• by George Simpson , Featured Contributor, June 11, 2010

Trying to nail down how much money is spent on advertising in the U.S. is like trying to get a BP executive to estimate how much oil is fouling the Gulf each day. But for the sake of argument, let's go with Magna Global, which estimates that this year, companies will spend a total of $164.5 billion dollars on advertising in the US (about $532 for every man, woman and child).  Of that, $27.2 billion will be spent on online (much of it on search). As usual, the lion's share –- $54.8 billion  -- of the spend will go back into TV. In fact, in the just
ended upfront the 4 broadcast nets alone pulled in about $8 billion.

 

But you might rightly ask, "What about the impact DVRs and VOD are having on the TV market?" To which Brian Wieser, senior vice president and director of global forecasting at Magna Global, says: "It's not a meaningful impact. ...The consumption of DVRs is just not that significant within the context of the entire TV medium, although it is within certain dayparts and within certain segments of the population. Even if there is DVR erosion in the medium, TV still dwarfs every other medium."

Small wonder that a new STRATA quarterly survey of advertising firms shows that TV remained the top advertising choice in the first quarter of 2010, even while more dollars than ever are moving to digital advertising.

Bash it and trash it though we may in the online industry, the painful fact is that TV advertising works. And we are a very long way from being able to replicate its reach and power of persuasion. TV buyers know that if they run an ad on Sunday night, product moves off the shelves on Monday and Tuesday and Wednesday. Implying that they are morons for paying more and getting less every year is, well, kinda pointless. Television costs too much to buy on a whim. A great deal of thought and strategy goes into nearly every TV buy and even if the results are not as measureable as online advertising, they move the needle enough so that the dollars keep flowing up Sixth Avenue.

On the creative side, ask yourself, "Would you rather spend a week on location in New Zealand with Izabel Goulart and Hilary Rhoda on the client's dime, or paste HTML elements into a skyscraper?" Yeah, me too.

So what's it going to take? All media delivered through the same digital pipe into the home where every Web site becomes its own channel in the lineup so that advertisers can see that audiences would rather hack around on Facebook for three hours rather than spend an hour watching prime time? For flat-panel LCDs to replace desktop monitors or handheld device? (hard to imagine lugging that 50-inch TV down to the subway). For the average age of TV watchers to continue to climb so that it's well into the 70s by the time we are all, say, 70? For your kids to stop texting long enough to watch a half-hour sitcom when it actually airs, instead of watching it online three days later?

It is inevitable that TV and the Internet will merge. At that point, audiences will watch TV shows on whatever device they want, whenever they want -- probably on a PPV basis -- or have to sit through embedded ads that cannot be skipped. At that point it will be easy to do a side-by-side test to see if ads on Web sites are any more or less effective that those that interrupt shows. Of course, by then TV ads will be totally interactive, so what might today be a slight advantage for online ads will totally disappear.

Likewise, viewers will be able to pause TV shows and navigate elsewhere to see the latest high-def images of the spewing plume, or catch a quick porn video while the wife is on the phone in the kitchen, devastating any ability to predict audiences for commercials during upcoming pods.

But nothing will be sold on predictions anymore, rather on actual audience interaction. If "Glee" doesn't hold audiences strongly enough to get them to ask for more information from advertisers, then networks will wonder why they are paying millions an episode for original programming. They might find out that how-to sites hold audiences better and they are quicker to spend there because their heads are squarely in their hobbies and not wondering who Quinn will give the baby to next season.

Screens will be split into quarters, if not eights, so that the electronic generation now in diapers won't be forced to make choices -- they will be able to watch a couple of different TV shows, a movie, chat, upload photos, answer e mail, listen to music and still work on homework. The New York Times says that all of that multitasking will make us all incapable of learning or deep thinking so our kids can look forward to watching reruns of 50s era sitcoms and being perfectly entertained. Thus will TV triumph once again.