A Nielsen and Simulmedia report released this month predicts the merger of TV and online ads by 2020. The increased use of multiple screens while watching TV, coupled with the ever-expanding library of TV content available online, has only hastened the inevitable unification.
While there are still a large number of obstacles in the way of a complete consolidation, several recent events support the prediction.
Just last week, cable giant Comcast purchased online video ad startup Freewheel. Freewheel’s technology personalizes and inserts online video ads, potentially opening up a whole new world for Comcast to run ads.
A growing number of TV companies are trying to expand their presence on the Web to stay competitive with online-only video publishers. Buying Freewheel builds a bridge between Comcast’s TV business and its online presence. This type of expansion from cable and TV companies is something that is likely to escalate in the future.
For some time now, programmatic has been a staple of the digital ad marketplace, but the options to do the same for TV advertisements remain slim. AOL-owned digital ad platform Adap.tv wants to remedy that with its own programmatic buying platform for TV spots.
With others likely to launch their own competing platforms sooner or later, Adap.tv certainly has an edge in the coming shift. Advertisers will eventually find themselves scheduling online and TV spots from the same platforms – it's just a matter of when.
Dish Network has pulled away as a leader in its own right by inking a deal with Disney Co. that lets it offer a number of channels on TV via Internet connection. The service, dubbed OTT (Over The Top), lets Dish deliver the Disney Channel, ABC, and ESPN to TVs via the Web instead of cable or dish. This lowers the cost for consumers who can’t, or don’t want to, mount a satellite dish.
For advertisers and marketers, this also means more online spots could be coming into users' homes through their TV set rather than their laptops. Primetime spots typically reserved for high-dollar TV advertisers could now go to lower-budget brands that want to capitalize on OTT.
How do those in the industry feel about the prediction that TV and online video will merge? According to a study from Videology, they agree.
The survey, conducted in conjunction with Forrester Consulting, asked 150 advertisers, media companies, and agencies what they thought about the merging of TV and online video advertising. Nearly 70% of respondents claimed it was “likely” or “very likely” that they would be planning TV and online advertising “holistically” within just three years. The survey just goes to show that members on both sides of the issue are predicting a marriage of the two mediums.
TV, according to another report from Nielsen, still dominates 57% of all ad spend, so it's not losing its spot at the top of the mountain just yet. That doesn’t meant digital ad spend isn’t gaining, either. In the first three quarters of 2013, digital ads made up 32% of all ad spend.
Those in TV shouldn't ignore online ads creeping up behind them. The more advertisers that see the value in online ads – which, by the way, tend to be cheaper – the more TV has to worry about. A symbiotic relationship could ease the tensions for both mediums.