While the TV industry has been talking about and experimenting with advanced advertising techniques such as addressable and interactive ads for years, little progress has been made in deploying such approaches widely. A new study from Deloitte concludes that it will be more than five years before those nascent forms of advertising gain much traction in the marketplace.
Addressable TV ads target specific households or narrow geographic areas, while interactive ads enable immediate and direct consumer response to messages.
Promoters of the new ad forms face the challenges of establishing a clear competitive advantage over traditional TV advertising and winning consumer and regulatory acceptance on the use of data that makes such techniques effective, per the report.
Deloitte estimates that the current market for advanced TV ads in the U.S. is under $200 million, or what could be seen as “a rounding error” in the estimated $60 billion total U.S. TV ad market.
One of the greatest challenges for advanced advertising is that traditional TV continues to be one of the most effective of the media available. “The existing system is not broken,” Deloitte states in the report, titled “The Future of Advertising: A Slow Start for Advanced Technologies,” which is based on in-depth interviews with nearly 50 senior media executives.
While advanced techniques promote targeting capabilities, for many advertisers, the use of TV is all about reach, the study states. “It’s a quick, simple and efficient way of getting to a mass audience.” While other traditional mass media like newspapers and radio have shown circulation declines in recent years, “TV holds a unique position” in that it “is becoming the only way to reach a mass audience with brand advertising.”
Deloitte said that the advertisers it interviewed were taking a wait-and-see position on advanced ad techniques. For now, they are less interested in new addressable and interactive approaches and more interested in making traditional TV spots “work more efficiently by joining them up with integrated campaign and tracking of response through online and purchase data.”
Privacy concerns may also present barriers to widespread consumer acceptance of advanced ad techniques, the Deloitte report stated. If consumers become vocal enough about their concerns, regulators are likely to intervene in ways that “impact and the growth and development of advanced advertising.”