This document discusses the relationship between television and social media. It makes three key points: 1) Television is moving towards more social and interactive features as advertisers demand new ways to engage audiences, but traditional TV players want to maintain control over this evolution. 2) Online advertising has already surpassed television advertising in some markets, challenging the traditional TV business model. 3) New technologies like connected TVs, tablets, and digital video recorders are creating opportunities for more targeted and interactive forms of television advertising.

1. Social telly
Television and social media
Vincent Létang, Senior Analyst,
Head of advertising
London, February 8, 2011
Social Media Week

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3. Television: a social media?
Some thoughts (1)
• TV advertising is challenged from various sides: outgrown by pay TV
revenues globally, and outgrown by online advertising in advanced
markets (e.g. UK)
• TV broadcasters need to innovate to keep up with advertisers
expectations in the digital age (accountability, scalability, interactivity
etc)
• Television is ‘the’ original social medium (event, community, coffee-
machine chat, reality TV voting)
• Next step is real-time, many-to-many, monetizable interaction
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4. Television: a social media?
Some thoughts (2)
• There already are measurable, large scale, return path platforms for social
usage:
• FB and Twitter on laptops and smartphones (e.g. 2010 election debates)
• Tablet PCs will bring that pattern to another level: 8m users by 2014
• Connected TVs will create further scale and new opportunities by bringing
social tools/brand into the TV
• Addressable linear advertising technologies (DVR-based or IP based)
combined with social features generate new marketing opportunities
• Addressable TV plans are currently demographics or preference-based
• ‘socially-targeted’ ads would increase engagement further
• However, telly still has a future as a largely passive, family entertainment
ad-funded medium: 2010 was a record year for TV-viewing across Europe
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5. Television: a social media?
Some thoughts (3)
• A very open and competitive market place
• Traditional TV players/brands (channels, programme brands, pay TV
providers, EPG operators) fight to maintain the control of how TV gets
social (e.g. the ‘anti Google TV’ cartel of virtually all broadcasters in
France and the US.
• They are already doing well in keeping control of key online VOD rights and
monetizing them.
• Relaxation of branded content and product placement creates further opportunities
• But internet giants see connected TVs as their Trojan Horse into the
living room
• Consumer electronics manufacturers may have to take sides in that
battle
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6. TV advertising: a mature market
• Linear TV advertising suffered slow growth in the 2000s
• Pay TV has already outgrown advertising as the main form of funding for
television
• ‘Advanced ‘ TV advertising revenues slow to compensate
Television revenues by type, Western Europe (%)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Pay TV revenues Public funding Advertising revenues
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7. TV advertising: a mature market
• Online advertising already bigger than TV (if keeping search in)
• (behavioural) targeting, social and video are rejuvenating display since 2010
• Facebook reached approx. $1.5bn in global revenues in 2010 (source GS)
Online advertising and TV advertising in the UK (2008-2015, £m)
8,000
7,000
Total internet TV
6,000
5,000
4,000
3,000
2,000
1,000
0
2008 2009 2010 2011 2012 2013 2014 2015
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8. TV advertising: a mature market
• After two horrendous years (2008-2009) and the 2010 ‘mechanical’ rebound,
TV ad revenues growth will slow down dramatically again in most markets
Europe’s Big Five Markets: TV NAR 2009-2011
15% 14.1%
9.6% 8.7%
10%
5.3%
5%
1.3%
0%
-5%
-10%
-15%
-20%
-25%
France Germany Italy Spain UK
2008 2009 2010 2011
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9. ‘Advanced’ TV advertising now
available through multiple platforms
‘Advanced’ TV advertising (ATVA)
1. ‘Broadcast’ platforms 2. Online TV 3. Connected TVs
Alternative, interactive and/or Alternative, interactive and/or On-demand TV content and alternative
addressable forms of advertising in addressable forms of advertising on content, serving platform for ATVA
the lean-back ‘telly’ environment lean-forward, personal devices Addressable advertising (IP cloud-based)
Built-in open internet TVs
Two-way, ‘walled-garden Online TV (ad-funded FVoD)
‘platforms: IPTV, digital cable
Mobile TV (apps, players) Connected devices (set-
top boxes, game consoles)
Broadcast technologies:
Digital Signage
satellite, terrestrial
Red-button interactivity
STB-based pushed branded content
Addressable advertising (DVR-based)

10. DVRs
Europe trails the US
Penetration of pay-TV DVRs (2007-2013)
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
USA UK France W. Europe Germany Italy Spain
2007 2009 2013
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11. Connected TV: Connected devices
to be mass market by 2014
US: active connected EU 3: active connected
devices (m) devices (m)
25.0 25.0
90% of all TVs sold in
Europe will be
20.0 20.0 connectable by 2014
15.0 15.0
10.0 10.0
5.0 5.0
0.0 0.0
2009 2014 2009 2014
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12. Tablet users set to reach
8.6m by 2014
UK: Tablet and iPad users (m)
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2009 2010 2011 2012 2013 2014
Tablets iPad
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