Death Greatly Exaggerated: TV Key To Media's Future

by Wayne Friedman , March 24, 2009

OMMA Global Hollywood

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."

television, trends

4 comments about "Death Greatly Exaggerated: TV Key To Media's Future".

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Kevin Mirek, March 25, 2009 at 11:05 a.m.
You wish! TV Broascasters will either begin charging for content and litigating pirates or they will go belly-up well before your 36 month window. I'd start looking for new sources of free content.
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John Grono from GAP Research, March 25, 2009 at 5:34 p.m.

Finally, some perspective being added to the media consumption debate. The statistic that sticks most in my mind - that the growth in daily TV minutes exceeds the total usage of online video.

Max Heilbron from Goodby, Silverstein & Partners, March 27, 2009 at 2:06 a.m.

There's no reason cable hasn't come this far, except for a fractured marketplace and institutional laziness. Maybe Verklin is the guy to kick them in the nuts. Household addressability would be an interesting trick - not sure how it would scale, exactly...

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Warren Lee from WHL Consulting, March 30, 2009 at 2:33 p.m.

Was at the show and saw this panel. My comment to Joe, the moderator, was that this subject is so relevant and compelling that it should probably morph into a conference track, or a stand alone conference. On the dais there was a whole slate of key note speakers. Great job of "stacking the deck" on panelists Joe. The subjects that this panel addressed were fascinating and it could have gone on for hours.

When Canoe picked David Verklin as their mouthpiece, they could not have picked a more passionate advocate.

One thing that I would like to say about this whole convergence thing is that there is starting to be a blur of what is TV, what is cable and what is online. For my money, I'd like to see all of these mediums available on the same big, HD flat panel monitor and have the electronic box that drive each of the systems sold separately. I know that most of that is available already, but it should be more mainstream.