Did you notice the commercial breaks during the Republican debates? While Fox is mum on the ad revenues it received from the first debate, it was a big payoff for CNN with its record viewership at 23 million for the second debate. Three hours commanded a price tag for ads that were 40 times its usual rate. (1) This monetary success inspired CNBC to up its ad pricing 25% for the GOP's third debate in October. (2)
However, ad revenues for broadcast networks and cable companies are down overall. (3) In fact, Forbes Magazine reports that "old media [i.e., television programming] is imploding at a fantastic pace right now."(4)
One reason is that viewers are "cutting the cord" to cable and satellite companies, opting instead to dish up their own channel line-up. The landscape for advertising opportunities is definitely changing. In fact, Wired Magazine reports that "about 7.6 million households have cut the cable cord" and that "53 percent of cable customers say they would leave their cable provider if they hand another viable alternative for TV". (5)
The pump is primed for the subscription-based cafeteria: Netflix, Amazon Prime, and Hulu. These are familiar brands that have forged their way into our lives via the Internet, by-passing cable and satellite companies AND... their preselected, predetermined, 200-plus channel line-up.
The appeal of these Internet services is simply too much to turn down: TV and movie libraries are literally at our touch-screen-fingertips. There's no waiting a week to see the next episode. There's anytime/anywhere streaming. Subscribing to your favorite television programming is customized and most often times cheaper, and there are NO commercials on many of these subscription services. And if you want to watch something that is not available in your subscription, just rent-a-stream through iTunes, GooglePlay, or CinemaNow. Just as cell phones have replaced the home landline and given us room to roam, Internet TV is replacing cable.
So how are television advertising opportunities evolving? The advent of Smart TVs has ushered in interactive television advertising, a.k.a. iTV. Delivered to the TV from a laptop, tablet, or mobile device through a broadband-enabled device like an Xbox, Chromecast, or Roku, this form of advertising is the advertiser's dream with regards to targeting and data mining.
According to Forbes, iTV "can provide marketers with targeting that is better attuned to individual households. Additionally, the interactivity inherent in digitally delivered ads can allow advertisers to view, in real time, whether ads are being viewed, clicked and accessed, as well as allowing them to change ads depending on the success".(6)
In an age where traditional commercials have been rapidly losing ground, it's the companies that embrace the new technologies that add interactive capabilities—games, coupons and informational videos—that will be the ones to gain significant momentum.
Sources
(1) CNN Money: http://money.cnn.com/2015/09/17/media/cnn-republican-debate-ratings/
(2) Advertising Age: http://adage.com/article/media/cnn-charging-40-times-usual-price-commercials-republican-debate/300185/
(3) Broadcasting & Cable: http://www.broadcastingcable.com/blog/currency/summing-it-national-tv-ad-revenues-down-27/143191
(4) Forbes: http://www.forbes.com/2009/05/07/zilliontv-video-broadband-technology-enterprise-tech-zilliontv.html
(5) Wired: http://www.wired.com/2015/03/internet-tvs-big-chance-oust-cable-almost/
(6) Forbes: http://www.forbes.com/sites/onmarketing/2013/05/20/guess-what-marketers-interactive-tv-is-actually-here/
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