THE AD REVOLUTION WILL NOT BE TELEVISED

Among most advertisers, agencies and media companies there is a growing consensus that the old broadcast models of advertising are being eroded by the march of technology and that new models will have to be found to promote their products. Consider the growing ubiquity of broadband access and the digital revolution that is fragmenting television viewing across hundreds of channels. Then combine those trends with the upsurge in personal video recorder technology (PVR) and the tendency for younger viewers to watch less TV in favor of sharing their own words, pictures, music and movies online.

In the UK, television viewing fell in 2005 for the first time in the medium’s history. The decline was most pronounced among those aged 16 to 24. In the US, where broadband penetration is even more widespread, those under 25 now spend more time on the Internet than watching television. The effect of these changing media habits is now having a material effect on advertising spending.

But according to Neil Jones of media agency, Carat UK, and others at the sharp end, big companies like Coca Cola and Unilever are actively reducing the amount they spend on television in favour of boosting their Internet budgets and so-called ‘direct response’ advertising – anything from online viral ads to traditional mail campaigns.

Unilever, the consumer goods giant, has said that during the last five years around a fifth of its £300m ad budget was shifted out of television and into outdoor posters, online advertising and sponsorship, such as Flora’s long-running association with the London Marathon. Meanwhile, the PVR effect is starting to make its presence felt now that the devices, which allow viewers to easily record shows as well as pause and rewind live TV, are in a meaningful number of homes. Over 1.3 million people now use the technology, with the majority fast forwarding through adverts on recorded shows.

Increased broadband penetration and download speed are only likely to accelerate the trend for on-demand viewing. Channel 4 chief executive Andy Duncan recently forecast that by 2016 ‘the majority of all programmes will be consumed in an on-demand way, whether through personal video recorders or video-on-demand over the Internet’. As the boom in search-based advertising on the Internet has proved, if advertisers are sure that they are accurately, targeting a receptive audience they will pay a huge premium. Meanwhile event television, which viewers will tune on to watch live, and could be anything from the World Cup to Dancing on Ice will become increasingly vital.

As a result of these trends the amount spent on traditional television advertising on the main channels is declining, while the amount spent on the web is booming. Advertising experts are agreed that brands will increasingly have to engage with individual consumers rather than hoping to catch their attention with traditional catch-all ads.