Commentary

The TV Ad Revolution Won't Be 'Televised'

Even in the midst of a golden era for TV programming -- a time when Walter White, Don Draper and Daenerys Targaryen make Sunday night lineups nationwide social media-watercooler events -- television's traditional format is under heavy fire. Consumers have more ways than ever to access programming, with Google's Chromecast just the latest in a long line of Trojan horses bringing that content to their televisions.

From the advent of the VCR to the birth of the DVR, consumers have skipped and disrupted the commercial-viewing experience. As programming moves online, what happens to the traditional TV ad buy?

While TV execs worry about the increasing amount of time people spend on second, third, and fourth screens, some of the most powerful forces in tech -- a list that now includes Apple, Amazon, Google, Microsoft and Sony -- have been working on ways to bridge the Internet/TV gap. Now that gap is shrinking and the difference between television and online video experiences is shrinking with it.

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When the dust settles, most of the TV experience will be unchanged -- except for one small but extremely significant difference: The ads we will be served won't be based solely on the content we watch, but how we watch it. The full power of the technology that drives online advertising will be used to target, create and deliver ads and content that reflect consumer interests, wants and desires.

That may not sound significant until you consider the current video advertising landscape. There's no questioning TV's traditional stranglehold on brand ad money. Television's "sit down and view" format has earned the benefit of the doubt from advertisers along with heaps of ad money. However, when commercials play, there are no metrics to show whether someone completed an entire viewing. Now consider the strategy, targeting, and metrics made possible by video ads online. The tried, tested, and trusted television commercial experience, combined with the nuance of online ads, will be an absolute game changer for brands.

And all of that online ad technology will help advance the revenue base and business case for the other seismic channel shift: the distribution of programming. Netflix, the face of the "television gone Internet" revolution, currently features zero advertisements. It has maintained an $8-per-month subscription model despite competitors like Hulu successfully adopting ad-based revenue streams. While in the future it's likely that every streaming content service will feature ads, we can guess that content producers would prefer their own distribution systems, with great profits and control. That might be out of reach for most, but future set-top boxes from Google, Apple, and others can offer content creators the next best thing: They can take out the streaming middlemen and give the AMCs of the world a more direct line to consumers.

It's clear that advertising will remain an enormous part of the television experience, even if that experience is about to undergo the biggest revolution since the '80s and the emergence of cable TV. But the new breed of video ad? It will be smarter and more efficient. It will be targeted and considerate of hundreds of consumer factors. It will able to do things that today's television ads can only dream of. It will be a real revolution in the industry, but it won't be televised.

1 comment about "The TV Ad Revolution Won't Be 'Televised'".
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  1. Douglas Ferguson from College of Charleston, October 16, 2013 at 2:42 p.m.

    So there's zero chance that commercial interruptions will fade away as viewers learn to skip ads while timeshifting or resort to binge-viewing? Seems optimistic.

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