Death Greatly Exaggerated: TV Key To Media's Future
HOLLYWOOD, Calif. -- The not-so-big secret about how online is changing TV is that traditional TV viewing will still be a big part of the future.
During an OMMA panel called "How Online Is Reshaping The TV Advertising Marketplace (and Vice Versa)," Manish Bhatia, president of advanced digital services for the Nielsen Company, says just looking at the increase in TV usage in the last year tells a big story.
Bhatia notes that the average TV viewer increased usage five minutes over a year ago. The contrast to online usage is glaring, he says. Just the TV usage increase alone beats how consumers consume video on the Internet.
"The average person spends two minutes watching a video online," notes Bhatia. "If I were to fast-forward, we will probably be spending more -- not less -- time with TV." In particular, he notes, the future means using TV more as an interactive medium.
The Internet is pushing older TV platforms to transform. Canoe Ventures CEO David Verklin says changes are coming for the marketers in the next six months. Canoe is a venture of the six top cable operators representing 96% of U.S. cable TV homes.
In six months, marketers will get "zone addressability" -- thanks to some 60 million set-top cable TV boxes in consumers' homes. For example, says Verklin, American Express could get to advertise their Green card nationally, while its upscale Gold card will target a "zone" -- households with income over $100,000.
Verklin says the holy grail of TV marketers will happen later -- perhaps in 36 months -- when true household addressability arrives.
After years of criticism, the cable industry has been slow to address marketers' true needs, Verklin insisted. "The cable industry gets it. We have 18-year-olds. We know what the Internet is. We are not Luddites."
The technology is there -- but will new business follow?
Scott Ferris, general manager of Microsoft's Advertiser and Publisher Solutions Group, said the future is about how legacy business relationships will change between marketers, media agencies and the traditional TV networks, as well as those who buy and sell TV programming.
"It's the greatest coefficient drag in the industry," he notes. "It's not the technology. It's: What is the business model?"
Tracey Scheppach, senior vice president of video innovation director of Starcom USA, wishes that any new model -- especially addressability -- would happen sooner. That said, Starcom has some 10 clients right now that are investing in addressable advertising.
Scheppach says there are still internal disputes at her media agency when it comes to buying a program versus buying an audience. Differences of opinion also come in regard to the value of the TV consumer.
"I ask myself: Am I a more valuable target watching 'American Idol' or late-night cable at three in the morning? We are wrestling with those issues."