The rumors of the demise of television advertising and the 30-second spot have been greatly exaggerated. The prevailing fear of the complete transition of television content to the Internet -- and the horrible impact this will have on television advertising -- is just plain wrong. On the contrary, new technological solutions and the digital deadline are going to double television advertising dollars.
Yes, content will be available on certain portals. But let's all step back and face reality. The wonderful thing known as the television, that lovely 30- to 60-inch box sitting right in the middle of the living room, is and will continue to be the main advertising vehicle for the United States.
The noise and the hand-wringing that have come because of the launch of companies such as Joost, and from companies such as Google, Microsoft and Apple claiming that your PC is the next television, are wrong. Television currently offers a huge, engaged audience, is a trusted medium and the basis of entertainment for most of the households in the country.
Television on the Internet currently offers accountability and better targeting and engagement metrics. On the other hand, it also offers security problems, a bad viewing experience, and questionable and unproven media buying and planning technology.
Thankfully, with the move to digital in 2009, along with the arrival of new technology systems that will build on the legacy of television advertising, the advantages that television on the Internet has for advertisers will evaporate. So, beyond security problems and having to pretend watching "Heroes" on a small computer monitor is just as good as watching it on an high-definition TV, new "television-killing" Internet portals have nothing that television will not be able to offer advertisers in only a short time.
These systems currently being planned will provide:
Accountability through the ability to capture and track consumer responses to show advertisers a true return on investment. Precise engagement metrics. The ability to adjust and allocate ad spends appropriately, promoting automation, accountability and efficiency. The ability for viewers to interact with advertisements and product placements using their remote controls, without leaving the couch. These clicks will be recorded and sent directly to a viewer's Internet accounts, providing uninterrupted television viewing with the ability to manage their advertising responses later. The ability to make mass media buys (the ever popular 30-second spot) as well as targeted advertising direct to the individual. The ability to use any new digital advertising technology, including clickable ads/banners. The ability to insert advertising into every aspect of content. If viewers see a new song by the Dixie Chicks during the Grammy Awards, they will be able to simply click "OK" on a remote control and have the song queued for purchase on their Apple iTunes account. The line between content and commercials will no longer exist. The ability to match exact TV responses with consumers and their visits to advertiser Web sites for analysis and matching against future responses, Flexibility for media pricing, which will be determined by advertisers, advertising agencies and media outlets; Near real-time ad insertion (for example: The Red Sox beat the Yankees in Game 7 of the playoffs again this year, and Sports Authority immediately inserts advertising showing the availability of Red Sox shirts before the champagne is popped).
The ability to tie existing direct marketing efforts to target individual households and set-top boxes. The ability to push traffic to an advertiser's existing Web site via TV responses -- allowing marketing messages to be effectively coordinated between both mediums. The above are just the beginning of what will become the television advertising revolution. TV ad rankings based on number of click-throughs will become as important as Google rankings, and ultimately will become the measurement vehicle of choice. The future of TV will bring all of the possibilities and advantages of Internet television portals -- with none of the drawbacks.
The television advertising market will not shrink. It will double. And while these newly launched Internet television portals will find a niche, and I am sure will be a decent advertising investment for some groups, they will never really challenge television as the most reliable and effective advertising format.
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In both cases, these are the industry drivers that allow companies such as Google & Co to monetize your clickstream.
Beyond having the best algorithm for this purpose, not much of new developments have been done to monetize peoples clickstream’s better yet, apart from going into new market segments such as localized search and ad’s.
There’s a “Holy Grail� of search and internet advertisement yet to find though. So far, no one has yet come up with a way to find it. What I am talking about is Behavioural Targeting (BT) and Search Personalization (SP).
Behavioural Targeting seeks to track your search and browsing history and display advertisements that might be contextually relevant based on your online behaviors. Similarly, search personalization attempts to determine who you are, be either demographic data you provide and/or by your clickstream history. This way, a search engine can provide more relevant results, as well as more highly targeted ads.
eBlizz is a newly founded software start-up that has found a very simple way of making Behavioural Targeting and Search Personalization work. eBlizz approaches search and ad-targeting differently than web-centric ad-placement systems and platforms.
For one, eBlizz is not a website; eBlizz is an open P2P platform for publishing and exchange of content that further also allows for interaction between users and the content.
Secondly, eBlizz is not a web-centric platform; eBlizz is a SmartClient application on your device, which means your SmartCient has a much better insight in your entire communication taking place over the platform and not just over a few selected websites.
The difference is better understood if you compare any search engine today, relying on a web-centric approach with a listening device trying to pick up your phone conversation (who did you call, what did you say, what might have been your intention) with a switch board (you called this number, we know exactly what you said and this was your stated intention).
Google & Co tries to tackle the problem from the outside whereas eBlizz SmartClient sits on the inside. Google & Co can only look on data that is exchanged between your browser and a website, trying to second-guess your intentions. The eBlizz SmartClient is the platform which makes it so much more efficient at analyzing your true intentions of a search or content consumption.
The eBlizz SmartClient is autonomous and has a degree of semantic data analysis built into it, which makes it possible for the SmartClient to follow your communication, search and content consumption and deduce who you are, what you like and why you like it. Content consumption, search and communication does not rely on a central web server, but is done P2P.
Only your SmartClient has a hold of this data, but will on request from the eBlizz BackOffice system answer if it is interested in advertisement with a particular set of attributes. The SmartClient will answer positively if a certain level of attributes fit and link to the advert at the right time, in the right context, whence the user stands the best chance to consume the advert and react to it.
Thus, eBlizz does not sit on, or maintain any BT or SP relevant data. Rather, the many SmartClients in use, forms an autonomous network of nodes that react to any requests for an ad-placement any advertiser wants to place through the eBlizz BackOffice system.
Thus, eBlizz actually has more in common with the new generation of digital Television technology than any internet portals.
Anyone care to comment and tell me what you think about the idea?
Interesting how the tv guy falls back on HD and the screen and never really articulates that the concept of content will always win is grasped. Oh, and all those wonderful systems currently being planned, step-back and acknowledge the fact that those metrics, best practices and infrastructures are indeed developed, maintained and perfected by years of being executed online.
It’s funny to me to see the juxtaposition of: “questionable and unproven media buying and planning technology� when speaking about video online, immediately followed by “wait until 2009� when TV gets their act together.
Perhaps you should change your positioning from 2009 to “tomorrow we will become accountable.� That way when someone asks, when will you hold up your end of the bargain, your answer can always be- Ask me again “tomorrow.�
No one is going to sit and watch a 17-inch laptop screen instead of a 56" DLP HDTV. The screen is not going away.
But what IS going to happen is that delivery of content FOR the screen is going to slowly slip away from digital broadcast over RF waves, over cable, or satellite. Instead TV is going to shift to an "OnDemand" functionality that will initially be over the Internet. Ideally someone will come along and re-purpose the existing broadcast delivery systems to carry the burden of the "down-stream" of data, with perhaps an online component determining the "up-stream" request and status of the "down-stream."
But Apple TV, the Xbox360, and their ilk are the future of TV content. All that needs to be hashed out are pricing mechanisms (subscription/mandatory-viewable embedded ads/rental pricing/purchase pricing). Also, some of the details of a more efficient storage and distribution.
But that is the future of the medium.
My 50-something non-techy wife has ruled our TiVo for 5 years now and let me tell you how 17% of the viewing homes watch TV: They watch many more shows and far fewer commercials. She will TiVo six or more shows a day (she works full-time) and then watch them in a big hurry, skipping the commercials and slow stretches. If it's a live telecast, like American Idol, she'll watch another show during the commercials. She needn't worry about rejoining Idol at the right moment, because it, too, is being TiVo's on our two-tuner model, so nothing is ever missed, except the commercials. She watches lots and lots of TV and nary a commercial. Her appetite for TV is huge, but those commercials and closing credits and promos just get in the way. TiVo is a godsend, except for Madison Avenue.
The reason the whole network TV system hasn't crashed and burned yet is that "only" 17% of homes have DVRs. Still that's a 50% increase over last year. At this rate, we'll be at 50 percent penetration in just a few years and all the whistling-in-the-dark Kokernaks will be wrong. But along the way, the Poltracks will have fooled enough industry people into thinking that only half (or a third or some liars-may-figure statistic) of viewers skip the ads. The logic is: Not everyone skips the ads, therefore only a neglibile number skip the ads. Bad logic.
Ad skipping is coming (and already entrenched, at my house). And the first question to ask the naysayers is "So how long have you watched with a DVR?" and discover that they really only watch a little TV, some sports maybe, and that they have no idea how few commercials are being watched in real-time.
P.S. My favorite show is My Name is Earl, which I never watch on my TV, but sometime during the following week on NBC Rewind, because I only have to watch one or two very brief commercials on my computer monitor.
The KEY point to me anyway, is the TV in the middle of the living room. As an online video fan myself and both creator and producer, I still find the viewing experience of online video to be ridiculously BAD. The average monitor is still too small, the office chair is nowhere near the Lazy Boy, lighting is bad, and the "mood" is wrong for passive, relaxed viewing. There is no equivalent of the remote control, and most importantly (to me anyway) the home computer is usually in a room or a corner away from everyone else. For MOST of the media consuming U.S. population this IS NOT where people go to relax. Youtube, Joost, Brightcove and whoever else - should be most concerned with fighting the Lazy Boy and the living room or at least catching up with it. I think online video has a TREMENDOUSLY huge way to go b4 it is anywhere near as "consumable" as television, mainly because of the lame viewing experience that is online video.
I think we have come nearly full circle in some ways. In the beginning of this whole technology boom, the old school dinosaur user did not understand how technology worked and could not see the fit. Those of us that "got it" just shook our heads. Fast forward ten years and those of us that supposedly "get it" can not seem to fathom how the average viewer of media still sits in a living room on a couch with a remote control and a big gorgeous screen, good lighting, and that ridiculous old comfy leather chair. If online video is a supplemental piece intended as tech support or sales support that's one thing. But as entertainment media trying to sell itself as a replacement for TV content, imo it is not even close at this point in time.
No doubt consumers are buying larger TVs as the centerpiece of their home theaters. But live TV viewing on those sets is declining as video game, dvd and dvr activity increases.
Not to mention co-viewing goes down tremendously as families pursue their own content options beyond the "living room".
The Superbowl, American Idol and the Oscars will continue to draw ratings - and will be proudly featured on those living room boxes. But TV is facing the death of a thousand cuts. And truly, I suspect it will not die, but continue its current (d)evolution.
True, despite all this, Network Television remains the best way to cume reach quickly today, and that has a value to some advertisers. But to suggest it will continue to be the lead medium in the future seems irrationally optimistic.
There will be always be a market for ad-supported television; it’s just going to be a lot smaller than it is today. Network, local and syndicated television advertising dropped by $700 million in the first quarter. That’s about twice the losses for the beleaguered newspaper industry. If these trends continue there won’t be much of an advertising business to double when the digital era arrives in 2009.
Then the cost of advertising will finally be tied to how many people are actually watching and interacting with the ads.
And the cost of TV advertising will readjust (ie plummet) in relation to online advertising.
It will be good for consumers and good for advertisers.
But it will force broadcasters to change their business model.
The internet and the TV are going to be one thing in the future. It will be the flat panel on the wall and will allow for passive viewing (TV today) or active viewing (internet of today but better search and usability) and eventually the combination of both; IPTV.
The scenario of pausing a program to roll over a highlighted area to gather more information is where it is going to go. Imagine watching the Travel Channel and pausing to book a hotel room featured on a program. TV and the Internet will be housed on the same interface (along with the phone).
The quality of video is getting better daily. http://lx.tv is a lifestyle internet channel that features high quality video. More and more are shooting at 720P format that is a 16x9 ratio and can be pushed to HDTV quality with ease. Also looks great on the mobile.
The integration of these two mediums is an amazing opportunity and will be a great user controlled experience.