ACM - Computers in Entertainment

The Evolution of Advertising Will Be Televised

By Dennis Anderson, Gali Einav, Katja Schroeder

The business of television is stronger than ever.  Today’s TV upfront market amounts to a record high of $18.5 billion.  TV networks enjoyed double digit growth rates in cable and digital ad sales in the past year. What is behind the TV marketer’s secret of success? And, how sustainable is the growth in TV ads in the next ten years?

First, TV networks have tapped into the trend of cross-platform advertising, extended their reach beyond TV with online and mobile apps. According to research cross-platform advertising ¾ campaigns spanning TV, online and mobile screens ¾ helps increase brand favorability. The  “Future of TV” study that Comscore conducted in 2010 concluded that consumers’ interest in commercials more than doubled from 15 to 36 percent when given a choice to watch advertising on TV only or both on TV and online. Brand favorability also increased from 13  to 29 percent. A Yahoo study from June 2011 showed that nearly 50 percent of respondents remember the brand/product when watching an online video ad.

Second, advertising shifted from general to personalized campaigns, both on TV and online. Advertising can deliver targeted messages to individual households, based on socio-demographic and behavioral data information, media usage, lifestyle habits, and purchase behavior. This means marketers can identify which pets are owned in an apartment building. This allows pet food brands to advertise directly to households with pets.

Let’s look at two recent examples.

Visible World has been the first company bringing targeted advertising to 3.5 million individual households via their cable box. Cablevision customers receive personalized ads, matching creative with market segment analysis that uses data such as income, education, and lifestyle habits. A recent campaign for AT&T showed a 70-90 percent increase in subscriber acquisition and upgrade rates.

Eyeview, a provider of personalized video advertising, executed a personalized campaign for the travel site Kayak in September 2011. The personalized ad changes the departure airport (i.e. New York or Los Angeles) based on the viewer’s geographic location.  An evaluation by Knowledge Networks showed a 100 percent improvement of Kayak brand favorability and up to 13 percent increase of enjoyment of the Kayak ad.

Third, advertising exited the era of one-way communications and is adapting an interactive model to create experiences and engage with audiences.  Backed by the six largest cable operators ¾ Comcast, Time Warner, Charter, Cablevision, Cox, and Bright House ¾ Canoe Ventures is focused on interactivity via Live TV. Canoe provided request for information (RFI) trials for brands like USPS, GE, HP, and Coca Cola. The RFI is an overlay call-to-action at the bottom of the TV screen. Viewers use their remote control button to request home delivery of free product samples. Canoe plans to add additional interactive features, such as polling, voting ,and trivia games.

As part of growing trends in interactive advertising, today’s marketers encourage the sharing of advertisements via social networks and location -based services. Jimmy Choo used Foursquare to organize a real- time treasure hunt for shoes in its London stores. Participants received and discussed clues via social media channels to help them find a pair of Jimmy Choo shoes, which was “checked in” at different locations. Participants who followed the leads and arrived on location got a piece of the treasure— a pair of shoes.  The promotion, and chatter on social media channels, brought Jimmy Choo a 37 percent increase in sales. 

Another example is the Toyota’s Swagger Wagon campaign. To shake off a sales decrease after car recalls in the United States, Toyota created a social engagement campaign to re-engage with car buyers, starting with parents, the “minivan families,” and thereby potential buyers of the Sienna minivan. At the core of the campaign is a video clip called the “Swagger Wagon” shown on TV and social media channels. Two parents rap about parenthood and taking care of their kids with the help of the Sienna minivan. Striking a cord with a new generation of families who want to stay hip and be responsible adults, the clip became a viral hit and garnered 9.6 million views as of September 2011. Members of the community were invited to create their own version of the clip, which increased the engagement and garnered additional views and discussions through their site and dedicated Sienna YouTube channel that featured additional videos by the Sienna Minivan family showing car benefits for families with children.

The new multichannel, cross-platform advertising model ¾ combining TV, social media and mobile ¾ has changed the way consumers receive, share, and discuss information about products and services.  The evolution of the advertising model towards a multi-channel experience has fueled the advertising revenues of TV networks, as TV has remained a core component of cross-platform campaigns.

The new model allows companies to create more effective advertising formats for their products and services.  However, the model is and cannot stay static. As consumer viewing habits change, the preference for how and when to consume information as well as how to experience products and services will continue to change. Some platforms will become more dominant than others for the next generation of consumers. Having grown up in a digital world, younger consumers will flock to mobile and social channels. The TV advertising format will merge with mobile and online platforms. New channels will evolve. Advertising has just begun to exploit the opportunities to communicate brands in the age of seamless media convergence. 

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