Future of video advertising in a connected world

From Informitv

While television advertising is here to stay, relatively flat growth forecast over the next five years means broadcasters must advance new strategies to provide sustainable growth and avoid losing ground to competitors. That is the view of a research report produced by IHS Screen Digest in association with online video advertising platform provider VideoPlaza. Sorosh Tavakoli, the founder and chief executive of VideoPlaza, discussed the conclusions with William Cooper of informitv.

Traditional television advertising is still preferred for brand advertisers and has maintained its share of all media advertising. The general advantages of television advertising in creating emotional connections between brands and consumers remain.

However, the report suggests that increased pressure on pricing, audience fragmentation across digital media and rising demand for more granular and timely return-on-investment metrics from the demand side is pressing broadcasters to diversify their advertising business model beyond linear television.

With the growth in online advertising, video facilitates the proliferation of brand advertising. The delivery of audio-visual brand narratives is no longer confined to the broadcast environment. The report observes that the industry adage that “TV is the worst form of advertising except all others that have been tried” may still hold true today, but the nature of what constitutes television is changing.

By the end of 2014, IHS Screen Digest expects that in North America and Western Europe there will be more active connected living-room devices, including televisions, set-top boxes and games consoles, than television homes. There are already more connected devices in these markets than there are television households when smartphones and tablets are included.

This introduces further complexity and cost for anyone wishing to aggregate audiences across such devices. The world of online video advertising has many more variables than the traditional television broadcast environment, which is limited by historical convention, broadcast economics and regulation.

In order to make the most of the opportunities presented by new connected devices the fragmentation of platforms must be forged into a cohesive ecosystem to deliver reach and scale, which is imperative if this is to become a viable alternative channel for brand advertising.

The implication of this is that broadcasters should delegate the delivery of online video advertising to partners such as VideoPlaza that can offer economies of scale, while they focus on providing programming.

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