Tuesday, June 11, 2013

Television Advertising Is From Mars And Internet TV Ads Are From Venus

As new figures come out showing that online video has barely captured 3% of TV ad budgets, everyone is asking 'why' ?

Well, why not ?

First of all you have the godawful stats of the adtech behind internet TV ad delivery, providing ads that constantly buffer since no one seems to care about the customer experience: in the UK ITV and Channel 4's online offerings are unwatchable for this reason.

Then there's the little matter of the majority of inventory being found on non-ad properties like the BBC (in the UK), Amazon Prime and Netflix.

Then take out Google and YouTube since they operate a black box.

Consider that most of the US networks have refused to cannabalise themselves and are only now beginning to follow European broadcasters with a 'TV everywhere' strategy.

Then there are factors such as incumbency, the power of the status quo and the ability of the TV sales execs and you start to get surprised that the market has already reached $2.3bn in the US and is slated to get to $5.9bn by 2017 by PwC. (Compare that to the $81.6bn US TV ad market). The same thing happened when online advertising first appeared, budgets started to be carved out of traditional media, but it took a good decade to get to parity with delivery.

But I think there's a bigger underlying reason for the current disparity. It's just too difficult to compare the behavioural world of interent ads with the brand building world of TV ads. The same thing is now happening in online TV advertising, which is its own medium in many ways and needs to find its own way with better adtech and delivery, more original usage and a reconcilliation of its brand building role in a CPC market.