TechTalk: The TV Edition

Copyright GfK | TechTalk Edition Two 2012

editorial 2

It’s difficult to think of a technology that has been more important and influential than TV.

For a large part of the twentieth century, TV played a key part in many of our lives, entertaining and informing, serving as a virtual fireplace. The latest technology evolutions, such as Connected TV, have the potential to completely change this TV-viewing culture and experience. Today, we can choose from an almost limitless selection of content, challenging a past era of restrictive, scheduled viewing. Additionally, the rise of the ‘second screen’, mainly in the form of smartphones or tablets, has added a new dimension to TV viewing, enabling us to engage with content in new ways.

This edition of TechTalk explores how these emerging technologies have been adopted globally and have changed TV-viewing behavior, sharing highlights from our global survey. We also look at upcoming developments, such as the exciting opportunities presented by natural user interfaces and the emergence of new creative ‘indie content’.

The role of advertising in this multiscreen landscape deserves particular attention as it offers effective ways for industries to build brand relationships with consumers through more active engagement.

Finally, as smartphones enter the TV space as first and as second screens, it’s worth looking at the developments of smartphone apps and the trends we are seeing across the consumer journey for these devices.

Happy reading!

Anette Bendzko

Global Lead Technology, GfK Consumer [email protected]

the tv editionTECHnoLoGy TrEnds, opInIon And InsIGHT | EdITIon TWo - 2012

techtalk

THE TV EdITIon

Copyright GfK | TechTalk Edition Two 2012 Copyright GfK | TechTalk Edition Two 2012

the tv edition 4

driving engagement through the second screen

p.09 relax, lean back and discover!

p.13 advertising cut through in a multiscreen environment

p.19 the rise of online video advertising

p.23 the emergence of a new global tv landscape

p.29 app design and the shift towards fun and creativitY

p.35 whY a successful indie media industrY is good for the consumer

p.41 natural user interfaces are here to staY

p.45 shortcuts: consumer decision making in the real world

p.49 smartphone experiences in emerging markets

p.53 contact

p.05

contents


The TV-viewing experience has always struggled for our undivided attention; from screaming children to writing the shopping list, we’ve unknowingly multitasked while watching TV. yet a new challenge now seems to be threatening the TV-viewing experience - the rise of the ‘second screen’.

our shiny new laptops, tablets and smartphones tempt us away from the TV experience we initially set out to enjoy. Whether it’s quickly checking Facebook during a quiet moment in the soccer match, or texting a friend to arrange lunch, the distractions are numerous and easily managed while watching TV. However, when it comes to multitasking, we generally sacrifice the quality with which we’re able to execute each task. And at first glance, in the context of the proliferation of second screens, it appears to be the TV experience that suffers. How many goals have been missed during that quiet moment when we were quickly emailing a friend?

since the advent of the first app store in July 2008, many concepts have been tested that focus on similar second-screen multitasking (otherwise known as second-screening) use cases - for example, watching TV on your phone while having an IM chat with your friend. While being received favorably, these types of use cases typically fail to ignite genuine excitement. despite fulfilling a functional consumer need for greater efficiency through multitasking, these use cases ultimately fail to address the more emotional consumer need for an engaging and immersive TV experience. perhaps this goes a long way to explaining why the second screen

has struggled to really gain traction in consumer TV-viewing ecosystems.nevertheless, over recent months, greater recognition has been given to the potential of the second screen in re-engaging consumers with their TV-viewing experiences. It is increasingly viewed as an enhancer, rather than a detractor, to the overall TV experience. And, as such, with a revival of the second-screen use case, this time it seems to be accompanied by genuine consumer excitement.

The organic rise of the Twitter hashtag has much to do with this revival. By spontaneously tweeting about TV content with an accompanying and relevant hashtag, users ensure that like-minded viewers can discover and read their tweets. Through enabling consumers to bond over topical TV conversations, Twitter has provided a compelling use case for the second screen and one that TV producers have been quick to capitalize on.

reality TV shows in particular have benefited from being able to influence and share opinions on the shows’ live events. A simple Twitter hashtag trend flashed up at the end of each act is enough to drive consumers to tweet their thoughts on the show they’ve just watched. The accompanying ‘buzz’ around that TV show

driving engagement through the second screenbY rose tomlins

5 the retail edition the tv edition 6


What is the potential impact of smart TVs… from a cultural and futurology perspective?

In the latter half of the 20th century, the TV has created a focal point in the home, a kind of virtual fireplace where people can gather and share a viewing experience with the whole household. More recently, with the introduction of mobile viewing screens, the viewing experience has not only fragmented audiences, but has become more personal and customized.

yet the connected TV is beginning to change this fragmented experience to something that can again be shared, and this time shared globally and in real time. This obviously presents a slightly paradoxical situation where people in the same house (or even in the same room) are not sharing TV in a physical sense, but are instead sharing content with other groups of people that they’re connected with ‘virtually’ through social media.

It is the combination of social connectivity with interactive gaming, and ‘hyper-real’ viewing experiences, which will ultimately impact how we use media in the long term. Imagine a scenario where you can ‘virtually’ enter a tabloid talk show and shout at the husband who cheated on his wife via your avatar! or, enter the scene of a live crime drama and help the detective look for clues along with your friend’s avatar.

Inevitably, there are some challenges to ‘selling in’ these new features and

technologies to people. From the outset, as shared viewing experiences become ever more socialized, content providers will need to offer audiences ways to filter or control who they are sharing the viewing with.

The viewing experience is also under the threat of dilution as people grapple with the intrusive aspects of connected content and devices, particularly as advertisers start to take advantage of opportunities that such new developments present.

Broadcasters will have to keep up with the new features and options available to audiences, perhaps pushing them to offer more hyped and extreme content where boundaries are broken and opinion on whether this is right or not polarizes the viewing audience.

Ultimately, the ‘smartening’ of TV provides another platform to fundamentally impact on the cultural landscape, much as it did in the last century.

with your Connected TV. so, although TV viewing may arguably remain a predominantly first-screen experience, interacting with TV content is starting to make more sense when conducted via the second screen. The ability of second screening to facilitate a more pleasurable experience when it comes to data input (keyword searches, tweeting etc.) is one of the key benefits these solutions seek to capitalize on. Later in this TechTalk edition, we explore this in relation to advertisers who increasingly seek to capitalize on second screening by advertising on all screen simultaneously.

A final variation on the second-screen solution is a more niche-use case, as demonstrated the Miso app6. Miso

6 http://gomiso.com/

bases itself around the concept of ‘fan sideshows’ that enable consumers to engage with like-minded fans of their favorite TV show, sharing clips and lyrics or even sourcing the retailers that stock their character’s favorite outfit. The idea is fun and ideal for cult TV shows such as Us comedy-drama series Glee, where fan engagement with the characters and plotlines is incredibly high.

The emergence of these TV-sidekick solutions indicates a new role for the second screen in re-engaging consumers with their favorite TV shows. Far from being a threat and challenge to the ‘first’ screen, the second screen may actually turn out to be its savior.

is what keeps producers happy, driving consumers to phone in and vote for their favorite act. Beyond the reality TV show, Twitter is being used to creatively engage with consumers, as demonstrated by the UK teen drama ‘Misfits’1 . producers utilized a sophisticated online and viral campaign which saw the actors and actresses create ‘character Twitter streams’ that they updated during and after the show. These initiatives added an extra dimension to the action unfolding on viewers’ ‘first’ screens.

Following the success of Twitter in reviving second screening, a noticeable number of more sophisticated TV ‘sidekick’ solutions have emerged. Each is specifically designed to drive greater TV engagement through, and raise the profile of, the second screen. Broadly speaking, there appear to be three different types of sidekick applications currently available to TV viewers.

The first type of TV-sidekick solution is one that is custom designed to work alongside specific shows. For example, a popular quiz show syndicated globally, ‘Million pound drop’ ’2, offers a custom-built site where viewers can actually play alongside quiz show contestants using the second

1 http://www.e4.com/misfits/2 https://www.themillionpounddrop.com/

screen and compete against their friends. Monterosa3 , the solution developer behind this second-screen solution, states on its website that the second screen actively encourages viewers to engage in the shows they watch. Far from distracting viewers, it gets them talking more about those shows with their friends, generating positive word of mouth. Monterosa’s position is clear; the second screen exists to make TV viewing an experience by involving viewers, making them feel like they are part of something special. Another example of this is the smartphone application developed by Fox TV for the Us cult forensic drama ‘Bones’4 . The app allows viewers to participate in the show, solve cases, and even purchase songs that feature in the show.

The second type of TV solution focuses around the Connected TV proposition, utilizing the second screen to facilitate greater interaction. While Connected TVs are great for opening a range of content onto screens, when it comes to navigating through complex on-screen program guides, the experience can suddenly become a lot less intuitive. solutions such as Microsoft smartGlass have been quick to exploit the potential benefits of a second-screen solution to aid discovery and navigation, in this case by using a Windows tablet to act as a smart remote control, game controller and navigational tool in one. An example of a similar solution (but in the smartphone application space) is Zeebox5 , an app that enables you to interact with TV content via your second screen in a variety of ways. This includes seeing what your friends are watching, chatting to others about shows, getting live stats for sports matches and remotely controlling your Connected TV. The fact that all this can be done on your tablet, wirelessly, with a touch screen keyboard, makes interacting with your Connected TV an altogether more exciting and immediate experience.

What these solutions have in common is a recognized potential for using the second screen as a more intuitive and engaging means with which to interact

3 http://www.monterosa.co.uk/4 http://www.fox.com/bones/mobileapps/5 http://zeebox.com/uk/

“what tv-sidekick solutions have

in common is a recognized potential for

using the second screen as a more

intuitive and engaging means

with which to interact with Your

connected tv”

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Want more information on this article?-> rose Tomlins [email protected]

It’s Friday night, you’ve finished work, you kick off your shoes, pour yourself a glass of wine, put your feet up on the sofa and turn on the TV in time to watch your favorite show. The program starts and you sit back and start to unwind… but will such evenings remain the same as we embrace Connected TV?

Accessing and viewing ‘regular’ and ‘one-off’ shows is a familiar experience for us all, typically governed by a familiar time-based program grid or, more often than not, by simply entering the channel number into the remote control at the appropriate time. It’s something that has become so habitual that we do it without even really thinking, simply discovering what’s on by flicking through the channels or scanning the on-screen guide.

Typically, unearthing new TV programs has been a fairly ‘lean back’ affair too. With traditional TV, we have taken two clear paths when it comes to content discovery. The first of these paths is ‘informed discovery’ where we watch something that’s been brought to our attention by friends, via social networks, or on adverts. The second of these is ‘stumbled discovery’, where we ‘accidentally on purpose’ come across something new, often by flicking through channels or a

time-based electronic program guide grid. Both of these paths take us on a relatively passive approach to content discovery, with little time investment or up-front planning required.

However, as Connected TVs start to pool content from the internet onto our TV screens, the way in which we watch, select and discover such content is set to change. The manner in which we flip through our TV guide and the approach we adopt when browsing the internet are very different. Indeed, our motivations for using the internet and watching television are at odds. Whereas TV discovery can be described as a ‘lean back’ or more passive experience and one that we often set out on with the purpose of entertaining or relaxing with friends and family, internet discovery is a more ‘lean forward’ or proactive experience, often undertaken alone and usually for the purpose of active information gathering.

relax, lean back and discover!bY emma roberts

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platforms for integrating the active and passive discovery experience. There are several immediate advantages to engaging with the second screen in this way. For example, the second screen allows viewers to ‘lean forward’ into their more active discovery mode without disrupting the ‘lean back’ experience for those watching TV with them (in other words, on the first screen). In addition, inputting text fields and searching for content is arguably much easier when attempted with a touch screen interface on the second screen rather than a numeric keypad on a remote control on the first screen.

Consequently, the main challenge facing hardware manufacturers and service providers is how to ensure that TV discovery continues to be a ‘lean back’ and relaxing experience while also enabling consumers to ‘lean forward’ at key moments. There is a danger that employing an internet-style interface will distract from the familiar television viewing experience. And there is no evidence to suggest that consumer-viewing behavior is going to change. research1 has shown that electronic program guides (EpGs) should be designed to suit the ‘lean back’ experience as much as possible and not distract from

1 Bonnici, s. (2003) ‘Which channel is that on? A de-sign model for electronic programme guides’, procee-dings of the 2nd European Conference on Interactive Television, 49-57

the primary aim of watching television.

so, if television viewers prefer to be given information while internet browsers prefer to seek information, there are clear design implications for future EpGs. successful EpGs need to build seamless links between these two different modes of discovery, enabling consumers to switch between those modes with minimal interference. However, a number of possible hurdles have been identified. A critical pain point that needs to be bridged when integrating these two solutions is that in ‘lean back’ mode we simply need to push a button and the desired experience is delivered to us, whereas in ‘lean forward’ mode we have to actively input a text field, search for relevant content and actively prioritize and select the experience we want to achieve. The critical crossroad arises when we attempt to use traditional TV discovery solutions to enable a more proactive discovery experience. Traditional EpG and TV remote control offer poor support to the ‘lean forward’ experience (as anyone who has gone through the frustration of typing out a keyword search using the number pad on their remote control will readily agree). A further setback to seamlessly blending these dual-discovery modes is the need to consider the social context in which we often watch TV. The ‘lean forward’ discovery experience of the internet which is typically conducted alone is not necessarily conducive when the room is full of friends and family shouting at you to change back the channel and ‘lean back’ into the viewing experience.

The bridging solution for these two discovery modes is likely to come in the form of the ‘second screen’. Here, companion devices such as smartphones and tablets are viewed as the appropriate

“the main challenge

facing hardware manufacturers

and service providers is how to ensure that

tv discoverY continues to

be a ‘lean back’ and relaxing

experience while also enabling

consumers to ‘lean forward’ at keY

moments


Emma roberts is currently on maternity leave but if you want more information on this article, you can contact her colleague below:-> [email protected]

so what will be the EpG of the future? It’s clear that TV discovery will become smarter and more proactive as Connected TVs enable powerful internet-enabled discovery solutions. yet it is crucial that manufacturers understand the ‘change of behavioral play’ to succeed in the home ecosystem. With our TV-viewing experience rapidly evolving, ironically manufacturers must do anything but lean back and relax.

What is the potential impact of smart TVs from the perspective of a home entertainment provider?

The smart TV, with its large screen and touch-of-a-button access, has the potential to widen the appeal of digital and interactive content, provide opportunities to merge this content with broadcast TV, and enhance shared real-time experiences. other devices have already competed for the attention of the wider

household audience by offering a converged digital-content experience (games consoles, media centers, set-top boxes etc.). However, these have always met with barriers that have stopped them achieving full ‘ownership’ of home entertainment. In particular, issues include appealing only to a smaller, more tech-engaged audience (e.g. hard-core gamers, tech savvies etc.), separating the digital and broadcast experience (despite best efforts) and not fully integrating their content and services with other device ecosystems.

As the TV format is ubiquitous and used by everyone, the smart TV evolution presents the best opportunity in helping content providers and device manufacturers to finally fully ‘own’ the home-entertainment experience. nevertheless, to capitalize on this, it is critical for any home-entertainment provider to unlock the potential of smart TVs by utilizing ecosystems to

further enhance this experience.

no doubt there will be some casualties on the way for entrenched brands. A major threat to the games-console category exists because, as smart TVs evolve, they may gradually remove the need for an independent gaming device within the home (in the shorter term this is likely to impact set-top box providers too).

Broadcasters and cable/satellite-service providers are also in danger of become d-coupled from the value chain as content is easily piped directly from the original source to home. However, smart TVs also provide many opportunities for broadcasters to make their content more interactive and engaging, particularly when combining their content with the more interactive elements of gaming and social networking.


The task of TV advertising is twofold: firstly, to persuade customers to buy into a product or service through the delivery of effective and relevant messages and secondly, to strengthen the consumers’ relationship with the brand which will bring about a change in viewers’ perceptions or behaviors. To achieve this, advertising must engage the viewer and cut through clutter.

Guaranteeing cut through has been at the top of advertisers’ priority lists for many years. Traditionally, the barrier to cut through was viewers leaving the room during an ad break, removing themselves from the vicinity of the TV and therefore, the ads. digital video recorders and Video on demand then became the main culprits, enabling viewers to fast forward through the ad breaks. More recently, the use of laptops, smartphones and tablet computers has exploded with viewers often using them while also watching TV (figure one). This simultaneous viewing of different

devices - known as second screening - is perceived to be the latest barrier to cut through (with Connected TV a related and rising threat). However, research has shown that the adoption of multiple screens continues to grow alongside even an increase in TV viewing figures1 , which poses the question; could the viewing of two or more screens at the same time actually be an opportunity for advertisers to exploit effectively? some advertisers

1 “A serious Examination of the Myth of TV Viewing”, T.Jones & T.Baxter, Market Leader: Quarter 1, 2010 (Warc)

advertising cut through in a multiscreen environmentbY kathrYn o’hare



74%72%

59%

51%

20%

(1) (2) (3) (4) (5)

KEY

(1) Browse the internet/check, send emails(2) Use a laptop or computer(3) Use a mobile phone/smartphone(4) Use social networking sites(5) Use a tablet computer

In the past, the type of media used in a campaign has placed time constraints on advertising, limiting the depth of message that could be communicated. However, during a second-screen campaign, time limits become less of an issue. Coca-Cola found this in their second-screen campaign during the 2012 super Bowl. Viewers were directed to an online microsite on which there were two animated polar bears hosting their own super Bowl party and reacting in real time to the game, the TV ads, and the social media updates from viewers. The average time that viewers interacted with the polar bears was

“second screening is an effective waY for all industries to advertise as it allows brands to

build a relationship with consumers through more

active engagement which can help positioning and differentiation”

think so, and while using one channel to direct consumers onto another is nothing new, advertisers are recognizing the real-time opportunity of second screening; using this to capitalize on advertising on all screens at once, creating campaigns that provide relevant, consistent and connected advertising.

What is a ‘second screen’ campaign? The idea behind a second screen campaign is simple: you place advertising on TV which drives viewers to engage with the brand on the laptop or smartphone they have in front of them. It is well known that TV is a passive medium, but when used as part of a second-screen campaign it becomes the catalyst to actively engaging viewers by directing them online. A straightforward example of this is the UK Virgin Media

broadband TV ad2 . At the end of the ad, Usain Bolt points to a website address on screen which promises to tell viewers when their broadband speeds will double. This direction resulted in over 1.7 million viewers going online after the advert had aired3, demonstrating not only how connected viewers are while watching TV, but also their willingness to engage with brands online. The driver online from the TV advert could be as simple as Virgin’s point to a website address; it could be the inclusion of a hashtag or Facebook emblem to encourage viewers to engage with the brand through social media, or it might be something more complex such as a link to a downloadable app or online game.

2 http://www.youtube.com watch?v=gpntntHVrkc 3 “Virgin Media: Going Beyond the data” Jeff dodds, Warc Exclusive MAp: Measuring Advertising perfor-mance, March 2012


Figure one: Multiscreening is popular amongst TV viewers with just under three quarters browsing the internet or checking emails while also watching TV.

BRAND A

BRAND B

APPEAL & FAVORABILITY INNOVATION

76%

45%

69% 69%

47%

13% 11% 12%

(1) (2) (3) (4)

KEY

(1) Top two box appeal(2) Top two box favorability(3) Has the newest features(4) Cutting edge technology

Figure two: strength in market usually leads to strong innovation perceptions

Key

1. Browse the internet/check, send emails

2. Use a laptop/computer

3. Use a mobile phone/smartphone

4. Use social networking sites

5. Use a tablet computer

Key

1. Top two box appeal

2. Top two box favorability

3. Has the newest features

4. Cutting edge technology


engaged audience through a second-screen campaign could strengthen the brand relationship. Viewers can engage beyond the advertising, demonstrating what they are missing out on or letting them explore the capabilities of the products they are using and exploiting the all-important innovative message through real-time use of the product.

More broadly, second screen advertising shows how advertisers should focus on a holistic ‘experience points’ strategy. The greater the ability is to create memorable, impressive and consistent experiences, the more they’ll be able to strengthen consumers’ relationships to brand.


providers and other products, many technology categories are central to second screening. Viewers are already engaged with the category at the point of advertising consumption. As such, second screening could act as a platform for showcasing the brand and products in a relevant manner without time constraints, and to an audience which is already highly involved and hence is less likely to perceive advertising as unobtrusive.

second screening is a constantly-evolving concept and the traditional task of TV advertising remains important. In a second-screen campaign, TV advertising still has to have enough impact to cut through - but once it does, the potential to engage consumers for a longer amount of time is heightened through online interaction. The manner through which technology brands can successfully exploit their integral part of the second-screen process is a question which is yet to be addressed. Although the advantages are clear, showcasing technology products to an already-

expected to be quite low, at around two and a half minutes. Instead, viewers stayed for an average of 28 minutes, Twitter followers grew by 38% and the brand ran connected product-led TV ads during the game4. Coca-Cola found that through adopting this approach, screens can be used distinctly, allowing the advertiser to get across a myriad of messages, each one enticing the viewer in a unique way and at a different level. The relevance of the content helped to encourage viewers to stay with the polar bears, engaging with the Coca-Cola brand throughout.

What are the implications and the opportunities of second screening for technology brands?second screening is an effective way for all industries to advertise as it allows brands to build a relationship with consumers through more active engagement which can help positioning and differentiation. Technology brands specifically should embrace the opportunities that a second-

4 “Coca-Cola polar Bear Engaged 9 Million”, natalie Zmuda, adage.com, May 9th, 2012

screen advertising campaign presents for two reasons. Firstly, second screening is innovative; one of the key characteristics of second screening is that it relies on using creative and cutting-edge platforms through which to communicate with viewers, keeping innovation at the core of media activities. data we have collected5 gives an indication that technology brands that are cutting edge with the newest features and capabilities tend to have higher levels of appeal and favorability (Figure two). As innovation is key to success in the technology category, keeping this quality not only at the core of products and messages but in the way the brand communicates, is likely to lead to strength in the market and a positive change in brand perception as well. secondly, technology is intrinsically involved in the second-screening experience. With the combination of TV, laptop/tablet/smartphone, broadband/Wi-Fi/mobile network carrier, social media, search

5 TechTalk omnibus conducted by GfK in the UK in Feb 2012 and the base is 6075

Want more information on this article?-> Kathyn o’Hare [email protected]


The adoption of laptops and tablet computers combined with the rise of online catch-up services (TV on demand) has meant that we can watch our favorite content wherever, whenever and as often as we please. These services allow consumers to fit programs around our lives, ensuring we never again miss our favorite drama series or that groundbreaking documentary.

However, the move to watching programs via these services has seen the disappearance of some aspects of normal viewing, most notably the traditional ‘ad break’ window between programs. To combat this, content on catch-up services contains a mechanism to screen shorter ad breaks, partly using online-specific creative executions before (pre-rolls) and throughout (mid-rolls) the viewing of program content. This online video advertising has enabled advertisers to place ads in and around specific content to regain control and potentially advertise to an already engaged audience.

So, what are the benefits of online video ads?1. Traditionally, online has been seen to be an active medium, whilst TV is perceived as a more passive medium. It follows therefore that advertising, designed to be viewed passively, would not sit well in an online environment. However, thanks to our increasing consumption of media through catch-up TV services, smart TVs, laptops and the rise in popularity of youTube, a grey area has emerged online in which TV advertising sits particularly well. Indeed, with online viewers being generally more engaged, (they click on a link, or search for content) and yet still watching programs

the rise of online video advertisingbY robert wucher



and those exposed to the latter but unexposed to online advertising, despite browsing the same website. The results showed that not only did those consuming both the TV and online video advertising have stronger recall, but brand-perception measures were also more positive in this group, post-exposure. The strongest ad recall happened with viewers who had seen the ad five to seven times through a combination of TV and online.

one such study focused on a mobile phone manufacturers’ launch campaign for a new handset. Interestingly, the brand-perception measure which benefited most from exposure to both elements

impossible to skip through online video ads. While audiences may not necessarily take note of ads, they are likely to be engaged to an extent as they actively consume the medium. one exception is on youTube which has a mechanism which lets you skip through adverts after the first five seconds. As such, the online video ad is guaranteed exposure, albeit for a shorter time.

3. online video adverts can be specifically targeted at a particular demographic or type of consumer based on the category of content in which they are placed. The programing can be cherry-picked especially to sit within a certain type of content, making it easier to target the demographic for which the advertising has been created, or those who may be interested in the product being advertised.

so, in a nutshell, online video ads save time and expense, sharing creative executions across media. But what are the effects on brands?

Beyond generating awareness, another important purpose of advertising is to shift perceptions. Working with Google, we carried out a series of studies across a number of industries to explore the value and effectiveness of online video ads in relation to TV. Both the online and TV campaigns used were identical in their creative executions. The studies divided participants into two groups: those exposed to both online and TV advertising,

was innovation. Generally, technology brands need to be perceived as innovative, and it would seem that harnessing new innovations in advertising can also help drive this perception.

It is evident that the paybacks from online video advertising make it a critical component to consider using as part of an advertising campaign. However, it is worth noting that success was only seen when the online ads were used in conjunction with TV advertising. While they offer a good opportunity to target a specific audience, using online video advertising in isolation from other media is not enough. But when used in tandem with other media, they provide a complementary, non-traditional approach through which to deliver advertising to the right people at a time when they are most likely to be engaged. In addition, they also have particular benefits for tech brands chasing that all-important innovative perception.

Want more information on this article?-> robert Wucher [email protected]

passively, TV-creative executions can easily slip into this unique advertising space. This is obviously a great benefit to advertisers as executions can be easily slotted online, removing time and money otherwise spent on creating a whole new execution. However, it is important to note that it is not yet clear if using the exact same creative execution for both online and TV is the best approach from an ad-effectiveness standpoint.

2. Both youTube and online TV catch-up services have measures in place making it

“technologY brands need to be perceived as

innovative, and it would seem that harnessing new

innovations in advertising can

help them to drive this perception”


“thanks to our increasing

consumption of media through

catch-up tv services, smart tvs,

laptops and the rise in popularitY of Youtube, a greY area has emerged online in which tv

advertising sits particularlY well”


TV is in the middle of a technology revolution which has the potential to completely change the TV-viewing culture and experience. A range of technologies is contributing to this revolution including Connected TV, HdTV, 3dTV, time-shifted viewing and the ability to watch TV programs on a number of devices. so how are consumers globally adopting these new technologies?

our global study1 into content and device-viewing habits shows that developing countries have exploited the opportunities to consume and engage with media across a variety of platforms to a greater extent than their developed-country counterparts. not only do countries such as India, Brazil and especially China view an increasing amount of content via ‘second screens’, but they also use TV in more advanced ways, in particular utilizing the smart functionality. Their rising levels of advanced TV interaction, paired with their higher motivation to interact with programs, means that consumers in China, India and Brazil are essentially the early adopters of the moment. In contrast, consumers in traditional TV markets such as the Us, the UK and

1 survey was conducted by GfK, covering 6,027 consumers in 13 markets. All participants were inter-viewed between June and July 2012 using an online methodology

Germany largely continue to see their TV set as the center of their content viewing, favoring watching TV content in the context of the traditional living room set-up.

As david Tice, of GfK north America2 , suggests, “TV is still king within the Us, and consumers in this market want the biggest screen possible so they can enjoy the ultimate TV-viewing experience.” nevertheless, how content is consumed is changing, albeit within the same living-room environment. An appetite for second screening is growing in developed markets. Tablets, laptops and smartphones are used to actively to engage and seek information related to the TV content that is being viewed.

2 Tele-depth interview conducted with GfK analyst in north America in May 2012

the emergence of a new global tv landscapebY phil mccann



breeding ground for such gesture-based interfaces, moving away from social gaming and towards visual content, such as catch-up TV and streaming movies. Meanwhile, with smartphones developing beyond the traditional boundaries of a mobile phone it is likely that this technology, having already defined its usability credentials in terms of these advanced control methods, could

be used both as an alternative to and in tandem with TV viewing in the form of a ‘second screen’.

But what does this mean for the future? It would be unwise to suggest that TV is on the brink of losing its position as the top content-viewing device. However, the growth of online catch-up and streaming services means devices such as laptops, tablets, smartphones and games consoles are far more appealing to viewers looking for content rather than a mechanism for consuming it. As a result of this technology, manufacturers and os developers could hold the key to future content delivery with viewers looking towards the most convenient and intuitive method of consuming this content across their device ecosystems.

*Infographic below: smart TV usage amongst owners of a smart TVIndeed, there is global commonality in

terms of key purchase drivers when consumers consider their next TV set. Alongside the obvious barrier of price (a critical point of consideration for TV purchases as oliver robinson explores in

‘shortcuts: Consumer decision-Making in the real World’), the highest drivers of purchase are screen format and level of Hd capability, with these factors proving far more important to consumers than whether or not their TV is internet enabled. Findings also show that globally, consumers feel uninspired by the social content of programs to interact regularly. Broadcasters must work creatively to integrate social elements, such as voting, betting and buying, into the fabric of programs to engage more consumers (as rose Tomlins explores in ‘driving Engagement through the second screen’).

so, while advanced functionality is more likely to be adopted as penetration increases, it is clear that this is not yet a base on which to build a marketing strategy.

In fact, our study suggests that intuitive control will be the next big growth area in TV, with high interest in touch and gesture TV control as a replacement to the traditional remote control. Microsoft’s Kinect technology is proving to be a

Want more information on this article?-> phil McCann [email protected]

“not onlY do countries such as

india, brazil and especiallY china

view an increasing amount of content via second screens,

but theY also use tv in more

advanced waYs, in particular

utilizing the smart functionalitY”

“our studY suggests that intuitive

control will be the next big growth area in tv, with high interest in

touch and gesture tv control as a

replacement to the traditional remote

control”

*


The mobile app market is booming and is now a key part of the mobile ecosystem. We talked to mobile apps developer, nick Clarey to get an industry perspective on where this fast paced market is heading. nick discussed his view on the market and how there is growing demand for simple, focused apps that encourage fun, creativity and sharing.

Evolution of the app storeIt’s easy to take the incredible quantity and variety of apps available to consumers today for granted, but rewind back a few years and the picture was very different. “Airsource was set up before any of the app stores were really available,” Clarey explains, “there were a lot of challenges trying to figure out how you would get your apps in front of consumers. you would have to build an app, then convince an operator to list that app on their portal and they would basically be in control of whether a user would see it or not. And only at the end of that lengthy process would a user actually decide whether an app was worth downloading.”

However, the launch of Apple’s App store in 2008 changed the situation drastically. “I think Apple really set a standard for what’s possible,” he continues, “smartphones existed before the iphone came out, but there wasn’t a good app-store environment. Apple brought together a lot of different factors in an ecosystem that gave developers a way to put apps in front of the consumer in a very short space of time, and not just in one country or through one operator, but globally - I think that’s been critical, and obviously others have followed similar paths.”

app design and the shift towards fun and creativitY

interview with airsource’s nick clareY. words bY nicholas peppiatt.

the tv edition 30



It’s also clear that a global market offers a huge number of possibilities meaning that, alongside focused functionality, apps can also be designed for very specific audiences. “They may not be as outrageously successful as Twitter and Instagram have been,” he continues, “however, there are still significant size niches available and I think there are a lot of quality gaps on the app stores for developers to address. We see problems in all kinds of areas, whether it’s in the exercise market, lifestyle apps or cooking apps, there are still plenty of gaps which

are available for developers. Apps that do a good job at performing a utility function are also very important.”

Spreading the wordUndoubtedly, social networking has an extremely important role to play in app functionality, allowing users to share the fun. “It’s been a big game changer the last couple of years”, Clarey says, “our users complain if there’s no way that they can put stuff on Twitter and Facebook, and the platform vendors all have integrated services so when you develop an app there are now easy ways built into the os to integrate with social networking sites; Apple recently announced that Facebook is going be one of their ApIs [in ios 6].”social networking sites can also benefit from a focused and innovative approach, and Clarey sees fragmentation as something to be embraced rather than avoided. In effect, the success of sites such as pinterest suggests that there is huge possibility for coexisting networks that cater for specific interests, creating niche communities that are much more intimate and gratifying to the end user. Clarey says, “I think we may see two extremes here, one a focus on general sharing such as Twitter that’s totally public, and then something that’s very private and intimate like path, more one-to-one social networking.”

trying to achieve very clear in your mind as the developer, that way it comes across clearly to the consumer.”

More than anything, Clarey is keen to see app developers embrace the many advantages that smartphones offer. “people tend to buy apps which make good use of the hardware they have. They spend a lot of money on these devices and they want to see that those facilities are being used. so, it’s got to make good use of the screen space, location services and the networking facilities.”

Getting creativeAt the heart of many recent app-store successes are the themes of fun and creativity. “[photo filtering app] Instagram is a simple app and simple concept well delivered”, he explains, “a great example of something which does one thing and does it exceptionally well - I think those are the future.”

Clarey also believes that user creativity plays a crucial role in the success of such apps, and this sheds some light on the motivations behind Facebook’s buyout of Instagram. “I think creative apps are very important, particularly when you require users to generate content. Instagram has been very successful in getting users to produce content that other people can then consume, so for the developer it’s a great model because your users are basically doing all the work.”

Power shift The success of these app stores has also placed a lot of power in the hands of consumers. As Clarey points out, “we can now put an app in front of a consumer and they can decide right then and there whether it’s worth spending money on, and the operator has absolutely no say in that. That’s much better for me and it’s much better for the consumer.” nonetheless, this shift has its challenges. demand for free content and updates is high, and app developers have to think carefully about their business model. “obviously, free is very attractive because you get plenty of users,” he admits, “the problem is those users might just want something for nothing, and over the long-term this degrades the market somewhat. you’ve got to find some way of turning a profit from people downloading your app, whether that’s paying for it upfront, in-app purchases or some other model such as advertising. For us, it’s setting a premium price and building a quality app; that’s the model we’ve chosen and so far it seems to be working reasonably well.”

The drawing boardso what are the priorities when developing an app? For Clarey, focus is key. “design quality is so important to an app,” he says, “if you choose one function or one area of functionality, it’s easier to get the design right than if you try and do too much. you need to keep your concept and what you’re

“instagram has been verY successful in getting users to produce content

that other people can then consume, so for the developer

it’s a great model because Your users are basicallY doing

all the work”



Want more information on this article?-> nicholas peppiatt [email protected]

Final thoughtsso what is excellence in app development? In Clarey’s view, “the thing that defines a great app is that it’s got to be very well designed. A lot of thought has got to go into it, from what appears on the store to the user experience. How the user interacts with the application, how the application looks, how it works, the reliability of it; all these things are factors in determining whether or not an app is great.”

“And it’s not just one of those things has to be right - you’ve got to get them all right, which is a very high standard and I think apps which concentrate on those things will end up winning. The great thing about social networking and the communication we have now is that quality apps will shine through in the end and I think that’s an empowering thing for the developer and great for the consumer.”

Aboutnick Clarey is CEo and director of Airsource, an app development company based in Cambridge, UK. Before joining Airsource, he worked for Qualcomm and Motorola Australia. Airsource apps include Cellar, optiscan and Barista, available for iphone.

What is the potential impact of smart TVs… from the perspective of an app developer?

The key opportunity for the app developer lies in capitalizing on the increased interaction between broadcast or stored content on the

TV and linked/supporting content on a secondary device (be it a tablet or smartphone).

Applications can help link that content so that anything being watched on TV (the first screen) can either be researched or have an interactive element through a supporting application, thereby enriching the experience.

However, as tech markets increasingly converge, we are likely to see the living room and bedroom become crowded battle grounds for brands as they compete to ‘own’ the TV experience. This threatens to somewhat fragment the experience for consumers and app developers will therefore need to ensure compatibility with multiple device and software ecosystems. of course, the most successful developers will be ones that look for ways to

provide a cohesive and seamless experience to the consumer whatever disruptive effect smart TVs may have in the short-term.

on the whole, the evolution to smart TVs should present new opportunities to monetize applications as it has always been a struggle for developers to make money incrementally from an app. The expectation amongst consumers being that, once they have bought the app, upgrades come ’free for life’. of course, this means that at some point it becomes unviable for the developer to service the app and it eventually falls into disrepair. As such, app developers will be looking to partner with the more ’open’ ecosystem offerings that allow the flexibility needed to mitigate these current shortcomings, and ultimately make the TV/app experience more rewarding and fairer for the consumer.

The digitization of media content distributed across the internet has opened up new opportunities for independent (indie) media producers. There are fine examples of indie producers pushing the creative boundaries of music and games production. The advent of smart TVs could be the catalyst that opens the door for more indie film and TV makers to have a similar impact.

The internet has had two major transformative effects on the media and entertainment industry. Firstly, it has leveled the playing field in respect of the distribution and access of content. secondly, it has severely disrupted the established business model that media companies have relied on to generate revenue. While the internet as a medium is the disruptive factor, the development of new platforms designed for digital consumption has accelerated the digital shift in consumer behavior. The ipod has enabled widespread consumption of digital music and the Kindle has had a similar

effect on the take-up of digital books. The introduction of smart TVs will bring the internet’s voluminous video content to the living room ready to be consumed on demand. In the digital age, the consumer retains control over what, when and how they consume media content which is having positive effects on the diversity and creativity of the production of indie content.

All the way back in 2000, Levine et al. described the internet as a way to, “enable new micromarkets to coalesce around shared areas of interest, thus overturning

whY a successful indie media industrY is good for the consumerbY rYan garner

the tv edition 36


professional indie scene, there is a long tail of self-published artists using free services such as Myspace, soundCloud and Amazon to promote and distribute their work.

Indie developers are also having a significant impact on the gaming industry. Earlier this year, ‘Journey’ - a game developed by a small independent called ‘thatgamecompany’ - was released on the playstation. While sony funded the development of the game, the creativity and ideas were generated by a new generation of games developers looking to evolve the medium into a more challenging and emotional experience. In an interview with the Guardian, stephanie Beth, creator of a documentary film about indie gaming, said, “The interface between art and technology is becoming more sophisticated now and that means people are not as impressed with advanced technology for technology’s sake” 3

The focus for indie games developers is the strength of concept and level of creativity at the heart of the game, rather than advanced technology. The cost of production for the best-selling games titles is soaring, and can be as high as Us$50 million dollars. With investment costs so high, games publishers cannot afford to

3 The Guardian Website

many fundamental assumptions of conventional marketing”1. Fast forward 12 years and this assertion has been realized through the rise of the social internet - the zeitgeist of the digital age. It has been built by humans for humans to express themselves, to escape from the mundane and to engage with like-minded people.

1 The Cluetrain Manifesto (2000), Levine, Locke, searls and Weinberger, Us: Basic Books

Twitter is the clearest example of this - an open network where conversations are organized by hashtags and free for anyone to join. In the music world, Last.fm has broken down the formulaic boundaries of categorizing music into genres; instead, organizing the music world around user-generated tags, a far more creative way to aid music discovery.

This new digital landscape has created opportunities for the production of independent content. Indie music has been commonplace since the punk era in the 1970s. This d.I.y. approach to music production and distribution is now flourishing more than ever in the digital era. In 2011, ‘Arcade Fire’ won the ‘best album’ GrAMMy which meant that, for an unprecedented third straight year, an independent artist had won that prestigious award. outside of music, independent authors such as Kerry Wilkinson have had phenomenal success using Amazon Kindle’s self-publishing tool. In Q4 2011, Wilkinson claimed top spot in the Kindle bestsellers list2 . Even below this

2 The Bookseller website

“independent developers see

their role as injecting fresh new ideas into a market

that onlY caters for a mainstream

audience.”

“indie developers are also having a significant impact

on the gaming industrY. earlier

this Year, ‘journeY’ - a game developed

bY a small independent called ‘thatgamecompanY’ - was released on

the plaYstation.


The role of indie media content is hugely important. As we have witnessed in the music and gaming industries, indie content is critically acclaimed and produces fresh and creative ideas that challenge the established order of the mainstream. This trend is increasingly evident in the TV industry and is likely to further flourish in the coming years as viewers recognize the benefits of on-demand content via smart TVs over the limitations of a rigid broadcast schedule. As a result, indie content will gain greater exposure, potentially attracting investment

from bigger media companies like sony and thatgamecompany. With the investment in new creative indie content, advanced technology and production values do not necessarily have to be devoid of well-developed concepts and fresh original thinking.

fail. To safeguard their investment, they are extending the life of popular titles by creating sequels and building a brand that helps drive awareness and loyalty with gamers. Independent developers see their role as injecting fresh new ideas into a market that only caters for a mainstream

audience. ‘Journey’ was a small-budget investment by sony and other publishers are hurriedly scouting around to find the next big thing.

Unlike the well-established indie music industry and the burgeoning indie games scene, indie TV is practically non-existent. The last 10 years have been turbulent times for the TV industry. As a medium, its influence has diminished with content served up on the internet via laptops, tablets and mobiles having captured an increasing share of consumers’ time. Consequently, it is now sharing the advertising revenue with internet-based media companies and has less money to invest in its programing. Much like the larger games publishers, content is created by larger production companies with big budgets such as HBo. According to richard Linklater4, an indie filmmaker, it has become a lot harder for independent production

4 The Indiewire website

companies to pitch ideas as big media companies look to play it safe. However, digital-first companies such as Hulu are taking the opportunity to invest in low-budget independent productions, such as Linklater’s ‘Up to speed’. Hulu aims to become a place for original content as well as back catalogue, and indie productions are the primary source for this refocus.

Hulu, netflix and LoVEFiLM have a strong digital presence across multiple devices, including TV. With good original programming they could challenge the dominance of traditional media broadcasters. The advent of smart TVs will provide a platform (similar to the ipod and Kindle) that could popularize their

content, both mainstream and indie. yet the challenge will be in persuading people who will enjoy such original content to actually watch it, without the marketing spend of the big players.

Want more information on this article?-> ryan Garner [email protected]

“the tv industrY is now sharing

the advertising revenue with

internet-based media companies

and has less moneY to invest in its

programing”“hulu, netflix and

lovefilm have a strong digital

presence across multiple devices, including tv. with

good original programming theY could challenge the dominance of traditional media

broadcasters”

The impact of ‘smart TV’ from the broadcaster’s perspective

Content provision was traditionally a linear process, with both scheduling and creation in the hands of the provider. Today, audiences have greater control over their viewing experiences, and developments such as broadband internet and smart mobile devices are helping audiences to personalize and share content. smart TV is the latest offering, providing a platform that, not only brings content together, but also challenges the way that people experience it.

These developments present a double-edged sword to broadcasters. on the one hand, they have much less control and exclusivity over content as they’re pushed from the value chain and battle to cater for an increasingly fragmented audience. yet on the other hand, a wealth of opportunity exists to repackage and sell content, making it more interactive and forming partnerships to improve cross-platform provision.

so, how do broadcasters ensure that they are not left behind and how do they monetize the new opportunities that smart TVs present?

Firstly, smart TVs themselves will be ‘connected’ not only to the Cloud, but to other devices too. Their introduction into these ecosystems means that forming partnerships with cross-platform software companies and device manufacturers is critical. no doubt there will be competition as different ecosystem offerings battle to ‘own’ the consumer wallet. Broadcasters will need to choose between providing multi-format

offerings or backing the strongest offering with exclusive content.

secondly, smart TVs will have more advanced processing capabilities, not only to produce hyperreal 3d and Hd experiences but, with extra processing power and new ways to make content more interactive. These present further opportunities to provide a Freemium model of provision, with basic content charged at lower rates or for free, and increasing rates for premium, add-on and cross-platform services.

Finally, the interactive and real time capabilities of smart TVs (coupled with the second screen) allow broadcasters to improve their offering for ‘real-TV’ content, making voting, betting, shopping, and advertising a more immersive and smooth experience for audiences.

These developments and the ongoing ‘smartening’ of how content is used means that providers must move quickly, yet strategically, to ensure they can adapt to this new TV era.


you might have seen the latest TV sets that can be operated by the wave of a hand, or maybe you’ve tried a few voice requests on your smartphone. These are some of the newest incarnations of natural user interfaces (nUIs). That is, a way of talking to our technology that is more natural: using our own voice, gestures, movements, situational context, body-states and more.

Why natural user interfaces?one of the early intentions behind natural user interfaces was to make technology less intrusive. By harnessing natural ways of telling our technology what we need, rather than pressing buttons and puzzling over menus, the hope is that using technology will require less effort. And eventually, our technology will start to do its job in the background, with little or no input from the user.

natural user interfaces can also make experiences of technology far more compelling. If the input method is easy, involving and natural, experiences like gaming and education can become more immersive and enjoyable. Imagine being able to conduct a virtual orchestra with your arms, bringing out the individual parts with a gesture and swelling the volume with a swoop of the arm.

The ability of natural user interfaces to bring technology to people who may be excluded by the current limitations of graphical user interfaces is also a noteworthy benefit. The obvious examples

are the elderly and the disabled, (who may struggle with buttons). Beyond this, natural user interfaces can also open up areas previously available only to people with technical training. A new project that illustrates this is being run by a stanford University group1 . They have developed a program called dryad to allow the user to design an infinite variety of trees for a virtual world. The interface allows users to zoom in and around a large selection of trees in the style of Google Earth, changing the designed tree to be more like those which the user moves towards. The designer can do his or her work, with no need to learn complex scripting or advanced computer-aided design (CAd) packages. This type of interface could potentially transform design work.

Limitations While the possibilities of natural user interfaces can be exciting, it’s not all good news. Many of these interfaces still require the user to learn how to input their commands. Gestures are particularly problematic as there is no common,

1 http://dryad.stanford.edu/

natural user interfaces are here to staYbY colin strong



the user looks away or open a link when it is looked at.

In addition, our technology can increasingly make decisions about when to interrupt us by interpreting our location and context. For example, if a user is reading a book on the sofa, the smartphone might decide to turn the TV volume down, or if the user is in a library, the phone won’t ring.

As speech recognition becomes more reliable, applications that log and record our conversations will be able to make increasingly-sophisticated decisions and suggestions about what we might want. This could involve suggesting music or reading material based on our conversations or even suggesting an action list at work based on a meeting we’ve just had.

Natural user interfaces in gamingThe gaming world is keen to embrace the enhanced and more immersive experience offered by natural user interfaces. Microsoft’s Kinect and nintendo’s Wii are the key players in this area. The Kinect technology uses a depth sensor to locate the user and to work out where their body

parts are. once it has located the basic skeleton, it can interpret commands based on movement. This means that a user can ski down a virtual mountain or hit a virtual tennis ball without ever touching a button.

Another natural interface possibility for games centers on brain control. A key player in this area is Emotiv systems2 , a neuroengineering company that has developed a headset with electrodes. The headset collects data about facial expressions and can read some basic emotions. It can also detect the mental ‘signature’ of simple actions like ‘raise’, ‘lower’, ‘push’ and ‘rotate’.

While the possibilities of such technologies are exciting, they still seem to be at an early stage. The future is likely to hold much more sophisticated and immersive experiences.

ConclusionsIt seems evident that no technology player can be complacent about what natural user interfaces might mean for their own product and competitive position. As vendors create ever more intelligent, intuitive and compelling experiences, those that really excel at creating natural user interfaces are likely to rise to the top.

2 http://www.emotiv.com/

“our technologY can increasinglY

make decisions about when to interrupt us bY

interpreting our location and

context”

intuitive way of communicating basic commands with hands. detractors would argue that anything that has to be learned isn’t natural or easy. Voice interfaces, although already impressive, can easily misinterpret a key word, rendering the task impossible to complete. The technology to clarify and modify requests is still not reliable enough to completely replace other interfaces.

There is also the issue of control for detailed tasks. Many of the interfaces that use sensors can only detect large movements, making fine work - or even ordinary office computing - difficult without the aid of some other input device, such as a glove.

Key developments in natural user interfacesThe major tech players have been busy trying to make the tantalizing dream of sci-fi, Matrix-inspired interfaces a reality for us in our everyday lives. Touch and voice interfaces are becoming increasingly sophisticated and are inching closer to realizing Hollywood dreams. The intuitive touch interface showcased in Microsoft’s ‘nUIverse’ program is close to the silver-screen ideal. This program uses different touches to move around and drill down into a wealth of information about the planetary system.

perhaps one of the most interesting natural user interface developments in smartphones is in the area of ambient technology. Think of this as the smartphone logging or sensing what the user is up to, and making decisions or suggestions as to what they might need. The interface becomes invisible because there is no need to make requests; all the inputs are gathered from the user’s context. For example, in attempting to predict a user’s next move when a call is missed, ‘calling back’ becomes an automatic action that occurs when raising the phone to one’s ear. At a more sophisticated level, a smartphone can offer options based on the user location and context. For example, the user walks onto a train and the phone offers a few relevant choices of entertainment (the music that the user likes, or a book by a favorite author). The user steps off the train and already the mapping/navigation software is to hand.

some advances are also making the devices easier to read by tracking and understanding eye movements. Future versions may be able to detect the need to scroll down and will do so automatically. They could also turn on power save when

“natural user interfaces can

make experiences of technologY far more compelling. if the input method is easY, involving

and natural, experiences

like gaming and education can become more

immersive and enjoYable.


Want more information on this article?-> Colin strong [email protected]


Buying a TV set was my first significant purchase decision as an adult. I went straight for the biggest one I could afford; an ex-rental set which took two people to lift and was branded with a mysterious and unpronounceable name. A few weeks later, the TV set broke down. The lesson was a simple one: you get what you pay for - and every purchase decision has been more complicated since.

Weighing up every element of a TV set purchase would have been tricky enough back then, but in the intervening years the complexity of choice has spiraled. Beyond traditional purchase considerations such as price, screen size and brand, consumers are now faced with an array of acronyms (Hd, LCd, 3d) and indecipherable technical specifications (refresh rate, response time, pixel resolution). How do they cope with all this information, and how do they ultimately make their decision?

Think fast, think frugallyTraditional views of human behavior (and, consequently, market research methodologies) have assumed that when presented with complex decisions like these, we’re capable of making rational and thoughtful choices. However, recent thinking amongst behavioral economists suggests that there may be other forces at play.

The reality of consumer-purchase decisions is often one of partial information (or

more likely, excess information and partial comprehension) and limited time. Under these circumstances, where a leisurely evaluation of all contributory factors isn’t an option, our brains require more simple coping mechanisms.

Fast and frugal heuristics describes one such mechanism offering a more plausible reality, whereby we utilize simple rules to make decisions in an effective way. In essence, it suggests that when faced with complicated, multifaceted choices we (often unconsciously) resort to much more limited (and occasionally singular) information to make our decision.

For example, one study1 in the area analyzes bail decisions made by magistrates (court officials in the UK) in the English justice system. despite the inherent importance of these decisions, by their nature they’re often time-pressured

1 dhami, M.K., & Ayton, p (2001) Bailing and jailing the fast and frugal way, Journal of Behavioural decision Making, 14, 141-168

shortcuts: consumer decision making in the real worldbY oliver robinson



and based on incomplete or complex information. The study found that under these circumstances, verdicts could often be traced to a single factor. While this determining factor varied from magistrate to magistrate, the correlation between it and their decisions was consistent across all of their cases.

What does this mean for consumer decision-making? To find out, we applied the fast and frugal model to consumer

behavior in the area of TV set purchase 2. In short, by presenting respondents with a range of TV sets of varying price, brand and specification, we were able to mirror the individual-level analysis used in the magistrates’ study to establish whether each respondent had similar determining factors; single cues that drove their decisions.

Money makes the world go aroundIn 2006, the global average consumer spend on a TV set was €448. At that time around 185 million TV sets were sold around the world with only 30% of those TVs being the ‘flat screen’ variety with the majority of the remaining 70% having big and heavy tube boxes with screen sizes no

2 GfK study conducted with 1,500 adults in the UK between March- April 2012

tell us about the importance of premium brands; it currently has little bearing on their decision to consider purchasing a TV set.

Having said that, it seems that TV is likely to be the next category absorbed by the growth of branded product and service ecosystems (rather than the essentially stand-alone TV sets in most of our living rooms at the moment). It will therefore be interesting to monitor any growth in the necessity of purchasing certain brands; that is, those that will integrate best with consumers’ other mobile devices.

So what does the future hold?In general, price tends to emerge as a key driver of choice in categories where there’s little differentiation across the competitive set. Essentially, cost becomes the most tangible element for comparison where product-level features are either commoditized (i.e. uniform across the category) or unimportant (i.e. their benefits aren’t being effectively communicated). The latter tends to be a particular problem in categories where consumers are confronted with technical features or functionality rather than experiences or solutions to problems.

This could certainly be contributing to price being the key determining factor in TV set purchase, with technical innovations rarely packaged in a way that resonates with the general public. Essentially, there is currently little on offer to drastically shift perceptions of value, leaving a struggle to upsell the latest technology to consumers who have a strict budget.

The conclusion should be clear: in order to differentiate in an increasingly uniform and crowded television marketplace, communications with potential customers need to focus on something more palpable than technical specifications. The advent of internet-enabled TV offers a great opportunity to shift messaging back to the experiences and benefits that television facilitates.

More worryingly for those same manufacturers, the current focus on sustaining innovations (and a sense that these technical improvements are increasingly beyond the needs or interests of the mass market) suggests that the category may be ripe for disruption. This could mean a product that competes asymmetrically with these sustaining technical innovations, redefining the user experience along a different dimension. In one sense, the market is more competitive than it’s ever been, but in another it might just be there for the taking.

“price tends to emerge as a keY

driver of choice in categories where

there’s little differentiation

across the competitive set”

larger than 80cm. 3d TV did not exist then, and connecting TV to the internet had also not yet been realized.

since then, consumer demand in TV purchase has increased with 253 million units being sold per annum (an increase of 37%). Today, 95% of TV sets purchased are flat-screen TVs with screen sizes up to 150cm or even more. Close to 20% of today’s worldwide sales of TV sets are 3d TVs with approximately 30% able to get content from the internet3. It should also be noted that, while the average spend today is on the same level as in 2006 (€447), consumers are getting larger screen sizes, more features and much better picture quality for their money.

As with the magistrates’ study, different consumers display different determining factors in their decision-making; in the area of TV set purchase, at the moment price is king. This emerges as a critical factor 524 times among 978 respondents. This is a long way ahead of the screen-size factor which is in second place (mentioned 124 times).

This shouldn’t come as a huge surprise; few of us are fortunate enough to enter into significant purchase decisions without price as a barrier. Instead, it is likely that this initial analysis is illustrating a process of shortlisting - the elimination of all the unfeasible options from a crowded marketplace - in order to assess the remaining options in greater detail.

More interestingly and crucially for manufacturers in the space, brand (with 69 mentions) rates no higher than the plethora of technical specifications. According to this UK-based study, whatever consumers may

3 Global TV demand projector June 2012/ GfK Bou-tique. Based on retail panel Audit of GfK retail and Technology in more than 90 countries.In cooperation with CEA in Us and Canada

“the advent of internet-enabled tv offers a great

opportunitY to shift messaging

back to the experiences and benefits

that television facilitates”


Want more information on this article?-> oliver robonson [email protected]

The smartphone is no longer a device seemingly reserved for the Western consumer. Its worldwide proliferation has happened simultaneously with an increased complexity in the purchase process of these devices. As such, a number of our colleagues in several key emerging markets have been working together to further understand the local smartphone experience and the challenges of shopping for smartphones, particularly in rural areas.

Through a process of qualitative shopper diaries and expert interviews, we have compiled five key trends that emerged from the results.

The demand for authenticitysmartphone purchasers set great store by owning an authentic, branded smartphone. Through our research we observed rising levels of frustration with the abundance of replica handsets that smartphone purchasers in emerging countries encountered. They want the real thing from a trusted retailer. A key pain point is the difficulty in differentiating between a fake and a real device at the point of sale. With no guaranteed way of determining this, smartphone shoppers are keenly anticipating the arrival of legitimate (or what can be described as ‘official’) purchase

channels where they can rest assured that the handsets on offer are the genuine articles.

The increased desire for onlineshopping on the internet raises a variety of concerns including product authenticity, reliability of the service, and delivery restrictions to rural areas. despite this, shopping online is increasing because of the convenience, or the perception that products are often cheaper using this channel. In the next few years, it is possible that online shopping in emerging markets will follow a similar pattern to that of more developed markets; that is, trying before you buy in store but making the final purchase through official online sites to save money. This desire for online shopping means that there is an opportunity for manufacturer websites to offer smartphone

smartphone experiencesin emerging marketsbY leanna applebY & emma roberts

the tv edition 50

emerging markets is increasingly savvy and demanding. They are impatiently waiting for the retail infrastructure to catch up with their growing desire to explore and consider a wider range of handset brands. With the potential to leapfrog existing infrastructure barriers, the smartphone is set to play an even more central role in consumers’ communication ecosystems than in Western countries, and existing brand loyalties may be set aside as the need for a richer set of experiences grows.

With thanks to:ulia Liu, Willis Huang, Frank Landeck,

Ashish shrestha, Mohamed Bakr, Hossam Qader, yildiz Turan, Elif pars, parviz, dirk Moersdorf, Jean Moolman, Leonardo Melo, Cynthia Vieira, stephane Tchies, Molemo Moahloli, namrata priyadarshini, neetu sehgal and rusudan nadiradze

Markets explored:nepal, Turkey, south Africa, China, Brazil, Egypt, Ghana, India, Tajikistan and Georgia

shoppers products through their branded websites, while simultaneously reassuring purchasers that they will receive a reliable service, guaranteed delivery and an authentic product.

The end of forced brand loyaltyThere is a common misconception that consumers in emerging markets are fiercely brand loyal. Instead, they are carefully watching as the competitive landscape evolves and the choice of brands available to them grows rapidly. What has limited their brand consideration to date has been the challenge of actually getting their hands on a wide range of brands and models to test and evaluate in store.

With global A-brand mobile phone manufacturers penetrating emerging markets and opening the supply chain, more consumers will be able to actively choose the brand that suits them, not just the brand available to them. Thus, the

days of fierce brand loyalty may well be numbered. smartphone brands will have to work harder to retain their customer base in emerging markets. Improving the retail experience will be critical to ensuring satisfaction and loyalty across the entire consumer journey. The rise of the discerning techyowning a smartphone in emerging markets is often aspirational and linked to status. However, as the market matures we are beginning to see the rise of the ‘smartphone replacer’. Before long, smartphone consumers in emerging markets will no longer only consist of first-time owners, but will develop into second- and third-generation smartphone owners. These smartphone replacers are recognizing the broader benefits that these devices can bring above and beyond being a status symbol. As such, brands will have to prove to consumers that they are not just offering them a product that will make them look ‘cool’, but that can seamlessly integrate with their lives, fulfilling an increasingly diverse set of needs.

Leapfrogging poor infrastructureCurrently, the infrastructure for home broadband and fixed landlines is poor for consumers in emerging markets, especially for those in rural areas. As the cost of mobile data starts to decrease, consumers are realizing that their needs for home broadband or a fixed landline can be addressed through a smartphone, whether that is making a phone call, sending an sMs, browsing the internet or checking emails. over the next few years, as smartphone ownership augments, brands will be able to tap into the consumer desire to be ‘connected’ without having to rely on - or pay for - broadband infrastructure or additional hardware.

Final thoughtsWith greater appreciation of the wider benefits of smartphones beyond a mere status symbol, the smartphone shopper in

“there is a common misconception

that consumers in emerging markets are fiercelY brand

loYal. instead, theY are carefullY

watching as the competitive

landscape evolves and the choice of brands available

to them grows rapidlY.”


Want more information on this article?-> Leanna Appleby [email protected]

What is the potential impact of smart TVs from the perspective of a mobile device manufacturer?

As mobile device screens have grown in size, facilitating the provision of richer experiences to consumers, it was inevitable that the largest screens of all would join the party. And so, with the addition of the ubiquitous ‘smart‘ prefix, internet connectivity and various other innovations, the TV set has now morphed into an oversized smartphone in the corner of the living room.

The problem for some people is that smart TVs aren’t particularly, well, smart. Compared to other smart devices, many connected TVs offer a relatively clunky experience in functionality, apps and usability.

However, as they improve as products, one of the keys that will make TVs truly ‘smart’ is their integration with mobile devices. Indeed, in many ways device manufacturers will continue to hold the upper hand, with some of the most exciting developments in TV (and associated media) based on the possibilities that ‘second screen’ technologies offer.

Multi-screening entertainment, with the smartphone and tablet as the companion device, will build a truly connected and complementary ‘social’ TV experience, sharing interactive services in a manner that doesn’t intrude upon a living room’s collective viewing experience and offering myriad possibilities to consumers, advertisers and broadcasters.

Even without a proprietary system in place for any device manufacturer, striking up the right partnerships with content providers and developers should be able to create such links. However, there is another important consideration underlying all of this. As TVs became smart, they effectively became the missing link in the oft-discussed digital ecosystem; a concept likely to grow in importance to the extent that new device purchase decisions will be influenced by their ability to seamlessly integrate with existing devices, services and content in a virtuous circle.

The TV is undoubtedly going to become one, if not the, central component of that ecosystem. The danger is that device manufacturers who do not offer a TV proposition, a strong media marketplace, or at least an os platform directly compatible with other ecosystem devices, may effectively find themselves sidelined within a couple of years.

Copyright GfK | TechTalk Edition Two 2012

53 the retail edition

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