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Jul 21, 2008

TV is Still the Best Way to Address Ads to Audiences, but Choices are Expanding

TV advertising is being impacted by the Internet and by mobile services that provide highly personalized content delivery, reports In-Stat (http://www.in-stat.com). No longer does "one ad fit all" viewers and the one big trend is for all advertising to become more relevant to the people who see it, the high-tech market research firm says. New technology promises to do that via Set Top Box, PC and mobile device addressability.

Advertising buyers understand the current complex nature of the US media delivery industry, and it will take them time, effort, and education to learn how to adapt what they already do to the new hardware-based opportunities that seem so promising. Customer-specific advertising that targets identifiable ethnic, cultural, language, or special interest audiences will see above-average growth rates through 2012. Geographic and Hardware-based advertising from Cable TV operators will surge forward beginning in 2010.

But there's more to the story. People in the online and mobile industries lack an understanding of how traditional TV works. A recent In-Stat report walks step-by-step through today's TV advertising delivery market, pointing out areas that overlap or duplicate, as well as showing that many delivery networks also provide exclusive content. TV advertising is very complicated, and the incumbent TV program services will continue to control how advertising dollars are spent.

The report found the following:

  • Traditional TV advertising that is attached to popular content is still the best way to obtain repeatable audiences during the flight of an ad campaign.
  • Specialized program services focused on ethnicity, language, sports and communities will continue to increase the number of customer-based TV advertising outlets.
  • Geographic-Based Addressable Advertising will see the fastest growth.
  • Hardware-Based Addressable Advertising will dramatically expand during 2010.
  • Hardware-Based Addressable Advertising solutions already exist on the Internet, and solutions based on Set Top Box addressability will be growing on a market-by-market basis as Cable TV and TelcoTV services implement emerging advertising insertion technologies in their headends. 
  • Key problems still to be solved include transcoding, metadata definitions, media management, and creating integrated selling and purchasing solutions that work across all the possible delivery platforms.
  • Companies to watch include MediaBank, DG FastChannel, and Run Digital Media.

The research, "US Addressable TV Advertising" (#IN0803963MBI), covers the US market for Addressable TV advertising via traditional and new technologies. It includes analysis of the means broadcasters can employ to provide addressable TV advertising. It also analyzes the strategies broadcasters and advertisers can use to reach highly targeted groups of consumers. Forecasts of US addressable advertising by category through 2012 are included.

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