Many of our conversations have focused on the growing importance of social media in your marketing strategy, which is at least partly a function of difficulties reaching consumers through traditional media outlets like television. Highlighting this, a recent report predicts television advertising will decline to $13.1 million from a high of almost $58 million in 2008.
Not only are changes happening to advertising on TV, but television viewing is fundamentally different than it was before and today’s children will not be making the same television consumption decisions as we have.
Back channel media
Back channel media makes television “clickable”. This is real Jetson’s stuff here. The way it works is that programmers or advertisers insert icons into their shows or commercials. Consumers use a special remote control to select icons as they watch television using a box with special software. Consumers then select an icon to get more information about a company’s products and services, distribution outlets, pricing, etc. Consumers can also get more information on the actors, director, or location where the content was filmed. Consumers can also order the product or arrange for a download of music, movies and software by selecting the link. Virtually anything could be made “clickable”.
Moreover, consumers could engage in these “clickable moments” without interrupting their television viewing. They would simply return to a customized website created to gather information or create shopping carts based on selected icons. Backchannelmedia is already being tested in several markets through enhanced cable boxes.
Targeted television advertising
Some of the major cable companies, such as Comcast, Cox, and others banded together to offer advertisers targeted viewers — called addressable advertising. Addressable advertising offers firms something they’ve only dreamed of — the possibility of selecting television viewers based on geography, ethnicity, income, etc, so advertisers can selectively reach only their targetmarket with their advertising message. No longer will advertisers have to settle for advertising on specialized cable channels to reach their target market; they can advertise on networks like ABC, CBS, NBC or virtually any channel and only pay for the target market they want to reach rather than paying to reach the entire viewership of the program.
More consumers are watching television on their computers.
Not only does online television viewing mean fewer eyeballs watching traditional television, with its more pervasive advertising, but it means changes affecting the television industry. Online television requires new business models for the television industry to maintain profitability. Online television viewing means consumers are watching what they want, when they want rather than on a schedule established by the networks. They’re also likely watching alone and commonly are multitasking by working, reading, chatting online, checking up on their social networks, or surfing the internet while watching television. This further fragments a market already very fragmented by the number of channels of programming available.
Advertisers need to develop new ways to monetize online television viewing, since consumers are very dissatisfied with current advertising that breaks into their program or runs along the bottom of their program. While they also hate traditional television advertising, there are early indications that online advertising will lead to more negative behaviors.
Cable providers also need to think about what their value-added is to a consumer who WANTS to watch television online. Do they really need someone to bring them programming? Probably NOT. So cable companies need to think about how to replace the income from all these future consumers who will choose not to subscribe to a cable service.