Where will we be in 5 years? This is a question often asked but who really knows where they will be years down the line? What we do know is what media tactics are trending up or down, and what new opportunities will likely takeover the advertising industry.
Television is an important advertising medium and we do not see this changing in the next 5 years, but the methods we use to advertise through TV may be altered. TV consumers are not watching as much “live” TV and are in fact utilizing OnDemand features and Personal Video Recorders. In 2014, the average U.S consumer watched 3.6 hours of Over-the-top content per week. Over-the-top (OTT) content is any app or service that provides a product over the internet and bypasses traditional distribution. The below chart illustrates how this feature will take over U.S. households throughout this decade.
TV advertising over-the-top services could represent about half of all TV advertising in five years. Plano, Texas-based Diffusion Group says that by 2020, OTT TV ad revenue will be approximately $40 billion. This is just under half of 2020’s projected $85 billion in total TV ad revenue. (MediaPost. 4/10/2015)
Cisco Systems states that Cable companies and broadcasters are starting to make significant changes to reach audiences more effectively, including replacing old systems with more efficient and effective Internet-based systems, and allowing for more interactivity and increased ability for customers to choose what they watch and how they experience content. So how will television advertising change?
First, channels will go away. While I do not suggest that all distribution will be through OnDemand technologies, in the future, consumers will not think about channels as the means of accessing programming, and in fact channel searching will be viewed as frustrating. Brands and networks will no longer be able to ensure that ads placed in specific episodes will have sufficient audience reach. This behavioral shift will force advertisers to focus on new forms of addressable advertising. Since ads will have to be delivered to OnDemand viewers in real time on their PVRs at various time intervals, this will drive the need for addressable ads. Buying will increasingly include purchases of specific audience segments across shows.
Addressability not only will become common, but will evolve from targeting an entire segment with one piece of advertising creative to further segmenting the audience and serving differentiated pieces of advertising creative based on the audience’s characteristics. This personalization will manifest itself in different advertising spots appearing for different users, and in tailored product placement. Not only will one viewer see a different car, in a different color, they will also hear a different dialogue and possibly see a different scene.
Ad personalization will allow the consumer to be involved and will take many different forms. Brands will increasingly integrate with new types of apps associated with popular TV and movie characters. We will see new forms of marketing where apps currently positioned as extensions to the storyline will provide in-context advice by the show’s characters. For example, in an extension of current consumer and industry trends, viewers may “friend” their favorite TV characters or investigate plot twists using resources in their own communities.
Brands will explore many senses in addition to audio and visual. Smell and even taste will be used in advertising. With the production of 3D printers, we will be able to print a model of a new car while tactile feedback will allow us to experience driving it on a mountain road, or the gust of a sea breeze at the beach on a warm summer day. In a survey conducted by Cisco Systems, “90 percent of respondents agreed with this prediction; of those, 44 percent thought adoption would take longer than for certain other advances.”
While total video consumption will not change drastically, the vehicles used to consume said videos will. Consumers will gradually shift from watching live programming through their television provider, to using their personal video recorders or personal video streamers to watch content on their own time with no restrictions. Video streams will often be provided in 3D and will be enhanced with interactive elements. With that said, purchasing traditional television spots will not guarantee viewership, and advertisers will need to find unique ways to adjust to the market.