Decreasing TV ad spending raises prospects for more Interactive TV

Advertising is to the television what gas is to automobiles: both are basic elements of their respective industries and it's highly doubtful that either sector will operate completely free from these fundamentals within our lifetime. However, as consumers' attitudes and habits change, each industry must reduce its reliance on these essentials. Also, just as we are constantly reminded that oil is not a renewable resource, so too are we seeing warning signs that TV advertising may be diminishing. Bob Reaume, VP of policy and research at the Association of Canadian Advertisers told Canadian NEW MEDIA earlier this week that dozens of major TV clients have reduced the percentage of their advertising budgets devoted to television, some by as much as half, to allocate it in other areas. Reaume says that mid-sized companies that couldn't previously afford national television ad space are now filling in the gaps as larger clients retreat, but he doesn't know how long this will last. As well, since the CRTC increased the number of available advertising minutes per hour in primetime from 12 to 14, demand for ad space should wane even further and prices may decrease. When you look at all sides of the television industry the prospect of increasing the value of TV ad space becomes even more daunting. Increased time shifting has audiences watching signals where regional advertisements may be irrelevant, and streaming video, PVRs and the release of almost every television series on DVD give viewers many more commercial-free options. But declining interest in TV ad space isn't due to reduced reach alone. As CNM also reported, companies such as Nike are increasing their ad spends in various new media formats, such as social networking websites, because these media allow clients to interact and form a relationship with consumers. So increasing viewership would seem to be only part of the solution."I think that have got to do something different than traditional television if they're going to stay connected to the youth audience competitive with their peers," says Michael Carter, president and CEO, MyThum Interactive Inc., which enables television interactivity with viewers' cell phones. "Traditional passive television really isn't cutting it anymore and I think you're going to see more and more interactive formats....And you'll see a lot more viewer participation that also creates new real estate for advertisers and sponsors to get involved with beyond just traditional ad buys."Interactive formats offered by companies like MyThum could not only increase viewership, they could also deliver a more attentive audience. Reaume says it's an idea advertisers could be interested in. "There's one sort of general rule from the advertisers' side and that is attention equals money," he says. "So if can prove that they're getting some attention and involvement with viewers and consumers it will be a growing medium."Certainly, advertisers would be interested in testing the effectiveness of these formats. Reaume continues: "Advertisers are involved in all kinds of experimentation and all kinds of new media and this would be . The linkage in particular between new media and television is an interesting one because advertisers are desperately looking for some way to slow down the decay rate of the effectiveness of television." While broadcasters have been forced to release content online rather than lose viewers altogether to unlicensed sites, interactive television presents more of a pure broadcasting/new media hybrid approach. And if the automotive industry has taught us anything, hybrids may be the way of the future.

Decreasing TV ad spending raises prospects for more Interactive TV

News | 10/19/2007 11:41 am EDT

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