Archive for May, 2006

More IPTV and its affect on Advertising


I’d like to point you to an interesting article entitled Addressable IPTV Advertising: Dramatically Increasing Advertising Revenue per Viewer. It has some good stats and thoughts regarding the IPTV world and addressable advertising.

The author states:

One aspect of the radical change envisaged with IPTV is that TV advertising will become much more personalized. Whilst viewers are watching the same content, the ads that are played out to them can be varied according to demographics, shopping habits and personal preferences, so that advertising becomes a lot more relevant.

Why? Because of addressability in the IP world. Yes I agree, but many other things have to change as well. First we have to start with how ads are sold, some national and some spot. The real question is, how is the IPTV model different than the current cable TV and network TV models?

First of all, in an IPTV world, theoretically there will be an explosion of content beyond the programming we currently see. Networks will continue to generate content, but they will face even more competition with more specialized content providers. I suspect it’ll even get into the user created content arena. After all, the Internet really is the great equalizer! But the service providers will control the funnel early on and thus control the content available. After a while, even more innovative ways will be developed to make more, if not all content available through this medium. I don’t know how the FCC plays in all of this, but they’ll try. I’m sure there will be a ruling somewhere down the pike that classifies IPTV as they do the Internet today. In this world, ads probably won’t follow content, but content will follow ads. Instead of attaching their ads to specific content in order to reach their audience, advertisers will attach their ads to targeted lists of consumers whatever they might be watching. The content providers will get their cut, but the way ads are bought will be quite different.

This is speculation on my part, but this is a scenario that to me has merit.

-Andy

They’re Still Not Ready – Part 2

Still more evidence of the maturity level of the targeting market can be found in an article called Picking Your Spots on the TelecomDirectNews.com site.

Most of the major cable operators last year implemented a way to target ads by regions sometimes as small as metro zip code areas, but that measure was largely preparatory for what comes next.

I don’t know about you, but for the most part, I don’t have the same profile as my neighbors. I’m not sure this is much better than pure broadcast advertising. The author of this article realizes that the goal is targeting at a household level. I’m not sure the incremental steps in getting there will capture the attention of the advertisers.

They’re Still Not Ready

With all the hype and all the promise of addressable advertising, it’s still not happening. An article I read in MediaPost called Address(ability) Unknown by Jonathan Blum, May 2006 issue does a good job in discussing this space. The article states

for all the money invested and all the interest generated, the number of by-the-home addressable commercials delivered in 2005 was exactly zero. And 2006 looks to duplicate this grim score.

I guess I knew this, but with all of the media hype by companies creating applications, it’s easy to forget we’re still at early stages of this development. The hold up, I think comes from the carriers inability to deliver individual ads to individual homes through their cable networks. But, why is this an issue? Don’t they regularly send data to individual set-top-boxes today? Isn’t an ad just data? The answer to both of these is yes. One of the stumbling blocks is volume. Today, a local ad is inserted into the programming at the headend of the cable system and distributed to all of the viewers on that system. To insert based on targeted households, this process needs to change where the insertions are made at a lower level . This could be within the cable system or could possibly be pushed down to the STB and called in by cue tones. These processes and applications are not in place yet to accomplish addressability of ads. Also, the issues of priority of ad placement, privacy and accounting are barriers to this becoming real.

Yet, this is a goal worth pursuing where the mechanisms are in place to send the right ad to the right person at the right time. If the cable companies don’t get their part figured out, they’ll forfeit ad revenue to those media that can deliver better results and accountability.

-Andy

UpFront Dance

I was listening to NPR this morning and a segment was on the Ad Dollars at Issue in TV ‘Upfronts’ by where the networks roll out their new shows to the advertisers. Last year nearly $9 billion was spent by advertisers on UpFront buys with the networks. The Network’s pitches are: “we have a greater reach than any other media” (i.e., more eyeballs), and “buying into our shows will give you the best chance at reaching your desired audience”.

To a certain extent, this is business as usual however, there is some nervousness on the part of the Networks as to how many ad dollars will be diverted to the Web and other media. There are also the issues of accountability and use of TiVo-like devices to skip ads. Will there be a shift in dollars this year or will it continue as before? Have advertisers finally embraced other media that have better feedback mechanisms and better targeting possibilities over the traditional, “more eyeballs is better” game they’ve been playing for so long?

I think we’ll see a nice size jump in Web advertising this year and a trickle into mobile advertising as it finds its way. The Networks will find more ways to capture ad revenue outside of their traditional venues as they gain an even more prominent place on the Web and accelerate their cross-promotion opportunities between TV and the Web.

Readers: I’d like to hear from you on this!

-Andy

Off-Portal Mobile Content – Part 2

Telecom Direct News had a good article titled: The Wireless Back Office, Up Close and Personal It speaks of the inevitability of the growth in off-portal content use by consumers over mobile. It also correctly states the problem of simple search and navigation of this content.

Reference back to my post called Going off Portal

Ad Skipping – Part 2

An article in the New York Times titled Someone Has to Pay for TV. But Who? And How? Deals with the skipping of ads with DVRs and what could happen via manufacturers of equipment to combat (ok, too strong of a word),, address the potential of falling ad revenues as a result of ad skipping. As I said in my last post, the following things are true:

  • Consumers are gaining more control over how and when they use their media
  • The problem lies with the lack of relevancy of the ads to the individual, thus they have little content or entertainment value to the consumer.

Mechanically disabling features that allow for greater consumer control will only serve to drive them to other alternatives that do allow this control. Once the consumer has tasted the freedom of control over their media, they’ll never give it up. The TV industry better be careful of a major back-fire here or stand to lose in a big way.

To the TV Industry: Get better at Contextuality or in other words, getting the right ad to the right person at the right time. Then you give the advertisers a reason to continue spending an insane amount of money with you.

-Andy

DVR Users Skipping Ads???

In an article from MediaPost.com, entitled Jupiter Calculates Cost Of Ad-Skipping: $8 Billion This Year , the statement is made that 53% of DVR users skip ads and they calculate the cost of this at $8 billion/year. What’s their solution? To make it where DVR users can’t skip ads!!

This industry needs to come to the realization of why people choose to skip ads. By-the-way, they’ve always had the ability and choice to do this, either by flipping channels or leaving the room during a commercial they didn’t want to see. (I wonder how much this has cost the ad industry over the years!) DVRs just make this process a little more time-efficient. The REAL reasons they skip the ads are that the ads are not relevant or entertaining. See my earlier blog posts We Can Do It Better and The Value of Advertising where I talk about the entertainment and content value of ads.

The industry needs to understand and embrace the fact that consumers are gaining more control over their media (what they watch, when they watch it, and how they watch it). The answers lie in good targeting, well done ads and good and timely analytics.

-Andy

Good Morning Silicon Valley Comment

I’m a fan of the blog Good Morning Silicon Valley . Has some pretty funny posts and when you weed past the sarcasm, some good insights.

I like the title of the post “Finally, a way to reach female, left-handed bowlers interested in major appliances”. I like the quote: “Google responded with the truism that narrowly targeted ads don’t reach as many people.” Same song the networks have been singing which accounts for all of the advertising noise out there.

There’s a better way and that is to get the right ad to the right person!

-Andy

Going Off Portal

Will mobile content go the way of the Internet? That is, will it be open and freely distributed directly to the user or will it be channeled through the portals or “walled gardens” of the carriers? In an article called Clash Over Content Delivery from CNet the writer talks about content owners wanting more direct access to their customers without having to pay an intermediary. The carriers, on the other hand have a great deal at stake and want to tap into a non-subcription base revenue source afforded through their control of content, search and advertising over mobile.

Remember when AOL, CompuServe and others drove you through their portals to access content on the Internet? Eventually the walls broke down and those needing access didn’t need the help of these portals. They were able to access content freely. Now the battle is happening again, but with mobile content. The carriers are making a play to control what content goes through their network. They give the ability to pull down news, music, ringtones, maps and various other applications. There is, however a world much bigger than those selections available through off-portal content providers. You may notice that Google is not a selection when I fire up my mobile web browser on my Sprint account. But, I can pull up Google if I select “Go to URL” and type in Google.com. In this case, Google is off-portal for Sprint. Now, imagine all of the other mobile enabled sites and content that can be accessed in this manner.

One way these off-portal content providers are reaching their customers is through the use of shortcodes – a 5 digit code that is sent via text messaging. A return text message is delivered to the phone with links and instructions. Content providers are using other means of advertising to publicize these codes and encourage people to interact. Generally, they are offering something in return for a visit, like a chance to win money or free food. Some content providers are even pushing text messages in bulk to phones with these codes. Those who use mobile text messaging frequently are seeing these pop up.

Interesting links on this subject:

My interest regards advertising over mobile and the struggles and delays I’m seeing from the major carriers in implementing any reasonable form of addressable advertising. Can the off-portal trend be effectively tapped to deliver ads and promotions to the advertiser’s desired audience?

-Andy

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