Gray Matters: on demand ads, ad saturation and a new New Zealand reality

Time for a stretch

Press the pause button while watching your favourite show on TVNZ OnDemand and up pops a message like, “Time for a stretch”, sponsored content from KFC, an ad for Big Cheese. Pause ThreeNow OnDemand and you get….a missed opportunity – no ad just a pause in the action.

“For consumers and marketers, the rise of streaming video on demand (SVOD) is nothing short of a revolution. Now advertising, as well as content, can be tailored to specific consumers or niche genres. And not only can ads achieve the scale associated with TV — they can be tailored to those same specific consumers,”commentary on MediaPost says, writing about the advanced ad experiences beginning to expand as streaming services look to fund their programming.

Hulu programmes like The Handmaid’s Tale may be seen on Lightbox in New Zealand as Hulu is unattainable in New Zealand, unless you have a VPN, but the streaming service that is second only to Netflix in America was at the forefront of a strategy known as, “viewer-first advertising: The belief that by helping to deliver a better advertising experience to viewers, they will be more engaged with the content, and more receptive to brand messaging from advertisers,” Jeremy Helfand, Hulu’s vice president and head of advertising platforms, told Video Insider.

As Helfand says, “opportunity to engage with consumers has never been stronger” and TVNZ have taken the bull by the horns. Buy a new Panasonic 55” TV and be excited at seeing the TVNZ OnDemand logo in the apps but be disappointed that the ThreeNow option is missing. In a competitive TV streaming landscape, it would appear that TVNZ is winning the local battle against not only Three but also Spark’s Lightbox and quite possibly Sky’s Neon.

In October last year, StopPress published and article showing TVNZ OnDemand had achieved “a record 102 million streams in the last 12 months – the equivalent of every New Zealander streaming over 20 episodes of Shortland Street a year”.

At the time, TVNZ director of content, Cate Slater, was quoted: “We want all eyes on us and the stories we tell. To do this we need to be bold and brave in our choices”. But for advertisers and marketers it is not just the larger than expected catalogue of content that impresses but the unique advertising opportunities afforded.

This week, FutureFive published an article by Sara Baker, writing: “Kiwis are opting for more uncapped broadband plans as their appetite for streaming TV gets stronger than ever.” Quoting Canstar Blue’s Broadband Customer Satisfaction Survey Baker reported that, “48 percent of polled Kiwis now use TV streaming services ­— more than double the number of paid subscribers in 2017”.

StopPress writer, Caitlin Salter, wrote in August last year: “there is no denying we are moving to SVOD platforms in droves. Nielsen’s ‘New Zealand Connected Consumer Report 2018’ showed that 1.2 million New Zealanders have access to a Netflix subscription, equating to approximately 434,000 households across the country”. She also quoted Carat general manager, Alex Lawson, who said that “media buyers and marketers should be welcoming the potential for advertising on Netflix”.

I would say that with free online television service TVNZ OnDemand having more than 1.8 million local subscribers, the advertising opportunities are closer to home.

Too much of a good thing

“Ad saturation and over-targeting is putting the marketing industry at risk,” says an article in Marketing Week. Like in the UK, Kiwis are seemingly becoming tired of seeing the same ads over and over again, particularly online.

“Brands are treading an increasingly fine line between advertising that is relevant and advertising that over-targets, with bombardment causing consumers to become ever more mistrustful and fed up with online advertising,” Marketing Week says.

“Over the last 50 years, we have gone from being exposed to 500 brand and advertising messages per day to an average of 5,000 messages a day, according to marketing firm Yankelovich. “Everywhere we turn we’re saturated with advertising messages trying to get our attention,” Yankelovich president Jay Walker-Smith says.

According to The Drum, quoting a Deloitte mobile consumer 2018 survey, Australians are checking their phones 80 million times more often than they were last year. Collectively, this is a massive 560 million times per day, or individually, more than 35 times a day on average. It is unlikely New Zealand figures would be dissimilar.

Already, mobile will surpass TV as the medium attracting the most entertainment minutes among US viewers this year, according to a 2018 eMarketer report.

“More digital touch points means more data…and provides more depth to the promise of people-based marketing,” says Indy Khabra in The Drum article. Khabra is the national managing director for Amnet, the programmatic buying arm of Dentsu Aegis Network, in Australia and New Zealand. “Whether it is on a TV, a smartwatch, a billboard, or even a refrigerator — anywhere there is or will be a screen represents an opportunity to tell a brand’s story,” he says.

Despite this, it would seem that New Zealand marketers are spending too much of their budgets on customer acquisition and not enough on customer retention. With an abundance of loyalty schemes, it may seem that local marketers understand that keeping customers happy and engaged should be the priority. But are many, in fact, only paying lip service to the importance of customer retention?

An article in Forbes highlights the common understanding that customers share their needs, wants and wishes at various stages of the customer life cycle. However, it would appear that despite the unstructured data generated by human-to-human interactions forming almost 80 percent of business information (according to Gartner) this gold mine of insights is effectively being used in very few businesses.

Face to face interactions at point of sale, contact centre communications, customer reviews, emails, surveys, and the like are all too often ignored or at least not acted upon and most product failures or disappointments are never acknowledged or understood.

With the obsession of growth, and communications across multiple screens, devices and traditional media, large sums of money are being thrown at advertising campaigns to attract new customers while old ones are leaving out the back door.

I’ve seen some businesses spending large chunks of their budgets identifying prospects only to ignore them after the initial contact. In many instances a prospect might take a couple of years to make a decision on a major purchase and often, the marketer will have grown tired of maintaining contact.

The “spray and pray” of mass advertising may have reached saturation but with big data and AI adding to personalisation, we now have the ability to treat customers consistently across all touchpoints, leading to Increased relevance, better understanding and better engagement.

A new tourism reality

The announcement of a government-initiated review of Tourism New Zealand has come at a time when Harvard Business School contributor to Forbes, Danielle Kost, asked, “can branding sell a country, like it does cereal?

Tourism NZ has spent about 80 percent of its $45.3 million annual advertising budget in digital channels, but the government’s issues with Facebook and Google-owned YouTube, which have been widely condemned for allowing offensive content to be run on their sites, may see a return to more traditional media, just like cereal advertising.

Kost poses a question relating to Israel’s problems promoting tourism to that country: “Memories of failed peace talks tend to loom larger than Israel’s image as a start-up nation. Instagram posts from Tel Aviv’s gay pride festivities or the buzz from winning the recent Eurovision song contest may not be enough to overcome decades of TV footage of soldiers and tanks that linger in the mind.”

While the Christchurch shootings may not have the same effect as the ongoing issues in Israel, the same questions have to be asked about the new perceptions of New Zealand as a safe country to visit.

For Tourism NZ the mosque massacre came on the back of tourists becoming wary following killing of British backpacker Grace Millane in Auckland in December.

Kost summarises New Zealand’s historical international appeal like this: “Twenty years ago, before The Lord of the Rings film trilogy elevated New Zealand as a fantasy destination, the country was struggling to set itself apart from Australia. In-depth interviews, focus groups, and surveys revealed that New Zealand could appeal to a specific stripe of unpretentious traveller—one who values adventure, freedom, and nature. The resulting “100% Pure New Zealand” campaign helped boost tourist visits by 50 percent from 1999 to 2005.”

In 2019 this has all changed and New Zealand needs to re-establish its tourism credibility – time for more In-depth interviews, focus groups, and surveys.

As Krost writes, “the qualities a country promotes must reflect reality”. In 2018 Tourism New Zealand moved away from an emphasis on landscapes to people and culture, but still, the doubts around the ‘100% Pure’ message remains.

Any new message has to be relevant, appealing, enduring and different if it is to overcome the new negatives. After all there are loads of wonderful destinations for tourists that are closer and therefore cheaper to reach.


“The biggest data story of the year in New Zealand is missing data” — Harkanwal Singh tweets about the census debacle.

About Author

Graham Medcalf is a freelance writer and owner of Red Advertising.

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