The Coming TV Digitalization

I have been in advertising for some time now, having built several adserver, run Miva, Overture, and Adsense side by side, managed Adwords campaigns, DFP installations, and Flycast, Tribal Fusion, Tradedoubler and other systems for my own sites. I have maintained for years that the CPM is dead and continue to so. It’s pretty simple, what gets measured, gets done. If you can measure it you will. And with digital you can measure everything and for the advertiser the value is never with the Display of an ad. Even in TV Branding campaigns, the value is calculated by running around and asking people in brand awareness polls and the like.

Don’t get me wrong, CPM bookings will continue, it’s just that they are booked based on knowledge of what happens afterwards. You can take the entire realtime bidding revolution as an example that CPM is here to stay, but it really just means that the sell side takes CPM bids because it is easier and the demand side has to find ways to confirm those CPMs as having the right value behind them. The first players are appearing that are fully conversion driven on the DSP side and do not require CPM bids. These are the new arbitrage players.

But I want to talk about TV because that is where the next revolution is coming from. You already have Samsung building up a platform called AdHub, as well as Google. With AdHub it all starts with Tablets and Mobile phones, already called The Second Screen as many people are looking at these devices while watching TV. But later this year a new SDK is supposed to come out to run Ads on TVs that have an IP Channel coming in. Of course there will be legal battles in terms of matching Ads to running TV shows, a method that the TV companies will complain about for sure. But more and more is watched digitally, and this will be the first step.

This will bring the performance focus to TV. It actually already exists with lots TV companies doing media for equity deals with startups. They pay a low fixed fee, a certain amount per user the acquire and a part in equity. Smart move by the TV companies because TV still does deliver. The push capabilities are just immense.

Google is also going strong into the field adding new partners to the TV network that includes DIRECTV and others.

And just imagine, when people start to log in to their Gmail on their TV and you can have real cookie matching over several devices. Together with the cookie matching in the RTB market, it means you will be able to run Retargeting campaigns on TV and register sales on a tablet. Technology is already out there to find products realtime in videos and what if you can change those in the video then. What about you seeing the shoe you looked at yesterday in the next Friends rerun? What about them talking about the bank you visited yesterday, or simply tuning the ads to your locality and demographic.

True intregrated advertising and the possibility to have it all in one real time bidding interface. Imagine having one pipe, where you can run a TV commercial and bid on that in conjunction with showing the same ad on the table that the user currently has open in front of the TV.

Yes, there will be privacy issues, and yes, there are still hurdles to take, but why do you think Google is going full force into mobile, tablets and TV? It is all coming. It is not a question of if it is coming, just when.

The RTB market is here to stay and expanding rapidly, even Facebook is going there to revive it’s own adplatform and open it up to outside data. Oh and they are also a big video player and with OpenRTB, the main standard being RTB, it is possibly to bid on multiple spots at the same time, e.g. only take the pre-roll if you also get the display ad on top and the medium rectangle on the side. This will be interesting.

Gartner recently put out a report that said that the CMO will spend more on IT than the CIO in the future, just because advertising is becoming a big data and speed game on all fronts. Intermediaries will die, but very big companies will be born at the same time but they will take real investment to be born.

Interesting market and interesting times. Looking forward to the next 10 years.

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One thought on “The Coming TV Digitalization

  1. Matt August 19, 2012 at 17:44 Reply

    Great post – exciting times indeed, but possible nerve-wracking for those not prepared to keep up.

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