The Federal Communications Commission (FCC) just did something that will change the business model of every local broadcast television station in the country and make advertising on those stations much more attractive to brands.

If you work in marketing, you’re aware of the challenges that broadcast television has faced, as ratings steadily have declined over the past decade. The average adult 18-49 rating delivered by the four major broadcast networks has decreased 41% over the last 10 years. And viewing is increasingly going online, particularly to mobile devices. It’s all led to the declining viability of local broadcast television as an advertising medium.

So, what did the FCC do?

You probably know a future-minded media person who has said that eventually all media will be digital. Recently, the FCC took a big step toward ensuring that happens by approving plans for the launch of next-generation TV broadcasting (or Advanced Television Systems Committee Version 3). The big news for broadcasters is that this looks like the “silver bullet” that will take them from becoming dinosaurs in a digital world to being the Next Big Thing. The big news for advertisers is that it won’t be long before broadcast TV offers you all the things you’ve come to love about digital advertising.

What’s ATSC 3.0?

The FCC sets the standard by which broadcast television signals are transmitted in the U.S. The original standard was analog (NTSC), but switched to digital (ATSC) in 2009. You might remember at the time you either needed to buy a digital television or get a special converter box (which the federal government subsidized). The ATSC 3.0 essentially merges broadcast television and the internet in order to enable three big changes: mobility, addressability, and quality.

Mobility:

The current digital broadcast standard was designed for “fixed” TV reception (as in, you’re sitting in your living room watching your big-screen TV). Broadcasters finally will be able to serve the growing population that watches programming on mobile devices like smartphones and tablets. Attracting mobile viewers is imperative to the survival of the broadcast business model, which has been slowly cut off at the knees by decreased ratings. The benefit to viewers is that they can access local programming, such as news, from anywhere.

Addressability:

The current system is a one-way street. Television stations broadcast their signal to everyone with no information about actual viewing coming back. ATSC 3.0 TV sets and mobile devices will use net-based applications to manage viewing data and provide it back to broadcasters. The result is that every household or mobile user will be identifiable and addressable for the purposes of both content and ad targeting. For example, a household whose profile indicates they are parents of preschool children could see an ad for a Disney cruise during ABC’s Dancing with the Stars, while the household next door, watching the same program, would see a different ad.

Quality:

While the switch from analog to digital television brought viewers improved picture quality, the switch to ATSC 3.0 will take the viewing experience to a new level. Viewers can expect stunning pictures, immersive and customizable audio, and improved reception.

Next generation TV (ATSC 3.0) will offer the behavioral and 1:1 targeting common to digital advertising and expand TV’s reach to those who predominantly view video on mobile devices. 

What does it mean for advertisers?

For the past decade, broadcast television advertisers have struggled to deal with the continual downward slide of program ratings, an antiquated and inaccurate system of measurement, and limited targeting ability. Next generation TV (ATSC 3.0) will offer the behavioral and 1:1 targeting common to digital advertising and expand TV’s reach to those who predominantly view video on mobile devices. The new system most likely also will have big implications for cross-screen measurement and planning.

What’s the timing of this?

The first test of the ATSC 3.0 standard will occur in April 2018 in Phoenix. Ten local stations will participate, including all major broadcast affiliates (ABC, NBC, CBS, FOX, WB) as well as Telemundo, Univision, and UniMas.

Author
Peter Infante
Peter Infante

Chief Strategy Officer

pinfante@butlertill.com
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