Television Advertisement - Future of TV Advertisements

Future of TV Advertisements

The introduction of digital video recorders (also known as digital television recorders or DTRs), such as TiVo, and services like Sky+, Dish Network and Astro MAX, which allow the recording of television programs onto a hard drive, also enabled viewers to fast-forward or automatically skip through advertisements of recorded programs.

There is speculation that television advertisements are threatened by digital video recorders as viewers choose not to watch them. However evidence from the UK shows that this is so far not the case. At the end of 2008 22 percent of UK households had a DTR. The majority of these households had Sky+ and data from these homes (collected via the SkyView panel of more than 33,000) shows that, once a household gets a DTR, they watch 17 percent more television. 82 percent of their viewing is to normal, linear, broadcast TV without fast-forwarding the ads. In the 18 percent of TV viewing that is time-shifted (i.e. not watched as live broadcast), viewers still watch 30 percent of the ads at normal speed. Overall, the extra viewing encouraged by owning a DTR results in viewers watching 2 percent more ads at normal speed than they did before the DTR was installed.

The SkyView evidence is reinforced by studies on actual DTR behaviour by the Broadcasters' Audience Research Board (BARB) and the London Business School.

Other forms of TV advertising include Product placement advertising in the TV shows themselves. For example, Extreme Makeover: Home Edition advertises Sears, Kenmore, and Home Depot by specifically using products from these companies, and some sports events like the Sprint Cup of NASCAR are named after sponsors, and of course, race cars are frequently covered in advertisements. Incidentally, many major sporting venues, in North America at least, are named for commercial companies, dating back as far as Wrigley Field. Television programs delivered through new mediums such as streaming online video also bring different possibilities to the traditional methods of generating revenue from television advertising.

Another type of advertisement shown more and more, mostly for advertising TV shows on the same channel, is an ad overlay at the bottom of the TV screen, which blocks out some of the picture. "Banners", or "Logo Bugs", as they are called, are referred to by media companies as Secondary Events (2E). This is done in much the same way as a severe weather warning is done, only these happen more frequently. They may sometimes take up only 5 to 10 percent of the screen, but in the extreme, they can take up as much as 25 percent of the viewing area. Subtitles that are part of the program content can be completely obscured by banners. Some even make noise or move across the screen. One example is the 2E ads for Three Moons Over Milford, which was broadcast in the months before the TV show's premiere. A video taking up approximately 25 percent of the bottom-left portion of the screen would show a comet impacting into the moon with an accompanying explosion, during another television program.

In 2007, Google Executive Chairman Eric Schmidt, then CEO, announced plans to enter the television advertising business, despite its lack of any internal video production or network placement capability or expertise. Initial industry speculation was that they would use a business strategy similar to their scheme for radio ad sales, primarily the acquisition of operations system support provider dMarc. Google announced the shutdown of its TV ads product in 2012 . According to the Google corporate blog, Google abandoned its radio ad sales feature and its radio advertisers in February 2009. Google sold its radio buying assets in August 2009. Google's radio effort was widely considered a failure, as was their foray into print ad sales. These two traditional media schemes were among a number of Google's media and technology experiments, which have yielded mixed results.

Online video directories are an emerging form of interactive advertising, which help in recalling and responding to advertising produced primarily for television. These directories also have the potential to offer other value-added services, such as response sheets and click-to-call, which greatly enhance the scope of the interaction with the brand.

During the 2008-09 TV season, Fox experimented with a new strategy, which the network dubbed "Remote-Free TV". Episodes of Fringe and Dollhouse contained approximately ten minutes of advertisements, four to six minutes fewer than other hour-long programs. Fox stated that shorter commercial breaks keep viewers more engaged and improve brand recall for advertisers, as well as reducing channel surfing and fast-forwarding past the ads. However, the strategy was not as successful as the network had hoped and it is unclear whether it will be continued in the future. The growing popularity of the internet will continue to draw audiences away from advertisers populating just the television platform.