Pay-TV operators in Southeast Asia have long argued that ad plans fail to reflect pay-TV’s share of viewing or consumer spending power. Now, the battle for ad dollars is opening up on two flanks, with pay-TV trapped in the middle. Free TV continues to hold down the mass market but now online video is making a persuasive pitch for more targeted spend – a key selling point for pay-TV.

Operators are fighting back. Astro in Malaysia and StarHub in Singapore – two markets where better broadband networks are driving online video viewing – have both commissioned research agencies to turn the streams of audience data flowing through their networks into useful insights on consumer behavior.

These investments are attempts to create alternative TV ratings systems that can supplement, or even replace, existing services. Increased viewing via on-demand, catch-up and multiscreen platforms tends to go unrecorded by traditional ratings panels, while online rivals provide more information than ever to tap marketing spend.

This has spurred operators into action. Astro has christened its offering DynamicTAM (DTAM), while StarHub’s has been dubbed Smart Targeting. Similar services should follow, in Southeast Asia and beyond.

“The industry is desperately short of accurate data that captures the changing viewing habits,” observes Astro’s COO, Henry Tan. “As such, the market pays more emphasis on buying efficiency rather than efficacy – the real goal of advertising. DTAM will provide marketers with rich, accurate data and the option to go beyond demographics. This will lead to better results, and Astro aims to gain our fair share.”

Audience scale

These moves by Astro and StarHub leverage audience scale, harvesting granular viewing data from set-top boxes that is robust enough to target specific audience groups. Each has been designed around particular market opportunities, however.

In Malaysia for example, Astro is assembling two household panels to measure TV: one covering 30,000 Astro homes, representative of Astro’s subscriber base, and another smaller selection of 4,000 homes that mirrors TV viewing as a whole.

The latter will also overlap with Kantar’s ongoing shopping and usage survey Worldpanel, establishing a link between TV consumption and household purchases that will help Astro woo mass market brands that spend heavily on free TV.

“This marks a fundamental shift from demographics to buyergraphics, at least in the FMCG sector,” says Steve Garton, a media research specialist. “Campaign cause and effect can be tracked in terms of sales. Non-FMCG categories will be harder – such as finance, travel, auto. But there are potential work-arounds and modeling that could be deployed.”

Half of Malaysian TV homes subscribe to Astro’s pay-TV service while a further 10% has signed up for its free satellite service, Njoi. Astro’s share of TV ad spend is failing to keep up with rises in its share of TV viewing however. It faces competition for its upscale audiences from online video, while terrestrial broadcaster Media Prima has a firmer grip on the mass market.

Tan, a former media agency boss, is keen for the industry to move beyond existing measures that tend to standardize audiences and media consumption, such as CPM and CPRP. “Targeting consumers by context, brand choices and psychographics is the future of advertising,” he declares.

StarHub meanwhile, a telco which manages both cable and mobile networks, incorporates audience information from both sources for its Smart Targeting service, which allows advertisers to track audiences across multiple platforms and to adjust the frequency and content of ads accordingly.

Like DTAM, Smart Targeting helps put TV on the front foot in the battle against online video by offering more refined segmentation and targeting capabilities – advantages that had mainly been the preserve of digital media.

The largest online media companies are improving their audience tracking capabilities too, throwing the gauntlet down to other media. Websites traditionally record visits by devices rather than the people using them, an increasingly unreliable measure as internet browsing extends across phones and tablets as well as PCs.

A clearer view online

Now the likes of Facebook, Google, Microsoft and Yahoo are encouraging people to log in to their services which are offered across the web, making it easier to track multiscreen behavior while giving marketers a more accurate view of internet consumption.

“That’s putting pressure on offline channels, and making them think: what have we got in our ecosystem, how can we bring it together, how can we bring more advertising dollars and a better return for marketers,” says Sunil Yadav, Asia-Pacific president of Amplifi, the media buying and partnerships arm for communications company, Dentsu Aegis Network.

Smart Targeting represents StarHub’s most serious pitch for ad dollars since setting up its Cable TV Virtual Diary or V-Diary, nine years ago. Smart Targeting looks set to replace the existing service. StarHub is also struggling to capture ad spend on a par with its share of audience. At the same time, online video is even more prominent in Singapore, heightening the challenge.

Location-based ad opportunities on StarHub’s mobile platform should help lever budgets away from newspapers, still the largest ad segment in Singapore, but better audience insights gleaned from mobile should drive more TV spend too.

“This is to future-proof on digital,” says Bharad Ramesh, a former buying head for Starcom and ZenithOptimedia in Southeast Asia, who now runs digital media consultancy, eMV. “For a long time StarHub couldn’t give me moms, only a women’s channel. But right now both StarHub and Astro can potentially give me a network of moms, which would be very useful. I would pay a premium for that.”

Pay-TV operators worldwide have been exploiting so called return-path data (RPD) from set-top boxes for more than 10 years now. In APAC, these systems are relatively well established in Australia and New Zealand while beginning to pick up steam elsewhere, helping operators to keep tabs on fragmenting audiences as well as the uptake of interactive and multiscreen services.

Operators don’t always share the data, but the information is also invaluable for broadcasters, who mainly use set-top box data for scheduling, carriage negotiations and ad sales, as well as more general channel positioning and promotions.

“Monetization is one thing,” says Hui Keng Ang, SVP & GM at Sony Pictures Television Networks, Asia. “More importantly, RPD gives a more complete and accurate understanding of viewership and audience patterns. There are more and more households with PVR, more time-shifted viewing. A serious error can be made if we just base programming decisions on linear viewership.”

Indian DTH operator Tata Sky set up India’s first RPD service last year, while Korea Telecom uses return-path data to monitor its IPTV service. Increased visibility of RPD within a market can prompt others to follow suit, but that’s not always the case.

“One to two operators in India will start RPD services in the near future – we are working on a couple of those,” says Nick Burfitt, global director of RPD Services for research agency Kantar Media Audiences.

“But it is very much led within the operator. In some markets, where there is no RPD, some operators see a first-mover advantage. But it’s more about the business value an operator can get. It is picking up speed generally, partly because some technical obstacles are easier to overcome.”

DTH can play

Wider proliferation of broadband set-top boxes helps too, with an in-built return-path channel, although that hasn’t been an insurmountable obstacle in the past. DTH operators for example, which lack the two-way connectivity of digital cable networks, can use modems instead that relay the necessary information back down a landline.

Approaches can vary widely, however. Some companies choose a census service, that give a wide spread of information at a household level, while others opt for a panel approach, enabling them to gather more information on people living in the home, from demographics to product ownership.

This level of detail appeals to channel owners, competing in an increasingly crowded space.

"The raison-d’etre for pay-TV channels is that they serve a specific viewing segment, and not necessarily the whole population, hence the need for RPD measurement to provide data beyond household-level data,” says Henry Robles, Asia-Pacific research director at regional broadcaster NBCU Global Networks.

“Return-path data services in other markets, such as Australia and South Africa, already provide individual viewing data.”

This article also appears in the Q3 2014 edition of Media Business Asia magazine.