The time to get ahead of the curve is now…the TV industry is about to join the connected age.
From Wi-Fi-connected baby scales to a robot bunny that zooms around your house announcing your social media newsfeeds...all electronic devices are coming to the connected era! With this year's CES coming to a close, it's a good time to think about how the connected world will impact integrated marketing.
I won't expound on the marketing virtues of a robotic rabbit in this column (though I'm sure there are many). But I can give some thoughts on how connectivity on another consumer electronic device, television, will impact marketing strategy.
Recently, I watched influential VC Mark Suster's presentation regarding the future of the TV business. Suster points out that some major developments have happened since the early dot-com days that will allow for this new connected TV world to take off. He argues that the combination of the decreasing production costs, a realistic content distribution model for online video, and the rapid increase in connected TV sets puts the TV business just 12 to 24 months away from massive disruption.
Currently, few advertisers are placing ads on connected TVs. But the market is poised to grow as the percentage of U.S. homes with connected TVs doubled in 2011 to 8 percent. And the total penetration of connected TVs is expected to grow to 20 percent worldwide by 2016. And this is before Apple really gets into the game with its mythical TV set.
A connected TV world exponentially extends TV's existing fragmentation. In addition to all 500 channels you get now via traditional cable/satellite, Wi-Fi connectivity allows TVs to get infinite amounts of programming. In this environment, TV spots will become as readily available and accessible as online banners. Networks will become more like program packagers and the ones able to draw the largest audiences will continue to draw a greater proportion of the advertising dollars than their viewing share represents. But TV "ad networks" (YuMe appears to be the current leader in the space) will be able to even the playing field by leveraging the aggregation of viewer data. And they may even help predict consumer behavior. TV ad networks will have greater freedom to slice and dice consumer data than the highly regulated cable industry. Not to mention the potential opportunity of incorporating social media into the TV experience, where consumers will even more freely give up marketable information and insights.
It won't necessarily be about delivering unique TV spots to each and every consumer but more about the ability to buy extremely narrow and relevant segments of the audience. In addition to buying TV from traditional sources, marketers will be able to buy TV spots by audience segment across all programming.
The key adaptation for the savvy marketer will be an even greater emphasis and investment in data analytics. In-depth knowledge of your consumers and how they buy your products will give you the ability to leverage this media. Greater customer segmentation will match your consumers with new audience segments.
Whether you are in my world of integrated direct response or a brand marketer, you will need to rely heavily on a media agency that has the skills to optimize your media schedule on a dime and deliver strategic insights backed up with heavy data and analysis. And this in turn requires media agencies to make greater investments in technology and platforms.
Connected TVs allow brand marketers greater measures of engagement that will allow for adjustments to media and messaging at the very start of the sales cycle. Advanced TVs that include front-facing cameras may also bring unique tracking and measurement by recognizing faces and responses in the room. This could save a marketer who reads the tea leaves correctly and makes quick changes to spots that just don't drive sales.
Marketers will need to reach potentially hundreds of audience segments with unique messages, so a great creative partner will also be an important ally. This environment will demand an agency that can consistently deliver a volume of ideas that meet your ever-growing customer segments and then adapt that messaging on the fly. Since producing quality TV ads could be done today on your iPhone, your creative agency should be able to focus on large volumes of high-quality and unique messages.
So for most of us in the integrated marketing space, we should rejoice and welcome the connected age. The time to get ahead of the curve is now; the TV industry is about to join the party.
What do you think? How would a connected TV world impact your marketing efforts?
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Gavin Ballas is vice president of business development for MDC Partner's Integrated Media Solutions, an integrated direct response media agency. He has nearly 15 years of experience building direct response campaigns throughout online and offline media channels.
Hong Kong, May 5-6, 2015
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