“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Paul Alfieri, chief marketing officer at Cadent.
Google’s recent test of ads on the home screen of an Android-powered Sony TV should have been an eye-opening event for TV service providers intent on growing “time spent” on their video platforms: You are not in full control of your customers’ viewing experience.
As the TV ecosystem becomes more layered, there are many services that contribute to a customer’s experience. There are content publishers, device manufacturers and internet companies all trying to provide their own unique experiences across program guides and app interfaces on TVs, tablets and mobile phones. The foundation of all of this is the service provider that connects the linear or IPTV platform to the home.
Each of those constituents operates a different business model: Networks have affiliate agreements and revenue shares, device manufacturers have a retail model and internet companies have advertising models. While all models are needed to support a vibrant ecosystem, when they clash, it creates consumer dissatisfaction.
Case in point: Google recently began a pilot program where it inserted a sponsored content channel on the home screen of Android-powered Sony TVs. This Google-powered promotional channel appeared without warning, can’t be moved or removed, and it displayed no indication of how these recommendations were determined.
For an advertising company used to operating in the ad-supported content world of the internet, testing a new ad unit probably seemed like business as usual. But while TV content itself is ad-supported, TV devices are purchased at retail, with the expectation of features set upon purchase. Purchasing a device with full knowledge that it will show advertisements is different than waking up one day to find that your multi-thousand-dollar purchase suddenly decided to start monetizing your family’s eyeballs.
There are three lessons that service providers can learn from this rapidly changing world.
Safeguard the customer experience
Time spent on service-provider platforms will continue to expand with the growth of new, IP-based services, especially as consumers are increasingly offered OTT and app-based “channel packages” along with more comprehensive traditional pay-TV packages. While this is a positive for providers in that it positions them well in the core strength as aggregators of communication services, the downside is that those IP services might come with internet business models that don’t necessarily fit the quality, respect-the-viewer paradigm of television.
Obtrusiveness, invasiveness, irrelevance and lack of choice are known culprits in the consumer-advertiser digital disconnect. As a result, a growing number of people tune out online ads, run ad blockers and opt out completely.
But has this spurred a reckoning or any self-awareness in the advertising world? Not really. Industry panels focus on making better ads. Better ads are fine, but what consumers really care about is the overall experience and the choices provided by platforms.
With so many content and app services available, operators have an opportunity to enrich their subscribers’ experiences and provide more valuable services by using data to understand the customer better – and then offer more relevant recommendations and choices for engaging with services, along with transparency about how data is used and fierce protection of data collected with the ability to opt out.
Protect subscriber data
In the example of the Sony TV and Google pilot program, subscribers’ preferences were changed. The operator didn’t maintain control over the customer relationship and data, and the experience was disintermediated by decisions made by third parties.
As a result, some Android TV customers felt like they experienced a breach of trust. Ultimately, because the operator hadn’t activated its own data to create a compelling experience for its subscribers, Android came over the top and created one that was jarring. When used appropriately, subscriber data can help service providers understand usage patterns, recommend new services and provide a better overall experience across platforms.
Understand partner business models
As the platform provider for all next-generation services to the home, the service provider needs to think carefully about the downstream effect of any partnerships. Which rights are granted to the partner? What’s their long-term business model and could it be in conflict with your subscriber-experience-first approach? How do they protect data and provide transparency?
It’s also important to think about partners’ partners – will a new device or service on your platform be a Trojan horse for an unwanted service, much like owners of Sony Android TVs unknowingly brought Google ad services into their living rooms? More consumers have more of their devices and experiences connecting across screens and channels in an Apple, Amazon, Google or Netflix ecosystem. How can service providers leverage their scale and strength in customer relationships to guard subscribers from unwanted experiences and less-than-transparent monetization?
Some digital marketing paradigms would improve the TV customer experience. Customer lifecycle management, for instance, should make its way to TV. The data and analytics each company has can guide smarter, more valuable and better experiences for consumers as their lives grow and evolve with devices at the center. And likewise, as advanced TV services continue to grow, every data company, content provider and service must keep customer experience at the center of their focus or suffer the same diminishing returns as the digital advertising sector.
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