Shira Leffel, Executive Director Marketing & Product Education at Smartclip and Daniel Bischoff, CMOO of RTL AdConnect, joined forces with NBCUniversal to publish an in-depth analysis of video content consumption behaviours in households today.
Why have you commissioned this study?
Shira Leffel: First of all, we are hearing a lot of misconceptions surrounding the state of television in our industry. For example, I often hear things like, “No one below the age of 45 is watching TV – and if they are, it definitely is not on television screens”, or “20 years from now, the only place you will find a TV set is in an antique store”. The New Life of The Living Room study set out to investigate current media consumption behaviours across Europe and the USA. What we found is that the television is actually far from being an antique device and the future of television is, in fact, still television.
Daniel Bischoff: We wanted to understand what changed during the pandemic. While many studies in our industry focus on technologies, ad spends or other technical aspects, our angle was to find the one common denominator from which we can derive real insights for advertisers and agencies to base their media investment decisions on.
We found that what it comes down to is consumer behaviour, more specifically media consumption behaviour. We saw that the living room again became the central space not only for media consumption, but for family interactions in general. This human angle was the core piece of our study. To capture the essence of what’s going on in the living room, we needed to find the right mixture of methodologies, so we decided to combine quantitative data with qualitative, personal interviews. We conducted a big quantitative survey across ten countries in Europe, and later added the US, South Africa, Australia, and Singapore thanks to a collaboration with our partner NBCUniversal. We supported these data points with qualitative and in-depth interviews in core countries, where we asked the participants about their media consumption and took a closer look at their living room habits.
What were some of the biggest differences between Europe and the US?
SL: There are many notable differences between the United States and Europe, but what surprised me most was how much more video content the US consumes compared with Europe. AVOD penetration sits at 51% in the US and only 19% in Europe, and overall SVOD penetration lies at 80% in the US compared with 25% in Europe. Another big difference is that Americans are far more open to being targeted by ads than Europeans.
However, what I find particularly interesting in the European context is what we found among young viewers – those between the ages of 18 and 34. This age group has become the leading buyers of smart TVs – 65% have bought a new smart TV in the last two years compared with a European-wide average of 55%. They are also an age category with the highest increase of TV viewing time since the pandemic – with 35% spending more time watching TV content than before the pandemic. And most fascinating, they have a much higher tolerance for TV ads and openness to being targeted than any of the other age groups. I think this is great news for all of us because it is on the big screen, it is premium content, and it’s the audience advertisers want. This shows us our efforts are on track – everything that we are working on in terms of addressability and making sure we are data-driven and reaching the right consumers.
DB: First, let me state clearly the crucial similarity: the big screen is the big thing on both sides of the Atlantic. For me, the most interesting results concern video consumption on the big screen, before and after the pandemic. We wanted to understand whether people were watching more or fewer videos during and after the pandemic. The data clearly shows that all age groups are watching more. 30% of young audiences said that their consumption of videos on the big screen has increased.
This is closely linked to the device penetration. In the last two years, 65% of the young participants in Europe bought a new Smart TV set, which means there are a lot of new devices out there and the younger audiences especially are engaging more with the big screen.
What are some of the main advertising challenges and do we have solutions?
DB: We must understand what the consumers’ expectations towards the big screen are. It is the dominating screen within the central point of the household, so expectations are surely high. The study showed that they want it to be bigger, better, and smarter. The high penetration level of smart TVs is an immense opportunity which can be leveraged thanks to the connection or ‘smartness’ of these devices. However, this also means that we must watch out for ad acceptance, to ensure a meaningful connection with consumers. And advertisers need to match the new possibilities with reality – they not only have to have beautiful award-winning ads, but to get real impact.
SL: Our research revealed that 80% of Europeans and Americans reported turning to their mobile device to consume different content during TV commercial breaks. Knowing this, advertisers literally need to be everywhere the consumer goes. What does that mean? Well, it is about making sure that you lean into adjacent content experiences on other platforms so that in those breaks, you create a continuation of the experience – for example, with cross-device targeting. It is also about leveraging different ad formats to create an engaging and non-intrusive experience for consumers.
Let’s talk about a tricky subject – the annoyance of ads. What does your study show and how can advertisers tackle this problem?
SL: Irrespective of whether the ad was delivered on linear TV or catch-up services, we found that 30% of Americans and more than 50% of Europeans find advertising annoying. However, with the data and adtech that advertisers have at their disposal today, there’s no reason why ads should be a nuisance. This is in fact, one of our core areas of expertise at smartclip. We provide a platform that merges the worlds of traditional broadcast and digital video – delivering innovative, data-driven ad formats that respect the end consumer. This is how we achieve control of ad load, ad frequency, and prevent ad fatigue or negative brand perception – all while bringing more efficiency to advertisers.
That’s not to say that the creative is not important – it is indeed. But technology is crucial in eliminating the annoyance surrounding frequency, relevance, and quality.
What are your key takeaways?
DB: There is an explosion of content, connection possibilities and touchpoints with consumers in their living rooms and when it comes to video, the big screen is the one that rules them all. Consuming video is among the top three activities of all Europeans except for Germany, which means that video is a substantial part of our lives. The living room offers a unique opportunity for brands and through the TV, they can invite themselves to such moments. But brands must learn how to best reach their consumers in this setting. To do so, they need to tackle the challenges of creativity, quality, ad load, targeting and ad fatigue. And the best tool for this is technology.