At Walt Disney's investor day last month, Randy Freer, CEO of Hulu, said the digital video ad industryis expected to surpass $50 billion within the next three years.
Figure a couple of years after that, it could be a $70 billion market.
At that level, the digital video marketplace would be on par with where the total TV advertising market is now: $70 billion. (The digital video advertising market was $28 billion last year.)
When digital video equals total TV, at that point (most probably sometime before) we won’t be speaking about whether traditional TV will be taking back money from digital, or whether digital will be growing faster than traditional TV. Or whether TV is stronger "brand safety"-wise than digital.
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Virtually all TV will be digitally distributed via broadband.
At a certain level, TV and media executives believe there will always be an upfront market -- where brands will secure, ahead of time, the content they want. No matter how many audience segments one can divvy up -- all to compete with digital media players -- there still needs to be scale to grab the most most-viewed and most engaged content.
What about addressable and/or auction-based TV buying systems? Sure -- but as a function to get ahead of your competition. AT&T will still need to compete against Verizon, and Toyota versus Honda, and Macy’s versus Kohl’s, even with the juggernaut Amazon.
Will similarly competing brands look at totally different segments of consumers? Not exactly.
The only question: Will those upfront after-parties remain for media executives? If not, perhaps we can go to parties virtually, with Google’s new augmented reality smart glasses headgear.
Only $999. Shrimp, cocktails and chummy conversation not included.
Interesting piece, Wayne. I think that we should note that whatever the real digital video ad spending figures may be, they include local as well as national---I believe--and many advertisers using this type of platform would never be on national TV--- now or later. So it's not a dollar for dollar comparison. The upfront is where something like $30 billion in national TV buys are spent---counting non-prime as well as primetime. The main ---but not the only ----reason why advertisers go "upfront" is because the time --and GRPs are perishable. They may not be available when you need them many months later. But how many digital video GRPs are perishable and not available next April or June---- unless you buy them upfront? Until digital is organized in such a manner as to compete with TV on a level playing field--with comparable metrics, proper ad viewability, minimum fraud and GRP perishablilty, can it really compete in TV's upfront?
Wayne Friedman writes:
"The only question: Will those upfront after-parties remain for media executives? If not, perhaps we can go to parties virtually, with Google’s new augmented reality smart glasses headgear.
Only $999. Shrimp, cocktails and chummy conversation not included."
Nicholas Schiavone writes:
Only $70 billion. Accurate (valid), Reliable (stable) & Useful Media Research ...
also NOT INCLUDED!