Advertising dollars shifting from traditional formats to addressable advertising

Ad budgets and consumer video viewing are shifting to the Internet, and emerging digital media platforms are threatening the traditional television advertising business. In 2010, 40% of ad or media agency buyers will shift 11 to 15% of total traditional or cable TV budgets to addressable advertising campaigns while 16% will move more than 20% of total TV ad budgets.

Register today for the webcast on March 25 and learn more about changes in the TV advertising industry.

Parks Associates hosting Advances in Television Advertising Webcast

Parks Associates is hosting a Advances in Television Advertising on Thursday, March 25th at 1 PM Central.

Major pay TV service providers have identified advanced TV advertising as a key revenue opportunity for 2010 and beyond. Ad budgets and consumer video viewing are shifting to the Internet, and emerging digital media platforms are threatening the traditional television advertising business. Even so, cable TV operators continue to ramp up their investment in advanced advertising solutions as a preemptive move to sustain ad revenues in the short term. In the long term, the investment serves to grow the advertising business segment.

This webcast features analysis and forecasts from Parks Associates examining the following questions:

- What key players and technologies will further industry growth?
- Will pay TV providers successfully integrate advanced TV advertising into their existing infrastructures?
- What is the main focus of Canoe Ventures?
- What are the existing and proposed business and pricing models?

For more information, visit
www.parksassociates.com/events/webcasts.htm

Coming to a TV Near You: Addressable TV Advertising?

I firmly believe once household-level addressability is available on a meaningful scale, advertisers and media agencies will quickly shift traditional broadcast and cable TV media budgets to the advanced advertising solution. This opinion comes from both a research and practical perspective (based on my current work and previous experience as a media planner/buyer).

And, yes, I remain bullish in spite of the technical and planning/buying challenges…but that’s a whole other discussion.

It’s a no brainer. If given a choice, why would an advertiser continue to buy a mass TV audience (albeit targeted based on Nielsen demographics) when they can address a specific TV audience who is more likely to purchase a product/service and less likely to avoid the commercial? More importantly, why would an advertiser turn down the opportunity to improve the cost efficiency of a TV advertising campaign?

I've been following Starcom MediaVest and Comcast's addressability trials. The findings of their second addressable TV trial include:
· Homes receiving addressable TV ads tuned away 32% less of the time than non-targeted TV households
· Addressable TV campaigns were 65% more cost efficient than traditional TV ad campaigns

These recent findings echo their 2006 addressability trial results, which found:
· Homes receiving addressable advertising tuned away 38% less of the time than non-addressable households
· Addressable TV campaigns were 56% more cost efficient than non-addressable TV ads


Our survey of top-level U.S. ad and media executives, Advertising Outlook: Shifting Dollars, found a majority would pay a premium for addressable TV ads, with almost 40% willing to pay upwards of 20% more over traditional TV ad costs.

While I take an optimistic position, do I think 2010 or even 2011 will be the year of household-level addressability? No, I don’t. At this time, key advanced TV advertising investors are still in the technology roll out and testing phase. However, once household-level addressability scales to at least one major digital TV service provider, I predict addressable TV ad dollars will instantly cannibalize traditional broadcast and cable TV ad expenditures.

Parks Associates forecasts advanced TV, mobile advertising, and social networking to lead long-term recovery in U.S. ad spending

Targeted and interactive TV advertising will lay the foundation for the long-term recovery of U.S. ad spending, while spending on broadcast network TV will return to pre-recession levels in 2010, leading the more immediate recovery, according to Advertising Outlook: Shifting Dollars.

This new report from international research firm Parks Associates features a survey of U.S. advertising and media executives and found this group optimistic about 2010 ad spending as well as the long-term impact of advanced advertising formats. A majority would pay a premium for addressable TV ads, with almost 40% willing to pay upwards of 20% more over traditional TV ads.

Addressable TV ads, defined as TV commercials delivered via set-top box to viewers targeted by demographic information, viewing interests, or geography, represent a small portion of current ad budgets but will command higher premiums as more digital TV service operators add addressability within their offerings.

Advertising Outlook: Shifting Dollars also found almost 60% of media decision makers expect spending increases in broadcast network TV in 2010 and over three-fourths expect a budget increase for social networking advertising. Spending on all major mobile advertising formats will likewise increase, with branded microsites, mobile video, and text messaging expected to reap the largest year-over-year percentage gains.

For the full press release, click here.