The Promise and Perils of NextGen TV Advertising and ATSC 3.0

quotWe had almost as many 30 sets pinging us in Detroit as Nielsen has meters therequot said Kerry Oslund Vice President of Strategy and Business Development at The EW Scripps Co How many homes is that quotIf you were looking at the 2554 demo that would have been about 1400 Nielsen meters that were reportingquotIt39s still very early days for ATSC 30 often referred to as NextGen TV But for the stations in Detroit and across the country the Super Bowl experience is a sign of changes afoot that will have enormous implications for spot television advertising moving forwardThere are some major challenges to overcome before NextGen TV is a next big thing for stations and advertisers alike Not the least among them is getting more stations on board to transmit the advanced signals more 30 TV receivers in the market at a price point that a critical mass of consumers can afford and giving the public enough reasons to feel that it39s worth it to buy them and tune inThe success of ATSC 30 is critical to the TV station business and its implications extend well beyond advertising into areas like handling data needed for 3D mapping of driverless cars and advanced emergency alerting But the advertising significance alone is enormousFor years linear station sellers have watched on the sidelines as digital media raced ahead with advanced opportunities whittling away at traditional spot TV39s share of the media mix Sure broadcast TV groups had video streaming and other digital plays But traditional overtheair signals with huge local appeal haven39t had advanced advertising capabilitiesAll that39s about to change quotI truly believe that this is like the move from blackandwhite to color TVquot said Oslund quotMoving to this IP transition is really that big And that39s just talking about the advertising possibilitiesquotquotAs you look at it from an ad revenue perspective it will allow us to get into addressable which currently broadcasters can39tquot said Rob Weisbord COO and President of Broadcast at Sinclair Broadcast Group quotIt puts you into a onetoone relationship with the viewer And that39s key to generating ROI for the advertiserquot NextGen also allows for conquesting an advertiser tactic used to target a competitor39s customers he addedWeisbord expects that in two years all of Sinclair39s stations will be updated to ATSC 30 And many broadcast TV companies are gunning to make big progress as well working together through alliances like Pearl TV which seeks to advance forwardlooking opportunities It includes eight of the country39s largest broadcasters among them Cox Media Group Graham Media Group Gray TV Hearst TV Nexstar Media Group Scripps Sinclair and TEGNAAt the end of last year ATSC 30 was available to 45 of US households quotOur goal by the end of 2022 is to have over 82 of households coveredquot said Anne Schelle Managing Director of Pearl TV She reported that ATSC 30 signals lit up in Los Angeles at the end of last year Among the major markets that are being added in 2022 are New York Philadelphia Boston Miami and San FranciscoBIA Advisory Services39 last projections for advanced TV ad revenue calculated in 2020 put the annual station take at 8 billion by 2030 That assumes that the technology will allow for the quotholy trinity of ad targeting dynamic ad insertion and attribution so it39s not just the same ad over ATSC 30 It has to have some new capabilities to itquot said Rick Ducey the firm39s Managing DirectorThat 8 billion would be in addition to BIA39s forecast of 19 billion in revenue from standard broadcast spot advertising in 2030 an election yearA more nearterm estimate comes from Jack Myers Chairman and Founder of The Myers Report and MediaVillage He puts broadcast TV stations39 digital and advanced TV revenue for 2025 at less than 2 billion up from 14 billion in 2020 so slow growth at first quotMy personal belief without having a lot of economic validation behind it is that ATSC 30 will be a significant growth factor 2026 and beyondquot Myers saidLove could be a twoway street where NextGen is concerned quotThe advertising piece of ATSC 30 is great for the broadcaster but it39s also great for the consumer better video quality better audio quality all free over the air interactivity that39s going to drive eyeballsquot said Jimshade Chaudhari Senior Vice President of Product at Marketron quotUltimately it39s going to bring back advertising dollars That39s the end benefit to broadcastersquotWhy is that Consider that ATSC 30 allows broadcasters to flop out creative and content because they can leverage the broadcast signal downstream and the internet connectivity back upstream based on metadata and specific viewing preferences quotThat39s kind of the holy grailquot said Ducey quotYou get one newscast I get another newscast You look at hockey I look at figure skatingquotWith dynamic ad insertion quotyou may have one basic storyline from the creative ad agency but literally 10000 different executions of it And you start doing the first 100 ads and see which ones work turn out the ones that didn39t work double down on the ones that did work and then add in the next 500 adsquot Ducey saidWeisbord sees far more than athome viewing growth ahead quotThink about delivery of information directly to a connected carquot he said For example ad availabilities on interactive maps delivered by ATSC 30 signals If a user drives near a certain quick service restaurant an ad might pop up giving a discount on certain meal options so far just a dream in the linear TV realmThe future growth of NextGen ad revenue hinges to a large extent on consumers buying enough sets to allow for meaningful household penetration And they also will need to buy antennas to go along with themData from the Consumer Technology Association shows that right now the US is in the early adoption phase with only 29 penetration of NextGen TVcapable sets expected this year 46 million receivers That is projected to ramp up to 262 by 2025 and 554 399 million by 2027quotWe went into 2021 with 70 models What39s unique about last year is Sony integrated NextGen across all their devicesquot Schelle said Samsung is already on board and quotLG launched more models The lowest priced model was a 43inch at 544 So we39re starting to get down that price curve where we start to get into volume salesquotEW Scripps is among the TV station groups that will see some ad dollars trickling in this year from NextGen but Oslund says the big growth is up ahead Right now 30 signals are simulcasting ATSC 10 signals but much more enhanced viewing and advertising options are in the worksquotWe don39t want early adopters of 30 to say 39Eh there39s nothing different than 1039quot Oslund said quotWe want to give them interesting things that can happen in the 30 environment We believe that the first 10 million viewers are going to have a lot to say about what the next 20 million are going to do And we do not want to repeat 3D televisionquotClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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The Promise and Perils of NextGen TV Advertising and ATSC 3.0

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