The TV advertising world is about to change. Dollars are going to shift to digital much faster than anyone thought just a few weeks ago. We’ve been touting mobile, digital and video all year, but when HBO decided to offer an “over the top” service not tied to a cable provider and CBS immediately followed suit the cat was out of the bag. Pretty soon most networks will have to offer themselves in the same manner, causing the great unbundling we’ve all been hoping for.
GigaOm tells why this had to happen:
- Netflix now has more than 37 million subscribers in the U.S., and those subscribers watch an average of 90 minutes of programming from the streaming service every single day.
- 47 percent of all U.S. households subscribe to Netflix, Amazon Prime Instant, Hulu, or a combination of these services.
- Among 18-24 year-olds, the numbers are even higher: 61 percent of them subscribe to at least one online video service, 49 percent subscribe to Netflix.
- 49 percent of all households have a TV connected to the internet.
- 34 percent of consumers watch online videos every day.
- Vizio’s CTO Matt McRae told me some time ago that his company is seeing indications of a tipping point, in which consumers are watching more online services than traditional TV during some weeks.
And this is what Ad Age thinks about the shift:
Digital advertising is about to be the only form of advertising, and over the next five years we’re going to finally see the promise of big data move us toward thinking about consumers and not pipes — about how to seduce and not interrupt. The implications for privacy are massive, and the future won’t come all at once, but we’re on an exciting path toward reimagining advertising based on what technology really means.
Consumers have been asking for this since the 90s, but broadband had to be sufficiently widespread. Will it be cheaper for the consumer? Probably not, because she will be paying for each separate channel, and it will probably add up to the same price as in a cable subscription. For example, if a user wants CBS, HBO, ESPN and CNN, costs can add up quickly. And for many people, because of the monopolies held by cable providers, the ISP is still the cable company, which will gradually be remembered as the company that used to deliver TV and now delivers broadband. Cable companies are facing big changes, but they’ve been preparing for those for years.
But for advertisers the change will be even more prominent. They will now have access to much more targeted audiences than they did through TV. In TV, media buyers bought a show that they were told appealed to a particular audience, and they weren’t really sure that audience was watching. There was no way to tell. But with mobile digital, because it has GPS and a load of other sensors that collect passive data, audience data could quickly become more granular. And the end result (this will not be immediate) will be the ability to buy individuals rather than just households or demographics. Channels will just be apps.
Another great advantage of digital video is that you can issue calls to action with mobile digital video that were only possible on TV through infomercials. And for local advertisers, mobile digital video is especially appropriate.
Agencies will have to adapt again, and more quickly than in the past. We can help; we’ve got great high impact formats for mobile digital video.