Long Live Television: Digital Video Ad Convergence Keeps TV Relevant

Chris Horton
Chris Horton Digital Strategist, SyneCore Tech

Posted on March 15th 2014

Long Live Television: Digital Video Ad Convergence Keeps TV Relevant

 

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Over the last few years or so, digital marketing has started to come into its own, as corporate advertising and marketing budgets slowly, but surely, shift from “traditional” categories like print, radio and TV media buying to “digital” categories like web, social media, SEO, content marketing, and others. This shift has been met with a correspondent attitudinal change, as many advertisers and marketers (a capricious lot as a rule) have gone from poo-pooing digital to embracing and even evangelizing it, often at the expense of proven media plays like television advertising. Somewhat surprisingly and perhaps a bit ironically, a number of factors now point to the eventual convergence of TV and digital video ads. One of the big winners of this inevitable march toward digital integration is none other than the crown jewel of traditional advertising: TV. Long Live the Boob Tube.

Forget Traditional Vs Digital: It’s All Digital Now

Before we go further, I’d like to revise the long-held perception of television as a traditional advertising medium.

In 2009, the US switched all free-over the air TV programming from analog to exclusively digital broadcasting; US cables companies likewise followed suite. In fact, almost all other countries on this planet have already gone to digital TV broadcasting or plan on doing so over the next decade.

Therefore, in America at least, TV can (and should) now be regarded as a digital medium. Moreover, to the extent that many TV ads spots now feature some kind of digitally dependent call-to-action, whether to visit a website, engage on social media, or download a mobile app, TV also can (and should) be considered a digital marketing medium.

This shift from analogue to digital has brought TV into the larger sphere of digital media - a term which is generally understood in the context of online or computer-dependent media. For example, Business Dictionary.com defines the term digital media thusly: Digitized content (text, graphics, audio, and video) that can be transmitted over internet or computer networks.

Why is this relevant? Because bringing television into the constellation of digital media is a necessary first step in changing the commonly held perception that the two are distinct media plays. Though some may regard this as merely a subtle shift in thinking, the recognition on the part of advertisers and marketers that television is a digital medium allows both groups to see TV and digital video through a common lens, which helps pave the way to Digital Video Ad Convergence.

TV vs Digital Video: Reach vs Measurability

Only when the two are recognized as complementary and not competing media can the relative strengths and weaknesses of each be properly evaluated. In general, advertisers and marketers like the broad reach of TV ads, but prefer the granular targeting and measurability of digital video ads.

It is true that, at least for now, television enjoys a wider reach than digital video: 283 million Americans watch TV each month, while 150 million consumers watch video on the Internet. One might expect ad spend to reflect this approaching viewing parity. Not so. According to data from Nielson, in 2013, $78 billion was spent on TV ads, compared to just $5.72 billion for online video.

Reach and Influence

One reason for the relative disparity in ad spending is the data-supported perception held by many industry insiders that television advertising tends to influence audiences more than ads in other media. As reported in eMarketer, an August 2013 survey from AYTM Market Research found that 83.7% of US internet users said TV commercials were the most effective form of advertising. As further data from Nielson illustrates, in 2013, 62% of consumers indicated that they trust ads on television and 68% take action based on TV ads. 

Balancing the reach and influence of TV has been the difficulty of advertisers and marketers to collect and accurately measure data that ties TV viewership to buying habits. By comparison, digital video content, and the online (mobile) interaction data it generates, is more easily measured.

Digital Video Ad Convergence

What is needed is a way to integrate the two, to infuse the rich viewing data and audience metrics characteristic of digital video into the vast reach of TV advertising. This was the very topic explored by Nielson in its recent report, Video Convergence: Buying, Selling and Trusting Across Platforms, which brought together researchers, marketers and C-suite executives from all sides of the media industry to discuss the future of video advertising.

While the entire report is full of insight, I found the following statement to be of particular relevance:

Now, TV as an ad platform has started to absorb many of the characteristics of the digital ad world (i.e. rich viewing data, enhanced measurement techniques, etc.)…our participants agreed that this presents TV companies, which already have large audiences, valuable content and tens of billions of dollars in advertising revenue, with the opportunity to be pivotal players in the future of video advertising.

The Nielson report went on to form this general conclusion about Digital Video Ad Convergence:

For this convergence to take place, the advertising industry will need to embrace video as a platform agnostic medium. Then video, not the delivery channels, becomes the medium.

In other words, to regard TV and digital video as separate media is to make a distinction without a difference. If television and digital video are truly converging into a unified, multiscreen media environment, the company or companies that figure out how to make this an actionable and operational for advertisers and marketers stand to make a ton of money.

Turning Digital Video Ad Convergence into reality would probably involve some big industry players; it would likely require a concerted effort of a top video advertising platform and a leading, data-driven TV market research company…

Nielson+Videology = Convergence in Action

On March 3rd of 2014, PR Newswire issued a release announcing the direct integration of Nielson’s TV data into Videology’s video advertising platform, “which will allow true cross-screen planning, buying and measurement across linear television and online video. This integration is the first of its kind for creating a unified solution where advertisers can most effectively and efficiently plan, buy and measure ad campaigns across linear television and digital video platforms.”

In the release, Scott Ferber, Chairman and CEO of Videology was quoted as saying,"…this year marks a tipping point in that half of the video advertising placed through our platform will come from television buyers, and half will come through traditional digital channels. The convergence between TV and video is now fully recognized by advertisers…”

As you may have surmised, Videology is one of the world’s largest video advertising platforms. They’re also a privately-held, venture-backed company whose investors include Comcast Ventures. According to Crunchbase, Comcast Ventures is the private venture capital affiliate of Comcast Corporation. Made up of the recently combined Comcast Interactive Capital and NBCUniversal Peacock Equity Fund, Comcast Ventures “invests in innovative businesses that represent the next generation of entertainment, communications and digital technology.”

Well how about that.

Comcast Convergence

It looks like Comcast is all about convergence. Lest we forget, Comcast, the nation's largest cable company, is in the process of buying Time Warner Cable, the nation's second largest cable company, for a cool $45.2 billion. The proposed merger would combine more than 70 million subscribers, or roughly 30% of the cable viewers in the U.S, under the Comcast banner. On the online side, it would also contain about 40% of all high-speed broadband Internet subscribers in the U.S., effectively controlling both sides of the digital video ad delivery equation (TV and online video). I’m not quite sure what this means for the future video advertising, but it sure seems relevant to mention.

The Bottom Line

So what’s the bottom line? Where does Digital Video Ad Convergence mean for businesses and marketers? If companies like Videology and others can deliver on their promise of offering a unified solution, if they can really help advertisers and marketers efficiently plan, buy and measure ad campaigns across all television and digital video platforms, online video ad revenues may dramatically increase, and TV advertising may enjoy a bit of a renaissance.

Regardless of the speed or trajectory of Digital Video Ad Convergence, one thing is for sure. All the smug digital marketers (semi-guilty) who thought “traditional” TV advertising was dead better think again. Soon enough, your clients will be expecting you to work with crossover companies like Videology to advertise on all video platforms- including, yes, the Boob Tube.

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Chris Horton

Chris Horton

Digital Strategist, SyneCore Tech

Chris Horton is a Content Creator and Digital Strategist for Minneapolis-based Integrated Marketing Agency SyneCore. An avid tech enthusiast, Chris has written extensively on a number of topics relevant to the growing Marketing Technology industry, including SEO/targeted discovery, inbound, content, social, mobile, apps, online branding/PR, and Internet trends. Chris' marketing tips can be found on SyneCore's Marketing Technology for Growth blog. You can connect with Chris on TwitterLinkedIn, or Google Plus, or eMail him at chris@synecoretech.com.

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