TV advertising, as it is right now, will become a tough sell in the future but it also opens opportunities for new approaches and technologies. In order to speak about the future of TV advertising, let’s look at it’s past first.
The advertising industry has many similarities to the sophomoric oil industry: it's hardly innovative, new technologies and ideas are being created by third parties, it’s outdated and soon to be replaced by something better and fresher but it’s arrogance is holding it back. In order to survive in the future, the advertising industry will need to grow some balls and try some new things (I could say this about the oil industry, too, but who likes oily balls?).
Soon to be retired
The current state of TV advertising is the equivalent of a distant and annoying relative who constantly interrupts everyone during family gatherings by telling jokes that nobody finds funny. The future is that same relative in a retirement home where he (or she) will be telling jokes to an audience that is hard of hearing.
In it's latest report, the British marketing and advertising platform eMarketer predicts that although TV advertising spend will increase in the near-term (TV ad spend will total 35.8% of total media ad spending), digital ad spend will surpass its TV counterpart in 2017 (digital will total 38.4% of total ad spending).
And I believe, rightly so. Taking myself as an example, I can't stand the disruptive advertising practices of today's TV stations. The amount of nonsense, repetitive commercials that are not aligned with any of my interests drive me to paid TV channels like Netflix & Co. We are all becoming very spoiled by digital ads and expect the same level of relevant ads to be shown to us on TV as well.
The king is dead long lives the king
However... advertisers, have no fear! New solutions are being built as we speak and old revenue sources could still shine in new clothes. During last years 5th Transatlantic Entrepreneur Program event organized by New York International at Work Better's beautiful Park Avenue South location, I had the chance to speak to Mario Ahlers-Ullmann, Head of Business Development and Strategic Partnerships at dailyme TV. Dailyme TV is an innovative German video streaming service that allows their customers to watch their favorite shows with very limited commercial interruptions on practically any device - even without an internet connection.
Asked about the challenges advertisers will face in the near future, Mario said that "advertising needs to adapt to the behavior of the customers and viewers. New, creative ways are necessary to keep the viewers interested and entertained rather then interrupting the experience constantly. Consumers know that they are agreeing to a compromise when getting a service for free or for a low price. But this compromise must be fair for both sides".
Dailyme TV supports this understanding of customer satisfaction by offering very short commercial breaks (one 30 second clip) only once during a regular TV show. Although this is consumer friendly, it's nothing new. YouTube built it’s entire revenue system on exactly the same strategy. Much more interesting is the approach of offering individual branded channels to brand marketers. Alba Berlin, Berlin’s own basketball team, has it’s own channel on dailyme TV and offers branded content next to live game streams. A branded experience by itself is still an advertisement/ commercial - but it's delivered in a much more enjoyable and less intrusive way.
To new shores
"The next evolution of video is not resolution". An important statement that precisely highlights the need for innovative new ways when thinking about the future of TV advertising. These words are not my own. The statement comes directly from Kyle Heller, co-founder of Cinematique, a cutting-edge technology company that is about to drastically change the way we experience online video.
Cinematique’s technology turns every video clip into a touchable/ clickable experience that allowing viewers to interact with the content directly as they see it. Obviously, the opportunities are endless and the platform presents a fastest path from viewing to purchasing or learning more. But purchasing items off the screen is just the tip of the iceberg. Think about the endless layers of additional information and side stories that now can be packed into one TV show, movie or music clip - product and story placement on steroids.
Wake up and get into the know
Imagine a combination of branded entertainment stations with interactive footage - there would be no need for additional interruptive commercials anymore. All we as consumers ask for is great entertainment, information when we ask for it, and an industry that actually listens to us and understands what we want.
Advertisers are well advised to leave their comfort zone and start exploring new ways of delivering brand messaging to the consumer. Technology does not wait for anyone and the future of TV advertising is definitely digital.
Jan Roessner is co-founder SAGENCY, a digital marketing agency with offices in Berlin and New York. Opinions are his own and no one else should be punished for them.