TV Ratings Insurance?
What will the next generation of TV advertising look like, and who will drive it? I participated in a panel discussion this week at OMMA Video where we wrestled with that question. Will set-top-box data and measurability change TV? Will it be advertising leveraging "Request for Information" interactivity on standard remote controls, as Canoe Ventures is advancing? Will it be addressability combined with demographic or purchase data and an influx of direct mailers? Or will it be driven by cross-platform campaigns linking Web video to TV campaigns?
My sense is that it won't be that simple. I do think that we are on the verge of the next generation of television advertising products and a significant acceleration in TV ad spending. In fact, I believe that we could very well see TV ad spending in the U.S grow from its current $65-$70 billion annually to $100 billion by 2015 or 2016. Yes, that big. Half of that growth, I believe, will be data-driven.
However, technology and data alone won't make TV advertising better. We are not facing a situation where if you build it, they will come. No. I believe that it will take some entirely new approaches, new business models and new companies to deliver that growth and to convert technical capabilities like set-top-box-data-driven addressability or push-button interactivity into real products that TV networks and operators can sell and marketers and their agencies can buy.
Just look at how the online ad market developed. Dynamic, cookie-based addressability was introduced on the Web in 1995. However, it wasn't until 2003 or 2004 that we saw optimized performance marketing take off, with the scaling of services from companies like Advertising.com and 24/7 Real Media. Folks were selling ads on online search pages in the mid-'90s, but it wasn't until GoTo.com/Overture pioneered a keyword-based, pay-per-click business model several years later -- and Google improved on it -- that paid search took off.
What might new TV approaches look like? I believe that, like the Web, performance-oriented sales models and inventory yield management will be key components of any success. Selling marketing results, rather than just better-targeted media, will remove risk for marketers and agencies and make it easier for them to test new products. Driving up revenue and profit yield for networks and operators -- perhaps guaranteeing it, rather than just enabling them to sell more complex products -- will make it easier for them to embrace new offerings.
An example? I spend most of my time these days thinking about how data-driven targeting can be applied to TV program promotion, and am headed to the industry's PromaxBDA conference in L.A. next week, so I will offer an example in that industry sector. I believe that we will soon see TV programmers and marketers able to buy ratings -- or "ratings insurance" -- for critical programs. Thus, rather than just buying off-air media time to promote new show launches, or for mid-season episodic show maintenance, television system operators will leverage their set-top-box data and predictive ad targeting technologies and "guarantee" ratings for shows.
Does selling "TV Ratings Insurance" sound crazy? I don't know. It's probably not much harder than selling and delivering key word buys in search. What do you think?