will have the same opportunities as everything else, but will have to earn its keep.
And when all our video is delivered by apps, we’ll have all the benefits of digital, with accurate measurement, and closed attribution loops.
We’ll no longer have to wonder which 50% of our ads are working, because we’ll know.
All of this is coming to fruition because of the ecosystem Apple has put into place.
I want to talk for a second about why the Apple TV is different, when Roku, Amazon, and Google already have TV app platforms in the market.
For one thing, it’s hard to over-estimate Apple’s scale.
The App Store alone, today, is generating twice the yearly revenue as the US Box Office. And all of Apple’s services, combined, have recently surpassed Global Box Office.
And all of *that* revenue is only about 10% of the revenue generated each year by the iPhone.
Quite simply, Apple has the resources to build or buy whatever they need to make a platform work, and the scale to create new industries to support that platform, overnight.
Let’s look at what Apple’s ecosystem looks like from a monetization perspective, and talk about how it might support Apple TV.
We have iTunes accounts to purchase digital content
Apple Pay to purchase physical goods
And iAd for advertising.
Together, these platforms reach about a billion users.
Today, only digital content purchases are supported on Apple TV — including in-app-purchases.
We expect this to quickly lead to an app install ad ecosystem the same way it has on mobile.
But it’s not hard to imagine iAds on the platform, serving video creative and interactive formats. Perhaps as part of the still-unannounced Apple TV subscription service.
And Apple has the technology to know which devices were in the room when a commercial airs.
Let’s say you see a commercial for Coke while watching Real Housewives on Hulu. Apple knows it’s you watching, because, of course, you have your iPhone with you. The next day, you pick up a case of Coke at the supermarket, and check out using Apple Pay.
Apple then has all the data it needs to connect your purchase to the commercial.
This is the power of app-based TV advertising: Apple has all the pieces to build a closed attribution loop for commercials on Apple TV.
We’re not quite there yet, but it demonstrates the power of Apple’s ecosystem, which is one major reason to get excited about this platform.
But just because those pieces aren’t all in place yet, doesn’t mean brands shouldn’t be on the platform. There are plenty of ways to start learning and building an audience.
Of course, you can develop your own video content or games. A great place to get started with content is by sponsoring live events: Apple themselves produce a music festival largely for the content it produces. And a lot of Red Bull’s content still comes from their event sponsorships. It doesn’t have to be a lot of content, just high quality.
Apple is also encouraging brands to develop social utilities for the living room, which make sense to experience with others in your household.
AirBnB is pitching trip planning as entertainment. So you can review places to stay with your family on your TV, choose your favorites, and have them sync back to the app or website.
Any content you might want to share with others, or collaborate on, seems like fair game.
Like I said before, apps that blend software with video are maybe the most compelling use case right now — this is MLB’s app, which can show you multiple games and real-time scores.
So, if you have software, think about what video content might line up with it. And if you have video content, think about what interactive features would be useful.
Personally, if I were running the AirBnB project, I would be thinking about producing a travel series that highlighted unique lodgings that part of the AirBnB network. While watching, you’d be able to check their schedules and book them, right from your TV.
There are also opportunities for brand integration within other experiences. Gilt showed off their own ecommerce app, but they easily could have powered the storefront for a Fashion Week live stream, or launched a new collection, with behind-the-scenes video with the designer.
We’ll soon see platform owners extending their ad products to support things like pushing offers from your TV to your phone. This is technically possible today, but will become much easier in the future.
And of course some of these platforms, like Netflix and HBO, don’t have ads. But that doesn’t mean we can’t reach their users.
Companies like Mirriad can dynamically embed products into scenes, even after post-production has wrapped. And we can use technologies like Samba to understand what audiences are watching, and retarget them on their mobile devices.
So, to wrap up, let’s talk about how we can incorporate this new platform into our current TV and video strategies.
It’s just another target for video and software, but it’s a big one, and comes with many targeting and attribution benefits.
As our audiences shift to streaming, we should use technologies like programmatic to find efficiencies in linear TV, and use that savings to establish a beachhead on these emerging platforms.
We need to start learning now, experimenting with things like commercials which send offers to mobile, and interactive ad formats in the living room, so we know what works before they go mainstream.
We should make sure we’re reaching audiences on non-ad-supported platforms with product placement and retargeting.
And we should enable support for Apple Pay at retail and within our apps, so that when the time comes, we’re ready to close the attribution loop.
It’s an exciting time to be working in this space, and I hope I’ve given you a bit of a roadmap for what to expect. Thank you.