Earlier this month, The Wall Street Journal featured an article on addressable TV advertising. This development has been eagerly awaited by advertisers for many years but it has been frustrated by the tremendous fragmentation in the infrastructure of TV delivery with its myriad varieties of delivery (satellite, broadcast, cable) and multiple generations of set top boxes with widely varying technologies that have to be reconciled.
Companies such as Visible World, which was prominently featured in the WSJ article, have been struggling with these challenges for almost 10 years and are finally getting traction. Others such as Simulmedia, also featured in the article, are relative newcomers who seem poised to reap the benefits of this technology.
For more than a decade now, direct and interactive media have offered much more sophisticated targeting capabilities to marketers, albeit without the broad reach of television audiences which, however, have become increasingly fragmented. These advances bring TV media a lot closer to the state of the art when it comes to tracking customer viewing habits and targeting them based on likely interest in specific products and services, i.e. a great deal closer to how this is done online. For companies such as ours that have been doing this online for some time this opens up exciting possibilities.
However, considerable challenges will persist. To the extent that Televisons are communal, the targeting will often miss the spot, although it will still be an improvement over the current scatter shot model. Of course, mobile and online channels offer ever richer targeting options given the richness of locational targeting and the true personalization that is possible in these channels. Over the top video distributors such as Hulu now allow viewers to pick the ad they want to see, the ultimate in personalization and choice while offering the same powerful visual experience of broadcast TV.
So even as TV catches up, the competition will be running even faster and offering even better options. These developments may slow the decline of TV advertising revenues but will probably not cause it to grow faster than other forms of targeted advertising. TV advertising will, however, continue to grab the major share of advertising revenues for many years to come just as they have for the past half century.