Signs of promise, but are reports of TV advertising’s death greatly exaggerated or not?
Near the end of the masterpiece manqué that is “Touch of Evil”, Orson Welles’ character pays a final visit to an old friend, a gypsy played by Marlene Dietrich. Usually a dab hand at fortune telling, the woman looks at the fallen detective dejectedly, and with pity tells him that his time is over, the world has moved on. What with the release of Google TV, as well as the newest incarnation of Apple TV, the industry could certainly said to be volatile. Reuters have an excellent primer on what both behemoth’s machines actually do, here. This will surely only divert eyeballs away from advertising. Why watch a commercial when I can easily watch other media from the Internet before Pop Idol returns from its break, as is possible with Google TV? Why watch broadcast television at all when all the films, music and photos I want are streamed from my computer’s iTunes via Apple TV?
Furthermore, increasing DVR penetration can also do nothing but dent the impact of above-the-line advertising. In an article in Variety by Brian Lowry a few weeks ago, the journalist commented that digital video recorders were now in 38% of US homes. “To which many will doubtless say, ‘Only 38%? But everyone I know has one!’”. As Lowry points out, this delayed and fast-forwarded viewing has led Nielsen to create special designations, such as ‘Live+7′, to allow for the different impact of viewing an ad after its original airtime, as commented on by The New York Times recently. More importantly however, the rise of the DVR – from only 1% penetration less than five years ago – “points to a shift that threatens to hasten the separation of haves from have-nots”. Augmentation of these platforms will, Lowry writes, cause a fracture between those doomed to watch commercials, and those suitably kitted-out to avoid them. In particular, the problem for advertisers, and hence the networks they support, is that those people that own DVRs tend to make up a more desirable part of the population, which 30-second spots will no longer reach.
“[W]eaving messages into programming will become even more of an imperative… Taken to its logical extreme, advertisers peddling big-ticket items will have to think twice about whather 30-second spots are an efficient use of marketing budgets. The companies still relying on TV… will be the ones pushing inexpensive products[.]“
So it would seem the structure of television as we know it is an endangered species, soon to shuffle off the coil. William Gibson once wrote that the future exists already, it’s just not well-distributed. Surely this is the case here, and what we are glimpsing at the fringes with uptake of new platforms for viewing multiple media serving as a looking-glass into what will be the widespread norm in the coming years. Yet despite these new technologies, and the continued rise of all things digital, a front page article in Variety at the beginning of the month noted,
Advertisers appear to be returning to TV again, with automakers, especially, shelling out more coin… In fact, the major broadcast and cable networks were cheered at the start of the summer by a better-than expected upfront advertising sales market.
Indeed, The Economist reported last week that, with the recovery of the ad market, the two clear winners are the Internet, and, yes, television. The article states that at the end of last year spending on British TV was predicted to fall by 0.2%. It is now forecast to grow 11.6%. The previously moribund ITV has seen advertising revenues shoot up by 18% in the first half of this year. And while disruptive technologies may eventually take hold, the fact remains that people are watching more and more TV; 158 hours a month in America, two hours more than last year. Markets less mature that the US or UK have not yet faced the technological developments that await. “30% of Chinese regularly use the internet, whereas 93% watch TV”.
The article doesn’t address the fact that this is likely to change though, and importantly it’s likely to change a lot more quickly than it has done in the West. Moreover, the articles states that “search engines and online banners… do not offer emotional experiences.” But this is not all that the internet offers as far as branded experiences go. To see some great examples of work done to promote this past summer’s onslaught of films, click here. But the thoughts of The Economist clearly are the prevailing philosophy at the moment. According to an article in the FT last week, online advertising “increased by 10% in the first half of the year, but has fallen behind that of television and other traditional media for the first time.” Cinema also gained 12% and outdoor was up 16%. Press continued it’s slow decline. The thinking is that in the midst of still-prevalent economic uncertainty, advertisers are flocking back to a medium that they trust. For how long this trust will hold is a question that few in the world of above-the-line and TV networks will want to answer.