Two Years Before a Cable TV Flop
Posted on July 19, 2011
Last week the Canoe Ventures CEO announced he would depart in August after completing a three year employment agreement. However, as a business concern, Canoe “barely left the dock”.
Canoe Ventures was organized and funded with $150 million three years ago by a consortium of six cable operators. Its mission was to develop interactive TV advertising for the CATV industry. To date it has launched only a single product meeting with little success.
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Inside Digital Media subscribers may recall our two year old post entitled “Why Project Canoe Will Fail”.
Among other points we explained, “…video advertising will evolve more quickly on the Internet than within closed networks of CATV systems. Technical standards on the Net are open and well understood by independent developers. Thus it is likely more of them will focus on Internet advertising innovations than on those governed by Project Canoe where standards have yet to be defined.”
As we explained in a March post, the faster innovative pace became evident when Shazam demonstrated how to use embedded signaling and Internet access to provide interactivity to conventional televisions via smartphones. Three months later Kleiner-Perkins apparently reached the same conclusion and invested $32 million to launch Shazam into the interactive TV advertising business.
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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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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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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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How the TV Industry Can Combat DVRs
Posted on March 24, 2011
During the past dozen years the percentage of American households with DVRs increased from zero to forty percent. Viewers became increasingly accustomed to skipping commercials and viewing shows on their own timetables as opposed to broadcast schedules. The growth intensifies apprehension among sponsors that TV advertising is losing effectiveness. While to date industry efforts to combat the trend have been unproductive, recent developments suggest the tendency can be mitigated, and even reversed. When combined with better ad targeting and commercials permitting viewers to segue into spontaneous online merchandise purchases, the TV industry could advance to a new era of prosperity.
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The “trick” is to transform scripted shows into realtime events. As the chief executive of CBS noted last month, “Every major (live) event over the last year – Academy Awards, Grammy’s, etcetera – did exceedingly better than the previous year.” While live performances such as athletic contests and awards ceremonies are classic examples of events, it’s increasingly feasible to convert scripted programs into realtime shared experiences as well. The key is to involve audience members in silent chatter over social networks as they watch the TV shows at scheduled broadcast times. The two most important of such networks are Facebook and Twitter. Although viewers may actually be alone, they get a sense of congregating in the living room, watching the show together. 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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Three Radical Predictions
Posted on September 27, 2010
First, consumers will demand unlimited Internet access at their TVs.
Second, sponsors will refuse to pay for video ads and TV commercials that don’t get watched.
Third, ad hoc WiFi networks will provide cellular bypass and become crucial advertising properties for local merchants.
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Internet &TV
Most experts mistakenly believe consumers will want Internet access on their TVs mainly to choose among popular movies and TV shows. That’s what Apple surveys conclude and traditional media executives find it convenient to agree. However, such results ignore that the vast majority of survey respondents haven’t experienced unrestricted Internet TV access. Therefore they do not yet fully appreciate what other activities and programs might interest them. Read more…
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GroupOn’s Manifest Destiny
Posted on September 13, 2010
GroupOn’s breath-taking success implies a Manifest Destiny reminiscent of the early dot-com era. It will not only change the way local businesses use the Net to get new customers and sales, but it will likely forever change video advertising.
The company made two crucial discoveries about meeting client needs that previously eluded others addressing their market. Furthermore, they’re currently discovering how to fulfill the promise for two types of Internet advertising that to date failed to live up to potential.
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First, GroupOn enables clients to rapidly generate new sales and customers via the Internet. Read more…
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