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NextGen TV: What ATSC 3.0 television means for marketers

  • Gordon Kumpuris

    Gordon Kumpuris

    Senior Content Developer

Created at June 6th, 2022

NextGen TV: What ATSC 3.0 television means for marketers

Way back in the day, broadcast television advertising and associated ad rates were not that complex but were more a bit of a blunt object.  Brands paid for advertising based mainly on the estimated number of viewers.  I cut my teeth working in television during these “golden years” of over-the-air (OTA) broadcasting when the size of that broadcast footprint was almost everything.

Stations constantly bragged about the size of their coverage area and the size of the markets within.  Broadcast TV lost much of its golden luster in the early ’80s when cable TV really took off.  Dozens of niche channels “piped” into homes delivered niche audiences, naturally segmented by interest and geography.  The reach may have been smaller in some cases, but the customer acquisition cost (CAC) for brands was often much lower.  Suddenly, a business could televise ads to those more likely to become customers without paying for the countless who would not. This model was similar to radio, where format, demographics, and market size were the name of the game.

Trends over the following decades continued to erode over-the-air TV (and radio) advertising.  Since the mid-2000s, we’ve watched as the number of video on demand (VOD) digital TV options blew up. The marketing terms “addressability” and “audiences” began to drive the industry.  Data insights allowed marketers to get granular and reach people who were likely to become or remain customers and people who were likely to want particular products and services.  Over-the-air TV and its traditional ad model appeared to be on life support.  But was it?  

Something dramatic happened in about 2009 that paved the way for a potential revival. Digital transmission became the global standard for over-the-air television.  Suddenly analog signals were out, and TV signals were encoded in binary code (1’s and 0’s). As a result, improved picture and audio quality, less interference, and the ability for a broadcaster to offer sub-channels or broadcast data became possible.  In my hometown, Little Rock, Arkansas, there are dozens of over-the-air, free television digital “channels.” I put the word channels in quotation marks because they are more accurately channels broken into subsets. Both viewers and advertisers often ignore these over-the-air advancements because TV retransmitted via cable, satellite, and eventually over the internet offered that and more.  Today viewers have countless content options, many of them on demand.  Advertisers now have the ability to slice and dice ads granularly and deliver them to the viewers most likely to respond.

But ATSC 3.0, a new technical framework for free, over the air TV, commonly called NextGen TV, looks to revive the over-the-air model.  ATSC 3.0 offers 4K video resolutions and other significant picture and sound quality upgrades along with even less interference.

But what’s genuinely game-changing is that ATSC 3.0 leverages the same underlying protocols as the internet, opening an entirely new world for broadcast content and interactivity.  ATSC 3.0 allows a person to watch digital broadcast video on enabled mobile devices and in enabled cars without Wi-Fi or cellular coverage.  Let me repeat that.  No Wi-Fi, no cell signal, but yes to live, free TV, even on a mobile device.  Think of what this could mean for in-car video combined with the geotargeting capabilities ATSC 3.0 also delivers.

Geotargeting content allows for such things as targeted emergency alerts such as very highly focused tornado or flash flood warnings.  But of particular attention for marketers is the ability to work hand in hand with existing internet service to provide highly targeted and seamless interactive overlay ads during over-the-air broadcasts.  This hybrid TV model allows local over-the-air stations to finally boast the ability to narrowcast marketing and provide audience measurement not seen in over-the-air TV.  These capabilities give over-the-air broadcasters full entry into the digital ecosystem, allowing them to better compete with niche cable TV and VOD, and the various types of digital advertising.  This ability also puts them in a better competitive position when negotiating retransmission relationships with cable, satellite and VOD entities.

There are hurdles before the public and brands truly tune into ATSC 3.0 TV.  Perhaps most apparent is that ATSC 3.0 requires a tuner or a TV with a built-in tuner to display ATSC 3.0 TV. In addition, broadcasters must upgrade transmission technology, but many already have.  In the U.S., about ½ of TV stations are broadcasting in 3.0.  Other outstanding issues include how granular the notice and consent framework for data collection must be and how rapidly mobile and TV manufacturers will adopt ATSC 3.0 chips.  

One thing that seems clear is that these game-changing advancements in over-the-air broadcasting do nothing but expand the possibilities and increase the demand for audience-based digital marketing.  To learn more and better position your company to ride this wave of constant change, reach out to info@acxiom.com.