ITV and Disney deal shows CTV must focus quality

Could the deal shift the perception that quality content is stuck behind paywalls and open the door to more free services? What does this mean for broadcasters and advertisers?

By David Price, Managing Director,  The Grove Media

ITV and Disney’s announcement that they would be carrying each other’s content on their streaming services took many by surprise, but it makes perfect sense.

On Disney+, ITV shows now available include Mr Bates vs The Post Office and A Spy Among Friends. Disney content on ITVX include The Bear and Only Murders in the Building. All high-quality programmes.

The deal really is a win-win. Viewers get to see premium content previously behind paywalls — something that can increase content visibility and brand equity. Disney+ audience skews younger, whereas ITVX is older and broader, so there’s clear benefit for advertisers.

Both media owners are rich in audience data, so the opportunity for fine-tuning campaigns is surely high. There are also targeted ad opportunities, such as dynamic ad insertions and contextual advertising that would be good for advertisers. And there is clearly the obvious upsell subscription opportunities between the two providers.

But if you step back from the immediate benefits — for both audiences and platforms — there is a bigger-picture issue here. Could this deal start to shift the perception that quality content is stuck behind paywalls and open the door to more free services like ITVX? In this way, cost is no longer the primary deciding factor for viewers in choosing a platform — it’s the quality of the content.

And, frankly, it’s premium content that’s really at the heart of this deal — something that too many connected TV (CTV) channels are lagging behind with. What the partnership actually highlights is how CTV in the UK has evolved from having an “audience numbers” issue to one that’s now fundamentally about quality — of both content and audience.

Three or four years ago, advertising-supported VOD audiences weren’t big enough to compete with subscription VOD and broadcaster VOD. Now with programmatic, you can easily build CTV audiences — but where’s the quality, both in terms of content and audience profile?

We’ve been chasing audience numbers in CTV for too long, when what we really need to focus on is premium content and environment. Good audiences naturally follow good content.

So how should CTV make the necessary shift to quality?

TV channels: Take responsibility for quality content

Media owners really need to lead the charge in careful selection of quality programming to enable brands to shift to a more curated content/audience-first approach.

Disney and ITV have clearly shown a way forward for the market to focus on quality content. It’s in everybody’s interest if we start to see a shift from broadcasters and streamers seeing each other as competitors to becoming mutually beneficial collaborators.

We need to see business models coming into play with content swaps and shared monetisation to ensure that premium content levels are not only maintained but continually enhanced. Surely it’s only a matter of time before other broadcasters and streamers get in on the action?

There are real opportunities for some of the major players to follow in the footsteps of ITV and Disney. Let’s start with Netflix. A possible partner could be Channel 4 or BBC iPlayer. This partnership would potentially offer both local relevance and ad-supported growth.

The next obvious streamer to look at is Amazon Prime Video. Maybe it could team up with Sky or possibly even ITV Studios? The content opportunities would arguably be in sport and drama co-productions.

And then we have Paramount+. Not quite so obvious in terms of partner, but maybe STV or Channel 5? Either of these deals would enable regional expansion in the UK.

If the TV market moves in this direction, we would see more careful selection of quality content. The audiences for this quality content will then shift brands towards more curated content and audience-first/outcomes-based strategies. This really is the direction the CTV market needs to take.

In line with this shift, we need to see media owners in CTV measuring beyond impressions. We need the emphasis placed on results, not just CPMs. Quality content will inevitably drive stronger brand lifts, engagement and recall. And, ultimately, in CTV we must recognise that relevance beats reach. This means prioritising audience-based addressable buying.

Advertisers: Focus planning and buying on quality

To get the full benefit of CTV, advertisers need to shift thinking away from numbers to quality. A good way to start is to stop treating CTV like digital display. Programmatic clearly has its benefits, but broad-based programmatic buying is not fully in step with premium, viewer-driven services.

Think about brand safety. Chasing cheap CPMs tends to place advertisers in low-quality inventory or runs the risk of appearing in suboptimal environments.

Advertisers should demand transparency and accountability from CTV channels. They should focus on first-party data and augment with high-quality, trusted, third-party segments.

Buying should shift to focus on content quality and premium streamers. Yes, premium inventory costs more, but it performs better. Insist on quality content and use smart audience-targeting techniques, and make sure you know where your inventory is playing out.

And as advertisers move further into a quality-led focus on CTV, there are a host of smart strategies and tactics they can adopt to make the most of their spend. For example, targeting complementary audiences, leveraging premium content for brand association, planning for rotating content and exploring opportunities in branded content.

Getting the right audience numbers and reach is clearly important in CTV. But without the focus on quality, campaigns are simply not going to deliver on the results that matter.

It’s inevitable that as CTV found its feet, there was greater attention on audience numbers, but as the market matures the focus must be on the quality of the content. There are real opportunities for TV channels and advertisers if the market pursues a committed path towards high-value, quality content.

Article originally appeared on The Media Leader, link below

https://uk.themedialeader.com/itv-and-disney-deal-shows-ctv-must-focus-quality

Only Murders in the Building image courtesy of Disney