To put the evolution of TV advertising in perspective, you have to look at the current evolution of TV content as it converges with the Internet.
As it stands, there are seven dynamics driving the transformation of television that fall into three buckets: content delivery, advertising, and viewer engagement.
TV Accessible Anywhere at Anytime
In the TV content delivery bucket there are three dynamics: the ability of reaching across screens, Internet streaming, and distribution through the cloud. These three dynamics comprise the concept TV Everywhere, the ability to access televised content from distributors over the Internet at anytime with any device. The Adobe Digital Index from Q3 2015 shows the consumption of TV Everywhere grew 102 percent year-over-year across all devices, up 37 percent from Q2. Only one in seven households subscribes to TV Everywhere content, allowing a huge opportunity for growth. Adobe also found that 23 percent of TV Everywhere is now consumed on TV-connected devices, like Apple TV and Roku, representing mainstream adoption with a 130 percent increase watching at home.
Automated and Targeted TV Advertising
TV advertising is a huge, expanding business. Spending is expected to reach almost $84 million by 2018. Combine that with the blurring of lines between TV programming and Internet content, we come to the advertising bucket and its three dynamics: measurement, programmatic ad technology, and addressable advertising. Unlike traditional broadcast TV in which all viewers in a region see the same commercial content during a particular show, Internet TV allows for targeted ads based on the individual viewer.
Programmatic advertising is advantageous as it automates the process of buying TV spots on the fly targeted to individual viewers who meet the advertiser’s conditions. The TV viewers will see an ad based on their behavior and interests, such as TV show selection and Internet browsing, even specific to their viewing device and geographic location. The real-time nature of programmatic advertising can provide specific data on audience demographics and ad views enabling advertisers to create targeted ads that address pockets of viewers. Advertisers benefit by avoiding the over and under-buying of ad space based on estimated viewership as used in traditional broadcast television.
DoubleClick’s third bucket is viewer engagement. Since programmatic advertising can help direct ads to targeted viewers using individual factors like geography, seasonal weather, and existing customers versus non-customers, advertisers can make use of the Internet’s two-way communication abilities in this context. For instance, an ad can contain a call to action leading viewers to an e-commerce platform to complete a purchase. A 30-second ad can contain a click-thru option to view a long-form ad or a website to explore the offering in-depth. In early 2015, the Disney Destination Channel 24/7 asked viewers if they would like a call from a travel specialist, 23 percent of the respondents ended up booking a vacation.
Thanks to these rapidly emerging and evolving technologies, we have entered a new frontier in televised advertising. The key to success for all ad sales teams is to resist the one-way communication mindset of traditional broadcast advertising. Those days are forever behind us.