This report reviews the possible evolution in the market for advertising on television and TV-like services given the likely developments in technology, consumer behaviour and service delivery by broadcasters and others. It was commissioned by Ofcom to complement their own research and to enhance their understanding of the perspectives of leading companies. This report is not part of any formal Ofcom process, but is intended to help Ofcom assess the possible implications of market developments on its role in protecting audiences and ensuring the provision of certain forms of TV content.
The report draws on interviews with industry leaders conducted by Jon Gisby in the final quarter of 2012 and the first quarter of 2013. Interviewees were typically C-level executives, and were selected from leading broadcasters, digital distribution companies, platforms, producers, agencies and brands. In addition relevant experts from consultancies, industry bodies and Ofcom itself were included. I am grateful for their time, insights and candour. In return I have promised discretion and confidentiality as appropriate.
The scope of the review was enormous and assessed a broad range of opinions and perspectives from industry players, and of the trends and developments in technology, consumer behaviour and the regulatory environment. Its value will lie in summarising insights derived from industry practitioners and desk research, but these insights are inevitably partial rather than exhaustive.
The report starts with a brief review of the current UK environment for TV advertising, the broadcast services it supports, and the widely held assumptions on likely developments by 2020. It then reviews the highly fragmented and rapidly changing market for consumer technology that is TV and video related, and the possible impacts these changes will have for audience behaviour and video / broadcast services. A framework for understanding the developments in advertiser funded content is presented, identifying how existing and new opportunities may develop given the existing regulatory frameworks of (e.g.) the Ofcom Broadcasting Code, the BCAP Code: the UK Code of Broadcast Advertising, the CAP: UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing and the ATVOD Code for On-Demand Programme Services. Case studies will highlight how brands are exploring these new opportunities to engage with audiences.
The project was not designed to review the impact of existing regulations, nor to develop recommendations on changes that may be considered. Rather, its purpose is to raise awareness and understanding, to stimulate debate and discussion, and to clarify the objectives and priorities of ongoing work within Ofcom. However, where specific observations about regulation have been put to me, I have included them. I have also included some general recommendations to guide Ofcom's ongoing asssessments of the market.