Are TV advertising and online video advertising converging or diverging? With tens of billions of dollars of advertising spending at stake and soaring bets on original programming, this is a critical question for all players in the ecosystem.
There's a clear case for divergence, with spending shifting away from TV and toward online video. Linear ratings are down, viewers are taking more control over their experiences than ever, SVOD is booming, online originals are proliferating and online video offers superior targeting, ROI and programmatic options. A recent report indicated that in April 2015, TV spending was down 7% for broadcast and 8% for cable year-over-year, while online video was up 44% year-over-year.
But on the flip side, there's evidence that TV and online video advertising could be converging, driven by their ability to complement one another. Factoring in mobile, there's a strategic argument to be made that advertisers will pursue more multiscreen campaigns that include TV. Recent data from Videology showed a more than 3x increase in multiscreen campaigns in Q1 '15 vs. Q1 '14.
Convergence/multiscreen relies on the longstanding assertion that TV's reach can be cost-effectively bolstered by online and mobile video's targeting and engagement potential. This is especially true for younger demos where viewing shifts are most prevalent and online usage is heaviest. In this environment, a TV-only ad strategy means incremental reach is very expensive and online/mobile components can help conversion/ROI.
The question of how video ad dollars will be allocated in the future is critical for all parties. Most TV networks still derive the majority of their revenue from advertising, just as do most online video providers. Across all outlets there's been a proliferation of expensive original programming that's intensifying competition for ad dollars (as the elaborate recent NewFronts presentations attest). Finally, with connected TV devices now in over half of U.S. homes, competition for attention in the living room is greater than ever.
At the June 16th Online Video Advertising Summit, our opening session will delve deeply into this topic, with 5 industry experts. Scott Ferber, Chairman and CEO of Videology, will first present key trends/data, and will then moderate the session, with participants Andrew Feigenson (Managing Director, Digital, Nielsen), Kris Magel (Chief Investment Officer, Initiative), Melissa Roberts (GM, Enterprise Solutions, FreeWheel) and Brian Wieser (Senior Analyst, Pivotal Research Group). It promises to be a fascinating discussion.
Learn more about the 50+ executives who will be speaking at the Video Ad Summit and register now!