December 5, 2006
© 2006 Home Box Office, Inc. All rights reserved. HBO® and The Wire® are service marks of Home Box Office, Inc.
New Advertising Strategies - December 5, 2006

<1                                      look at the technology and economy...
New Advertising Strategies - December 5, 2006

<3                                         help of EchoStar’s DISH Network...
New Advertising Strategies - December 5, 2006

New Advertising Strategies - December 5, 2006

                                                   Who's Interacting wit...
New Advertising Strategies - December 5, 2006

<6                                       should be embraced rather than   ...
New Advertising Strategies - December 5, 2006

    n der

       “ NFridays. Fridays”? That(12/04/06) looks at sens...
New Advertising Strategies - December 5, 2006

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Tomorrow's Ad Strategies Here Today

  1. 1. December 5, 2006 No. 49 Vol. 5 Home | Morning BRIDGE | The Evening BRIDGE | SkyREPORT | SkyRETAILER New Advertising Tomorrow’s Ad Strategies Here Today Strategies Admitting There’s a Problem 3 How Interactivity, Addressability and Accountability Will Decide Who Wins I Exploring the by Matthew Colella Interactive 4 t’s no secret that traditional media companies are facing trying times in Technology’s Task 4 the not-so-traditional landscape of next-generation advertising. To be suc- cessful in the billion dollar pay-attention-to-this industry, companies of all ilk – at least the thriving ones – are applying new tools to the trade in hopes Advertising Dollar of maximizing sales, publicity and traffic. Trends 5 Take Google, for example. While established companies insist on sitting around and debating whether this financial goliath is friend or foe, Google Who’s Interacting continues its hidden pursuit of total media domination. It may claim to be a with Ads? 6 search engine/web services provider, but make no mistake that Google is out to rule the media world. Realizing IPTV’s The do-no-evil company asserts that it is not in the media business but as Function 6 >3 Under the BRIDGE Volatile Media Budgets Have Your Squid, Anticipated Allocation of 2007 Media Budgets And Read it, Too 8 (Average Response) Heads Up 11.5% Online 24% The BRIDGE Media Group Out of Home 5.6% has taken off the wraps of 11.5% Greatest a new Web site redesign for Budget 11.4% its flagship product The Newspapers 18.3% Share BRIDGE. The site offers daily headlines and direct 8.2% Magazines access to all of The BRIDGE 13.7% Smallest Media Group's e-pubs, Budget including the Morning Radio 7.9% Share BRIDGE, Evening 14% BRIDGE, SkyREPORT and 11.8% SkyRETAILER. The Cable TV 20.4% BRIDGE weekly in-depth report also is part of the 16.8% Broadcast TV redesign as well as a blog 29% from Paul Maxwell. Also included is a searchable 0% 5% 10% 15% 20% 25% 30% Source: American Advertising Federation (11/06) A archive as well as free data The BRIDGE 2006 via the DataBRIDGE sec- ccording to the American Advertising Federation, television can, at tion. Check out the latest best, still command an average of 50 percent of media budgets. At the at: http://www.mbc-the- same time, allocations could fall as low as 29 percent on average while online advertising could see as much as a 24 percent share. In AAF's recent survey, ad professionals indicated both the greatest share of media budgets (blue) and the smallest share (silver) for the upcoming year.•
  2. 2. © 2006 Home Box Office, Inc. All rights reserved. HBO® and The Wire® are service marks of Home Box Office, Inc.
  3. 3. New Advertising Strategies - December 5, 2006 <1 look at the technology and economy According to R&M’s Broadband TV the old saying goes; actions speak of tomorrow’s advertising strategies Platform Strategies & Roadmaps louder than words. Google’s recent – and we’ll show you companies that Survey, CBS Television Network moves into print, radio and online are making them the reality of reported that ad spending on the video stand to generate the compa- today. four major networks (ABC, CBS, ny roughly $3 billion via advertising NBC, and FOX) barely achieved a avenues alone. And, company CEO Admitting There’s one percent increase in 2005 over Eric Schmidt has said, television is A Problem the previous year. Internet advertis- next on the menu. ing, however, increased by double- With the Google machine devour- Fact: Every major media company digit rates that year – by various ing outdated business models, tradi- across the country is trying to keep estimates from 15 percent to 30 per- tional businesses have no choice but pace with the changes revolutioniz- cent – and has already seen nearly to embrace new 40 percent bursts “We try to get the most money media opportunities this year in select as part of a winning market categories. advertisement strate- gy. A recent study possible for a 30 second ad spot or “The declines in VOD piece ... we’re focused on once-reliable TV executed for the ad revenues are American Advertising enabling new forms of inventory partly the result of the erosion of the Federation (AAF) on an enterprise scale.” young adult demo- shows that the indus- graphic between try is anticipating the ages of 18-49 that a significant slice — Ed Knudson that advertisers of the broadcast/ OpenTV VP, Marketing & Sales pay a premium to cable/satellite TV ad reach,” the report dollars pie will shift says. “TV viewer- to online video by ship among this 2010. Of the ad executives sur- ing long-established television view- group is down by one-third since veyed, more than one-third (33 per- ing habits. Constant developments 1993 as more consumers in this key cent) say that slice could be as big in digital entertainment raise new demographic turn to options other as 20 percent. challenges (and opportunities) for than the living-room TV for getting The AAF study projects that 2007 the entire video food-chain. news and entertainment.” budgets for online advertising will A recent report by Research and Compounding the problem has rise by an average of 42 percent. Markets suggests that the battle been the introduction of new tech- But while these advertising movers over the future of television viewing nologies that have lead to significant and shakers acknowledge the inter- is being driven by three principal changes in the television landscape. net is the future of interactive mar- factors:1) sluggish advertising trends There are more channels and pro- keting, many consider television to altering the economics of TV; 2) gramming options than ever before, have the “most innovative” offerings changing audience demographics; and new platforms such as the DVR, for integration with new media. and 3) technologies shifting the con- broadband and mobile TV are Whether you’re an advertiser, pro- trol of television schedules away enabling consumers to watch video grammer or operator, you can’t from media companies and into the on their own terms while simultane- afford to sit back and watch the new hands of consumers. With TV ad ously altering long-accepted ideas of media train of opportunities go revenues in decline – a slide the firm how networks operate. steamrolling by your company. says could very well be permanent – The R&M study indicates that time- Thank goodness for The BRIDGE, the entire broadcasting business shifted television viewing and porta- because inside this issue we’ll take a model is feeling the effects. >4 LCD Mounts Starting At $11.95 ea. Plasma Mounts Starting At $59.95 ea. Television Mounts Starting At $21.95 ea. Visit Us At for more information Your Source For Communications NORTH AMERICAN Installation Materials CABLE EQUIPMENT, INC. (800) 688-9282 3
  4. 4. New Advertising Strategies - December 5, 2006 <3 help of EchoStar’s DISH Network, carried on one of TMG’s eight bility trends have triggered an TMG formed its first major interac- owned-and-operated channels “unbundling” effect on TV program- tive ad campaign for Mercedes in beamed directly to a subscriber’s ming unleashing a massive change March 2005 and has since tackled set-top from the satellite. Once a of uncertainty and opportunity. “The projects for Hollywood movie pre- viewer enters the i-Ad by clicking on opportunity comes from various new mieres (Universal Pictures’ Miami one of the triggers, or via a banner economic models for TV, one or Vice, Sony Pictures’ XXX), the U.S. ad on the DISH Home portal, a more of which will be applied,” the Navy and computer equipment com- seamless transition (more on this firm says. “Uncertainty means that pany Hewlett Packard. below) takes the viewer to one of it is difficult to identify which of the By creating a web-like environ- the dedicated interactive channels. new business models will be winners ment on a viewer’s television, TMG “We’re delivering to advertisers and which will fail.” produced the first interactive ad compelling technologies like on- Touché. campaign that allowed DISH screen triggers, set-top box audience Network subscribers – in true arm- analysis and requests for informa- Exploring The chair quarterback fashion – to pur- tion,” company CEO Gary Turner chase goods via their remote without says. “DISH Network and TMG are Interactive ever having to leave the couch. setting the pace for the industry by Developed for Reebok, the interac- delivering iTV ads to three times In the right hands an interactive tive campaign ran during several more homes than any other U.S. tel- ad campaign can take an advertiser’s weeks throughout ESPN’s recently evision provider.” message and promote it to a whole acquired Monday Night Football and new level. Innovative services are offered the ability to buy player jer- Technology’s Task creating opportunities as companies seys, answer trivia and view video explore how television consumers clips of NFL stars. Satellite’s point-to-multipoint deliv- respond to interactive features. “These ads are more than just a ery system has found favor with the The average digital television view- means of engaging with the brand,” marketing community because an er thoroughly knows how to operate TMG tells The BRIDGE. “Our clients interactive advertising campaign can their on-screen EPG thanks to inces- learn about who their customers are, be beamed across the country to sant channel surfing, DVD menus how long someone watched a partic- efficiently targeted audiences. With and the increasing simplicity of DVR ular ad, which demographic they’re cable operators, coverage areas are and video-on-demand functionality. from. They’re opting in as viewers.” restricted to regions in their footprint This type of consumer has evolved TMG says it is the exclusive ad and have limited the industry’s from a passive observer of television representative for the majority of appeal to national advertisers. content to an active consumer with a DISH Network programming, capable But now that the cable sector is growing desire for a more interactive of selling 30-second advertising enjoying some of its hottest results experience. inventory across more than 100 in years, some tech companies are Leading marketers are using more cable networks. The company’s piggybacking the MSOs’ success to advanced advertising strategies interactive ad campaigns use pop-up take advertisers on a ride toward because today’s audiences are messages during a regularly interactive paydirt. accustomed to their television screened spot to transport the view- Tandberg Television’s open- provider’s interactive service. er to an internet-esque i-Ad. There standards-based technology solu- Marketers hired to communicate a viewers can use their remote to nav- tions enable cable companies, message that will engage an audi- igate through photos, request among others, to utilize digital ence must embrace this premise of brochures and coupons, enter con- media for live, on-demand and inter- television advertising’s new reality. tests or find local product dealers active content. Earlier this year the One company fully engrossed in with nine-digit zip code precision. company launched an initiative for the interactive new world is The i-Ads similar to Reebok’s, or more VOD advertising with Comcast Media Group (TMG – formerly recently one conducted with DISH Spotlight – the cable giant’s ad Turner Media Group). With the for detergent manufacturer Tide, are >5 INSTALLATION SUPPLIES TO MEET ALL OF YOUR NEEDS! MULTI-SWITCHES S I N C E 1 9 9 4 S I N C E 1 9 9 4 4
  5. 5. New Advertising Strategies - December 5, 2006 Advertising Dollar Trends <4 sales division – to manage and auto- matically place ads in on-demand content delivered to Comcast’s digi- tal cable subs. Broadcast/Cable TV Ad Spending Expected To Deployed across the company’s Shift To Online Video by 2010 entire footprint, AdPoint is being uti- lized with VOD networks like 33% SuccessTV, Music Spy Videos and DriverTV, and provides cable opera- tors and programmers a solution for Percentage of Respondents the placement of non-linear advertis- 25% ing that’s compatible with all major VOD streaming servers. According to Tandberg, AdPoint runs as a single comprehensive plat- form supporting advertisers, ad agencies, brokers, cable nets and MSOs – all in one environment. It 11% 11% helps advertisers move beyond the 10% traditional 30-second spot and deliv- 6% ers personalized messages to target- ed audiences to further engage their 3% customers. 1% “The changes taking place in the industry are affecting every link in the value chain,” Tandberg President >50% <1% 10-19% 20-29% 30-39% 40-49% 1-5% 6-9% Reggie Bradford says. “Technology platforms that can help the various players work collaboratively will be key to success in delivering differen- Source: American Advertising Federation (11/06) tiated content.” Yet another company making The BRIDGE 2006 P waves through advertising technolo- gy is OpenTV with its three-pronged repared by the Atlantic Media Company, the fourth annual AAF approach to taking linear video ads Survey of Industry Leaders on Advertising Industry and New Media into the interactive realm. It’s a Trends offers insight into attitudes among high-level industry leaders means of differentiating an ad, the regarding new media and the demands of the industry. According to the company tells us, and the interactive research, most ad executives surveyed expect a significant portion of benefits include consumers’ deeper broadcast and cable TV ad dollars to shift to online video by 2010, with engagement with a particular brand 33 percent predicting that switch will be between 10 and 19 percent. In via a specific message to a specific addition, 2007 budgets for online advertising are expected to rise by an household. average of 42 percent over this year. As to the challenge of integrating When the rubber hits the road, traditional with online media, broadcast television is seen as offering the “We try to get the most money pos- "most innovative" integration with online media.• sible for a 30 second ad spot or VOD piece,” VP of Marketing and Sales Ed of inventory on an enterprise scale.” geted ads to specific markets Knudson tells us. “Through The company’s addressable adver- matching specific household profiles. OpenTV’s robust, reliable system, tising product uses video stream- The product can be integrated at the we’re focused on enabling new forms switching technology to deliver tar- >6 To Our Research Sources ... Thank You: CentrisBRIDGE Research and Markets American Advertising Federation Multimedia Research Group Interactive Digital Sales 5
  6. 6. New Advertising Strategies - December 5, 2006 Who's Interacting with Ads? <5 set-top box for linear addressability or elsewhere on the plant to enable session-based addressability like network PVR or switched-digital Profile of Viewers Interacting with Ads video. OpenTV’s enhanced ad system 100 12% 55+ attempts to further engage audi- ences by enabling the integration of 90 interactive applications like content 80 creation and management systems 52% 51% Female with the existing subscribers’ sys- 70 39% Lower 35-54 tem. But Knudson says it all starts with 60 the management of linear video through applications like VOD and 50 ‘bumper ads.’ The company’s sales and inventory management product 40 is designed to help operators 30 Mid-Upper 48% 49% 49% squeeze the most out of an ad by 16-34 increasing inventory yield. Features 20 Male like rate yield management, approval routing, scheduling, revi- 10 sion tracking, verification and billing all can help an operator offer its 0 clients something its competition may not. Gender Age Social Class Source: iDigital Sales (5/05) Realizing IPTV’s The BRIDGE 2006 A Function ccording to advertising solutions provider Interactive Digital Sales, In an IPTV system, next-genera- about 7.8 million U.K. households had the technical ability to interact tion advertising strategies are often with advertisements on the Sky platform last year. As of mid-2005, 60 considered an element of the third percent of those had seen an interactive ad and 26 percent have inter- phase of a deployment program. acted with one. IDS research suggests that the typical viewer interact- First a company must deploy the ing with ads is female, between the ages of 16 and 34 and is in a mid to technology and get the IPTV service lower level "social grade."• in an operational and scalable state; then comes garnering compelling content, forming creative program- phase of development: applications IPTV revenue will be generated ming packages and developing mar- and advanced advertising. from the subscribers. As the IPTV keting programs that will attract cus- According to Multimedia provider moves into its third tomers. Research Group (MRG), this phase, companies will begin to If a company has been successful transition is critical because it sig- experience a healthy split where at launching the IPTV network it nifies the change of revenue half of their revenue is generated envisioned, and enough subscribers sources for IPTV systems. During from the sub, the other half from have signed up for the service, then the first and second phase of … you guessed it, advertising. the firm is ready to enter the third deployment, 100 percent of all >7 6
  7. 7. New Advertising Strategies - December 5, 2006 <6 should be embraced rather than regions,” MRG says, and “multiple A study from MRG suggests IPTV attempting to suppress it,” the cable companies create a patchwork advertising is a virtual gold mine in report suggests – and idea, it of coverage.” The firm’s report says terms of generating income, and seems, the cable companies sup- it is difficult for IPTV’s competition to that the industry is poised to exploit port. create a national campaign across next-generation advertising tech- One of the most successful this hodgepodge of a system. nologies. With U.S. cable TV ad advanced advertising strategies sales exceeding $22 billion and being used by the cable industry is a Talk About Relevance growing at 12 percent per year, and simulation of the internet model, the internet advertising at an estimated report says. Using a zip code-based New advertisement approaches $12 billion and growing 20 percent search, consumers use interactive are based on the premise that per year, the firm says IPTV opera- features and video clips targeted interactive content is more relevant tors cannot ignore the exclusive ben- directly at local audiences to find to today’s television viewers. efits that their technolo- Whether you’re an gies bring to these new advertiser, pro- markets. “The only thing at stake is the $400 grammer or opera- “Timeshifting with DVRs and the rise of billion global advertising pot of tor, advanced ad vehicles can internet advertising has gold, and until another company increase the time figures out a way to compete, forever changed adver- people spend tising,” MRG’s IPTV watching your con- Director Bob Larribeau Google shall reign supreme.” tent through inter- says. “IPTV operators active applications. are at the point where Innovative adver- they have to exploit their tising strategies cre- unique technical advan- goods and services. ate incremental revenue opportuni- tages.” Another thriving service-model ties, optimize existing ad campaigns MRG’s Advanced Advertising for being employed is the long-form ad and help reduce churn. Grab a IPTV Services report says there is a using a VOD server to show clips viewer’s attention in new and com- growing suspicion and aversion to associated with special-interest por- pelling ways and avoid being a casu- advertising by television consumers tals on an EPG. Like the search- alty of traditional media’s after- and the DVR has given them a way driven “pull” ads, MRG says these thought. of acting upon that behavior. The long-form ads exploit the VOD A recent article in the New York technology validates their mistrust servers already installed in many Times says Google’s ambitions are by providing a convenient way to networks to provide an added rev- colossal because it wants to license skip ads if they choose. enue stream. the world’s content and sell ads over The research firm says that while What this all adds up to, MRG sug- it in a more efficient, automated the advertising industry is devising gests, is that an advertiser can may. The only thing at stake is the ways to fight the DVR by disallowing approach an IPTV company and cre- $400 billion global advertising pot of its ability to skip ads, this strategy ate a comprehensive national cam- gold, and until another company fig- is doomed to fail. “There is an paign. “The cable companies … ures out a way to compete, Google inevitability to technology that nearly always serve only smaller shall reign supreme.• A Service of Media Business Corp News Editor: Chief Financial Officer: Gina Rayne Matthew Colella 165 S. Union Boulevard, Suite 280 Lakewood, Colorado 80228 303.271.9960 (T) 303.271.9965 (F) ISSN # 1550-1779 Editor-in-Chief: Retailer Editor: Chairman: VP/Group Publisher: Evie Haskell Tim Sprinkle Paul S. Maxwell Rob Stuehrk Senior Editor: Production Manager: President: VP Sales/New Business: Robert Lehmann James Donnellan Michael Hopkins Cheryl Hoeppner 7
  8. 8. New Advertising Strategies - December 5, 2006 n der U “ NFridays. Fridays”? That(12/04/06) looks at sensecompanies can redis- o e-mail BusinessWeek might make more how than casual dress cover “face-to-face meetings” and maybe even trump technology. E-mail can be notoriously hard to decipher true meaning from ... so an emphasis on talking might take away a lot of company tensions. ig Brother Walkers: No place to hide takes on a Gotcha! B whole new meaning with new GPS-enabled footwear from Isaac Daniel. They're currently being hawked as the ultimate in security shoes. (Feel threat- ened? Just push the Covert Alarm Locator and an alarm will whiz off to a monitoring station which pin- points your location and alerts local law enforcement authorities. Let's just hope you don't happen to be in, say, Mexico City.) Now how long, we ask, before we've all got the shoes, cour- tesy of the GWB security force for keeping Americans safe. To be the first on your block to get tracked go to: enor Rather? In the category of “things-that-really-make-sense-only-after- S you've-had-time-to-think-about-them,” HD Net has signed Patron tequila as the major sponsor of Dan Rather's investigative series. ld Media, New Form: Leave it to those wily Japanese O fisherpeople. They've updated that old, old media form ... the postcard ... into an all squid, all-edible format. Brought to our attention by one of our favorite far-out websites (pinkten-, the Surumail postcard comes from the coastal town of Susami where a fishing coop flattens squid jerky, vac- uum-packs it into the shape of a postcard and attaches a label for postage, delivery address and a short message. Can't wait to hear what our local postmistress (a voluble former second-grade teacher) has to say about that!• 8
  9. 9. New Advertising Strategies - December 5, 2006 Upcoming Events January 8-11 March 6 April 14-19 International Consumer Cable Positive Dinner 2007 NAB 2007 Electronics Show Marriott Marquis Las Vegas Las Vegas New York City html April 17-18 January 23-25 ACA Washington Summit SCTE Conference on Emerging Wyndham Washington Hotel March 6-7 Washington, DC Technologies Digital Music Forum East Houston New York City May 1-3 CONNECTIONS January 29-30 Santa Clara, Calif. March 6-10 NCTC Winter Educational EHX Spring 2007 Conference Orlando, Fla. May 7-9 Las Vegas NCTA National Show Las Vegas February 4 March 18-21 Super Bowl XLI USTelecom Sands Expo May 11-13 Miami, Fla. Home Entertainment Show and the Venetian Las Vegas Grand Hyatt, New York, NY February 7-9 2007 CTAM Research May 22-24 Conference March 26-28 2007 Annual BCFM/BCCA St. Petersburg, Fla. CEA Entertainment Conference Technology & Policy Summit Las Vegas ences/research Washington, DC February 19-22 June 18-21 Satellite 2007 March 27 NXTcomm Washington Convention Center Digital Patriots Dinner Chicago Washington, DC Washington, DC February 25 April 9-12 July 23-25 2007 Academy Awards The National Space Symposium CTAM Summit Hollywood, Calif. The Broadmoor Hotel Washington, DC Colorado Springs, Colo. myawards/index.html ences/summit Upcoming Issues of The BRIDGE January 9 February 6 December 12 Industry Projections Training/Recruiting Sound Strategies: Music Wars January 16 February 13 Mobile Video EPGs December 19 Year-End Wrap & Awards January 23 February 20 Adult Programming Media Ownership January 2 The CES Issue January 30 February 27 The Platforms Battle of the Premiums 9