What is more important for brands advertising on TV; cost effective audience reach or the consumer’s viewing experience?

At the Connected TV World Summit this week in London over 600 broadcast media industry attendees from across the globe were rightly focussed on delivery of effective ‘audience reach’ in the ever-evolving world of television advertising – or in non-industry jargon terms the cost-effective ability to gain unique viewers for TV advertising regardless of what channel or platform they are watching.

Linear TV in the last 10 years, driven by seismic changes in the UK broadcast landscape, now generates a distinctly mature viewing audience profile as the 16-24 year old ‘early adopter’ segment has moved away substantially driven by the huge rise in social media and online content consumption.  According to the last published OFCOM Media Nations 2025 annual report this younger audience now watches on average just 31 minutes per day of TV - in 2019 this figure was 90 minutes.

To continue delivering younger target audiences the key traditional UK TV media owners - ITV, Channel Four and Sky Media - have become increasingly reliant on their Broadcast Video on Demand (BVOD) airtime packages as a solution to this systemic, and some argue, longer term existential challenge.

The cost of BVOD and Subscription Video on Demand (SVOD) airtime, however, depending on the media owner, is between 15-40 times more expensive than linear TV airtime.  If, like most DRTV advertising clients, your focus is on immediate monetary return on investment from TV campaigns it may not be a surprise to hear that BVOD and SVOD do not often appear on DRTV media plans where monetary ROI is often the key priority.

The fundamental issue for all TV advertisers, and in SmartResponse’s view, the far bigger issue at hand in the current broadcast environment, is not just the comparatively high cost of SVOD and BVOD TV airtime, but the often very poor consumer viewing advertising experience often delivered via these on demand platforms. 

On SVOD and BVOD platforms audiences will often witness the same TV adverts being broadcast in consecutive advertising breaks typically from the UK’s largest media spending brands presumably targeting maximum audience reach outside of linear TV airtime inventory - but at what cost and what ‘effectiveness’?  SmartResponse watched a film on one of the larger SVOD platforms in March and saw the same brand advert broadcast in 10 consecutive advertising breaks!

This then begs the uncomfortable question that the TV advertising industry seemingly refuses to engage with regarding BVOD and SVOD airtime inventory.  At greatly enhanced media prices coupled with targeting audience technology (a key component to justify inflated media yields, but this strength is also their weakness) will there ever be enough variety in an advertising breaks on either SVOD and/or BVOD platforms to make this a viable medium for TV advertisers seeking an immediate measurable monetary return on investment, or indeed the pursuit of cost-effective audience reach?  Surely one cannot be achieved without the other.

The static growth in BVOD TV airtime in the UK at circa 14% of all viewing in recent years, according to OFCOM, suggests an obstinate ceiling in terms of demand.  For SVOD, the introduction of third-party adverting remains a relatively new development but based on the latest consumer viewing offering it would appear to be going down the same flawed highly repetitive advertising route as BVOD.

The broader question therefore remains for all TV advertisers – what is more important for your brand; effective audience reach or the consumer’s viewing experience?  The latter seems to have been badly overlooked this week at the Connected TV World Summit in the endless pursuit of reaching younger viewers at all media costs for advertisers.

Based on these fundamental challenges, substantially driven by generational change in viewing consumption, what does the future potentially look like for the TV advertising industry as we progress through this decade and beyond? 

SmartResponse assert consolidation will become inevitable for some of the newer players who are clinging on to the advertising funded business model to survive – CTV and FAST channels look particularly vulnerable without the additional commercial benefit of subscription revenue enjoyed by the main SVOD players who augment their market dominance with eye watering content budgets.  According to various research presented this week at the Connected TV World Summit Amazon Prime, Netflix and YouTube will dominate the CTV space in the years to come with smaller players falling to gain meaningful share in the next five years.

Normalisation of all TV media pricing across BVOD and SVOD platforms surely must be required in due course.  This would drive wider demand from those incumbent TV advertisers who have successful businesses but are currently reliant predominantly on ROI driven by linear TV airtime investment as the more cost effective and much more sophisticated in delivery and measurement ‘older sister’ in AV broadcast advertising. 

Many brands, including most DRTV advertisers, would clearly like to expand into SVOD and BVOD inventory respectively to reach younger audiences.  If the media cost was viable, this would enhance the consumer viewing experience via an increased variety of advertisers airing, making these platforms both cost effective, and as importantly viewer friendly and ultimately would drive overall growth for the broadcast sector for both brands and media owners alike.