Targetted advertising is a necessary evolution within the TV broadcast ecosystem, writes Thierry Fautier and Vincent Grivet.
The overall advertising market is shifting rapidly towards digital, programmatic and addressable delivery models, which are growing at a high rate, while TV advertising is essentially stable, leading to a situation where digital exceeds TV advertising in most markets.
As advertising is an essential source of revenue for the TV ecosystem, TV advertising must and will be a part of this shift towards targetted or data driven models, which has already started in certain areas, mostly vertical platforms like Pay TV and OTT, and is now being actively considered by classical TV broadcasters.
This shift to targetted models is vital to ensure that advertising on broadcast TV is able to compete effectively with newer internet-based platforms, which have increased their advertising revenue at the expense of broadcast TV.
Targetted TV advertising is expected to help broadcasters increase unit selling prices and enable better monetisation of TV inventories, and may also increase viewer satisfaction by serving more relevant advertisements.
DVB is committed to helping broadcasters, a core community within DVB, embrace targetted advertising. To this end, as broadcasters consider their options to leverage targetted advertising, DVB initiated a study mission group (SMG) in February 2017 to reflect upon the relevance and the possibilities of generating some elements of standardisation for targetted advertising, which would help broadcasters reach their business goals.
The preliminary findings of the study mission were presented to the DVB Commercial Module in June 2017.
One of the key findings of the study mission is that no satisfactory solution currently exists that enables broadcasters (in a horizontal, classical FTA TV environment) to deploy and benefit from targetted advertising. This is a concern for broadcasters as it limits their ability to compete with new media, for example.
HbbTV includes some of the components required to enable targetted advertising in the broadcast context, and some technical trials have been done, but it does not fully meet the requirements of broadcasters.
The lack of a clear and full deployment perspective of the HbbTV specification (including some of its optional features across all geographic markets) is also a constraint.
Given this analysis, the SMG concluded that DVB should engage in work towards generating a targetted advertising enabling technical framework, focusing on a horizontal broadcast business model at the minimum.
As vertical /Pay TV operator models have more room to manoeuvre and have started some (proprietary) implementations, it seems they have less interest at this time to define and adopt a new standardised framework.
However, it is quite likely that if and when, as the case may be, a DVB targetted advertising standardised framework for horizontal broadcast does exist and is widely used across the market, operators would also benefit from leveraging such a harmonised framework, so their specific needs should not be ignored when DVB is planning its specifications.
Some of the aspects to be dealt with in such a future DVB targetted advertising framework include: in-band signaling; the enabling of virtually seamless signal switching, so that the broadcast quality experience is not compromised; reliable and accurate reporting for broadcasters because their business models need to be able to quickly access a very large base of addressable receivers.
As new and demanding privacy regulations, such as the recent General Data Protection Regulation issued by the European Commission, will have a very high impact on the overall structuring and operations of targetted advertising, it is also important that a future DVB targetted advertising specification will fully enable full compliance with these regulations, although it is not up to a technical specification to resolve the delicate privacy requirements.
Subject to a formal decision by the DVB Steering Board, which should be taken quickly after summer 2017, DVB is expected to form a dedicated Commercial Module on Targetted Advertising (CM-TA) to develop the commercial requirements for a future DVB targetted advertising specification (or set of specifications).
In doing so, DVB will obviously pay special attention to similar activities engaged in HbbTV, its cousin organisation, as many targetted advertising enabling mechanisms are present to a certain level in the HbbTV specification(s).
DVB will also make sure to extend its reach to internet digital advertising in regards to generating the appropriate interfaces between the broadcast chain and the existing ad tech digital systems.
While developing a DVB targetted advertising-enabling technical framework seems a legitimate and necessary step to allow broadcasters to adapt to a new market context, it might not be sufficient to guarantee the systematic implementation of the required technical capabilities on horizontal mass market receivers.
Therefore parallel work might be required to foster certain commercial agreements between the broadcasting community and the equipment manufacturers.
Thierry Fautier and Vincent Grivet are Co-chairs of the DVB Commercial Study Mission Group on Targetted Advertising
Thierry Fautier will be speaking at IBC2017 on 18 September in UHD Forum Session