What will happen to the advertising industry when online content can be recorded and ads can be skipped through, just as DVRs do for television today? This is a reality the ad industry will
have to face in the future, and it is important to look at the options now.
For 50 years, 30-second commercials have been the predominant monetizing mechanism of the content industry.
However, with the introduction of ad-skipping technology 10 years ago and the unsuccessful legal battles to stop its penetration, the ad industry must face the reality that the value of the
traditional 30-second spot is steadily decreasing. Advertisers are therefore shifting significant revenues to online video spots, which have now entered the mainstream and boast extensive reach.
As this space becomes increasingly competitive and innovative, online content will experience devaluation similar to the 30-second commercial.
As we prepare for this inevitable shift in
the online advertising industry, advertisers will need to engage the following three solutions in order to stay relevant:
Digital Brand Integration: The integration of
advertising into the content itself will become a more prominent practice, which will protect ads from time-shifted viewing and ad skipping. We will begin to see standardized online programming
and scalable buying abilities across multiple assets (rather than sponsoring specific projects). Personalized branding based on the viewer demographic and sophisticated integration will
deliver higher value. The practice of inserting a brand into already existing online content to guarantee viewership is becoming more and more common. In the future, the personalization of
commercials depending on the actual individual that is sitting at their computer viewing the content will be scalable and therefore much more valuable. For example, a car being driven in an
online video could be a Toyota integration that women 18-34 will view, while an integration featuring a completely different Toyota model will appear on computer screens belonging to men 35-50. This
standardized, personalized and scalable model for more effective digital brand integration will be a valuable asset in the coming years.
Interactive Content: As we see
a more advanced evolution of customized content, and social watching of non-sports content continues to gain speed, we will see two long-term benefits. First, interactive and social content will force
people to engage in real-time viewing and the option to record a show-and then skip the commercials when playing it back at a later time-will be negated. This increase in viewer engagement will lead
to the second benefit: an increase in the value of in-content advertising because of higher brand recognition.
Improved Commercial Breaks: Despite the need for new and
improved methods of online advertising, the traditional commercial will not disappear. However, the need to make commercials more relevant and attractive to decrease ad-skipping, and thereby
increase value, will amplify tremendously. There are many options still being developed, such as creating 30-second ads that are also an online game which the viewer can interact with in
real-time.
It is essential that advertisers keep up with the changes in entertainment delivery. Large advertisers that shift their budgets online must use digital integration in
concert with 30-second commercials to reach their overall campaign goals and gain the most value. Sophisticated measurement metrics, including brand awareness, brand opinion and purchase intent,
will accompany this advertising evolution. These quality scalable video solutions are already becoming available on television by forward-looking companies such as 20th Television and
others, and, when combined with online reach and personalization, they will have an effective monetization mechanism that can fund the continued creation and distribution of high-quality content.