With another year behind us, it’s time to take stock of what’s ahead for broadcasters in the new year. Without question, we are living in tumultuous times. Every day it seems there’s a new threat, a new competitor, a new “next big thing” to invest in, and of course, higher goals to hit.
So, with 2018 in the rearview mirror, here are five big things to watch that will affect all of us in the coming year:
1. 5G. While it’s in the early stages of its rollout currently, and won’t be concluded for another two years, the advent of 5G technology is going to completely change the way we interact with the Internet . . . again. 5G technology will bring speed to the Internet we’ve never dreamed of as we will literally be able to access content immediately. We’ll be able to download videos and programs in seconds. And most importantly (we think), this will have an explosive impact on the Internet of Things – the way devices will talk to each other.
One area where 5G will have the largest impact is in the car. Today’s automobiles are computers on wheels. They have enormous computing power, generating a ton of data about the driver, their habits, and the ability for the car to determine everything happening around it through a series of sensors. This is the basis for autonomous driving.
5G is going to incredibly increase the car’s computing power, so not only will driverless cars become a reality, but the way the car connects consumers to retailers, the payment system, and more opens up the reality for the car companies to develop financial relationships directly with advertisers and local businesses. This has the potential to empower the local businesses to bypass the necessity to run advertisements, since their content (location, coupons, etc.) is right in the dashboard, giving them a direct relationship with the consumer.
This will be a major focus of ours at CES next month and expect to hear more about 5G in the coming months.
2. More Consumer Control. If you’re in the television business, I don’t have to tell you about cord cutting. And if you’re in radio, you’ve heard a ton about podcasting and on-demand content. This isn’t going to go away, and in 2019, all trends point to continued growth in consumer control.
In the television industry, there are many factors conspiring to create this stress: TiVo and DVRs, the cost of cable vs. other services like Hulu and Apple TV, and then there are the networks themselves, investing heavily in their own digital platforms and using the airwaves to move the audience there.
In radio, growth of podcasting continues, but at a relatively slow pace. Unlike in television, where options are easy to access, there are barriers to the way a consumer can discover, download, and listen to a podcast. If you own an Android device, it’s especially clunky.
We continue to be big believers in the power of local for both radio and television broadcasters. This is the hill you own, and it’s the hill you control. In radio, local content and personalities separate you from your digital competitors, and in television, the immediacy of local news can’t be co-opted by anyone.
And you might be surprised to learn that in research we’ve conducted and seen among Millennials, information and news that affects them and where they live is incredibly important. So while broadcasters will continue to face these challenges, the solution rests in what you do best – local broadcasting.
3. Revenue Trends. While it’s going to be hard for broadcasters to hit 2018 comp levels due to the huge amount of political advertising, there are reasons to be optimistic. Broadcasters continue to invest in digital solutions, and with local dollars shifting to digital, the industry is in the best position ever to capture a share of these dollars.
We are also seeing the emergence of a closer partnership between broadcasters and local businesses as they team up to fight against e-commerce providers like Amazon. Smart broadcasters are creating strong local programs to promote local businesses. There is awareness in many markets that you are in this together, and this has led to some significant opportunities.
And then there’s the question of the economy, but we’ll leave that for another day since no one can predict that with any certainty.
4. Social Media. You may or may not be aware of the inroads Google and Facebook have made in your market by capturing the largest portion of digital revenue. If you aren’t, speak to some of your clients about it. These two digital behemoths are capturing a ton of revenue because they are relatively easy to buy and provide solid metrics and attribution.
But if you’ve seen the news lately, the credibility of digital advertising has been rocked. One of the biggest stories of 2018 was Procter & Gamble’s cancellation of hundreds of millions of dollars of digital advertising because they lacked confidence in its impact and reporting standards, and shifted some of this money to radio. Concurrently, Facebook in particular is under fire for privacy issues and more, which have not only led to a decline in membership, but also will lead to a flurry of Congressional investigations in 2019, new regulations, and possibly even a break-up of the company.
While all of this is happening, the credibility of local broadcasters remains rock solid. You are trusted citizens in your market (ask your clients if they’ve ever tried to call Facebook or Google with a question about their advertising). You can respond quickly to advertiser needs. Whatever digital solutions you provide will be backed by a team of people based locally.
5. Attribution. There is growing demand among advertisers for attribution – in other words, what was the return on their advertising investment? This is an advantage digital competitors have over broadcasters because they have a direct, one-on-one relationship with their users. So they can easily measure the impact of a banner ad (clicks), search, and more.
By the nature of the industry, it’s much harder for broadcasters to measure impact. However, there are a lot of positive changes happening. Companies like Veritone, Analytic Owl, and Elytics provide ways of measuring what happens when consumers hear an ad or a mention of a client on the air. Stations are developing more robust email databases in order to better track what happens when they send out a coupon or other client information.
This is an important area of opportunity for broadcasters and we expect to hear a lot more about this in 2019 because the clients are demanding it.
Obviously there’s a lot going on. If you have any questions about these trends or others, please feel free to reach out to me at firstname.lastname@example.org.
Have a happy, healthy new year.
-Paul Jacobs, Jacobs Media
The WBA Digital Hotline is a free service of the Wisconsin Broadcasters Association. If you have any questions relating to your digital, social, or mobile strategy, contact the hotline at 248-353-9030 or via email at email@example.com.