Fresh back from holiday this morning and full of the joys of spring following a great Chelsea victory last night my day started well when I read in the FT this morning that (as usual no link due to DRM restrictions):
“The US television industry is preparing for a big shift in its relationship with advertisers as it allows them to see for the first time whether viewers are actually watching the commercials on which $70bn is spent annually”
Phenomenal. Fancy not providing your customers with the data they need to assess the quality of your product.
This shows just how far the TV ad world has got to go to catch up with the service that internet companies provide to their advertisers. It seems the TV companies have had it too good for too long.
Trackability and transparency are central to all forms of internet advertising, and over half of online ad budgets (in the UK at least) are only paid out if there is some action from a consumer that shows she has read the ad and is interested in it. That action is typically a click through on the ad, but is increasingly often a purchase on the advertiser’s website. These qualities help explain why the internet advertising sector is growing so fast and will continue to grow into the future.
It is great news for all of us who are active in this sector that the traditional TV world isn’t responding well to the threat that the internet poses to its advertising budgets.
I suspect that the reason for the slow response is a fear that the data on whether viewers are actually watching ads (instead of, for example, fast forwarding through them) will bring more bad news than good TV companies. Advertisers are now demanding this data and if I am right when they get it they may increase the rate at which they are moving their budgets onto the internet.