Proverb of the Lions and Hyenas
Posted on October 16, 2012
Over three years ago Inside Digital Media predicted television advertisers would eventually insist they only be required to pay for ads that get watched. Thinking the Unthinkable About Video Ads reasoned that Google’s pay-per-click set a new paradigm that was ultimately going to encompass nearly all types of electronic advertising, including video. Yet television industry incumbents greeted our forecast as though it had all the credibility of an imminent second coming prophecy.
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Last week YouTube’s head of Global Content proclaimed the company does very well with skippable ads. Robert Kyncl added, “…our skippable ads in the U.S…are now making as much revenue per hour as ads on cable TV.” Advertisers don’t mind paying more when they know consumers have declined to skip the ad. Read more…
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Two Years Before Madison Avenue
Posted on June 28, 2011
Earlier this month a GigaOm analyst interviewed two advertising industry experts and inferred that future TV ads will be bought more like online ads. Specifically he concluded that “TV ads will increasingly become performance-based” and that viewer behavior and intent will trump conventionally accepted demographic statistics. His experts were from a prominent media agency named Initiative.
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Inside Digital Media subscribers got the same message about two years earlier. The superiority of “Behavioral Ad Targeting” was the subject of a podcast in July, 2009. It was followed two months later by our “Thinking the Unthinkable about Video Ads” that explained how accountability and behavioral targeting must ultimately apply to video ads. As we’ve repeatedly explained, Google’s search advertising is conditioning sponsors to a standard in which they only get charged for ads that viewers actually use. It’s only a matter of time before advertisers demand that video ads and TV commercials conform to the new paradigm.
What do we predict next?
First, once TV commercials become performance-based, ad agencies will learn to earn addition revenue by creating commercials that segue into online transactions.
Second, smartphones and tablet computers shall become the ubiquitous tools enabling consumers to interact with such TV commercials and thereby purchase merchandise impulsively online.
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Also, inspect our eBooks including the first half of “Third Generation Television” which is offered at no charge. Our latest analysis, “Television Band White Spaces” is available through The Diffusion Group.
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Three Years Before Blackberry Collapse
Posted on June 27, 2011
Almost three years ago (August, 2008) Inside Digital Media released a video podcast entitled “RIP for RIM Blackberry and the Radio Industry?” Three smartphone and radio industry experts were interviewed. Inside Digital Media concluded both the Blackberry and radio broadcasting would thereafter be challenged with technological obsolescence by launch of iPhone apps the preceding month. In short, we recognized Apple’s App Store as the “game changer” it later proved to be.
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Since the podcast Research-in-Motion stock has dropped almost 80% from $130 per share to about $29. Similarly, privately-owned Clear Channel Communication which is the largest radio broadcaster is struggling financially. While Clear Channel’s problems partly result from a mountain of debt, they also reflect a perilously weak recovery in advertising revenues. The weakness is not merely cyclical, but instead reflects a secular decline much like trends earlier impacting newspapers and record labels.
To subscribe to our podcasts at no charge, click here.
Also, inspect our eBooks including the first half of “Third Generation Television” which is offered at no charge. Our latest analysis, “Television Band White Spaces” is available through The Diffusion Group.
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Three Months Before Kleiner Perkins
Posted on June 24, 2011
Earlier this week esteemed venture investors Kleiner-Perkins and Institutional Ventures participated in a $32 million financing for Shazam to fund development of a form of interactive television advertising based upon the company’s music recognition technology. Our March 4, 2011 Interactive TV Commercials Arrive detailed how Shazam pioneered the idea in an TV commercial with Old Navy.
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Specifically, Old Navy created this short music video to run as a TV commercial. Smartphone users activating Shazam while the track is playing, not only identify the song, but also get directed to pages at the Old Navy website where they can inspect merchandise. Hypothetically, they could also be provided with a time-sensitive discount coupon enabling them to impulsively buy clothing online without leaving their homes. The process works with conventional televisions whether broadcast, cable, or satellite.
Moreover, in a later post we explained that similar techniques utilizing digital watermarks could enable viewers to purchase merchandise representing “product placements” that are integral parts of the storyline in scripted TV shows. The method likewise works with conventional TV-sets and app-enabled smartphones or tablet computers.
Finally, we concluded that a variety of content identification technologies will ultimately result in a future in which All Media Shall Become Interactive, whether it be print, audio, or video.
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All Media Shall Become Interactive
Posted on June 13, 2011
Today we interact with Internet media nearly as routinely we checked our wristwatches to read time-of-day fifteen years ago. While the conversion might seem radical to consumers from 1996, the advent of portable connected devices such as smartphones and tablet computers implies an even more fundamental change in the future. In short, all media shall become interactive – not just Internet media.
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The underlying force is a previously latent demand from sponsors for more effective advertising. As John Wanamaker put it about a century ago “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Yet during the past decade, Google AdWords introduced a new paradigm. The service generates more than $25 billion annually by only charging sponsors for ads that are actually used by the consumer. At Google, advertising is targetable, accountable, and can be convincingly tracked. It is only a matter of time before sponsors will demand the same of all their advertising campaigns in whatever medium, whenever possible.
Significantly, app-enabled mobile devices are empowering traditional media to adapt to such a transformation because the portable units are evolving into cognitive prosthetics. Much as experienced amputees routinely use mechanical prosthetics as artificial limb extensions, habitual smartphone and tablet owners are starting to use the devices as convenient intelligence aids. They help users gain more information that would otherwise be unavailable, or difficult to obtain. For example smartphones can find price comparisons merely by scanning bar codes and other implanted signals off shelf merchandise labels. Specifically, a price-comparison app reads the barcode or embedded signal to (1) identify the merchandise and (2) display a website where up-to-date prices for the item from all merchants are complied. Read more…
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Future of Television – Video Podcast
Posted on May 23, 2011
Today’s post is a video narration of our PowerPoint forecast of the Future of Television. Since it only takes eight minutes to watch it, we provide only a brief text summary.
Download video presentation here if you don’t want to watch the stream.
First, ultimately content migrates to the Internet where it is accessed via browser-centric or app-centric devices.
Second, the socket panel available on modern flat-panel TVs is the “Trojan Horse” that prompt’s the paradigm shift.
Third, the future TV remote control units are likely to be smart-phones and tablet computers using apps such as Peel.
Fourth, eventually sponsors will demand that they only pay for TV commercials that are actually watched. This is already starting on the Internet. However, since conventional TV already has digital watermarks embedded in the audio stream, it can also be implemented in regular television via smartphones and tablet computers. The key is to augment content identification with recognition of commercials that can be made interactive.
Fifth, consumers will eventually expect constant access to the Internet cloud thereby leading to the emergence of massive high-speed unlicensed wireless networks utilizing Wi-Fi and TV Band White Spaces.
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How Interactive TV Ads Will Become Standard
Posted on May 17, 2011
A little under two years ago, Inside Digital Media predicted that sponsors would ultimately demand they only pay for video ads that actually get watched. (Thinking the Unthinkable About Video Ads – September 18, 2009). We reasoned the success of the cost-per-action pricing of Google AdWords would force change. Since sponsors only pay Google when viewers “click on” AdWords text, they would ultimately apply such a cost-per-action standard to banner and video ads as well.
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Last week a YouTube executive provided confirmation at WPP Group’s Global Video Summit. WPP Group is a leading advertising and media management company. YouTube’s Product Manager for Video Monetization, Baljeet Singh, was a Summit guest where he forecast half of video ads by 2015 would be cost-per-view. He explained how it is starting on the Internet.
YouTube is offering “TrueView Video Ads” permitting viewers to choose the ads they want to watch. There are two options. In one, after the ad plays for five seconds, viewers get a choice to skip or watch the ad. The advertiser is not charged unless the viewer lets the ad play to completion, or for at least thirty seconds. A second option gives viewers a choice of ads to watch during regular commercial breaks. Sponsors are only charged when their ad is selected. Read more…
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Jeff Bewkes and the Sesquicentennial
Posted on February 3, 2011
There may appear to be no connection between Time-Warner boss Jeff Bewkes and the Sesquicentennial of the American Civil War, but they’re linked by false confidence in the status quo. Every time the press quotes Time-Warner’s “Content is King” mantra I am reminded of the failed Confederacy’s “King Cotton” diplomacy.
After 150 years we laugh at “King Cotton”, but the argument seemed plausible at the time. When the war began cotton accounted for 60% of United States exports. The American South represented 70% of the World’s production. Furthermore, shipments were almost certain to increase for years because cotton was rapidly becoming the essential fabric for garments in the civilized world.
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Initially the Confederate government attempted to induce European recognition with a voluntary cotton embargo. Later the Union blockade cut exports even more sharply. Consequently cotton production increased in India, Egypt, and Argentina. As the South’s best customers turned to other suppliers, it was forced to trade with the enemy. New England textile mills sent agents south into Federal-controlled war zones to acquire – by whatever means – all the cotton they could get. Read more…
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