Connected TV brings new video ad opportunities
Technology companies are seeking a foothold in the television advertising market. According to an article in the Wall Street Journal, technology companies are looking to offer ads on their connected-TV services – TiVo and Microsoft have both released ad products linked to broadband-video services (which are designed to be accessed via internet-enabled televisions as opposed to online).
Google is also looking at ways to sell ads through its new Google TV software, while Sony and other hardware manufacturers are also hoping to get in on the action.
At MGEITF, Google’s Jill Szuchmacher said the company wasn’t looking to put ads on its service just yet. Google’s main aim is to create more search revenue initially, although once they have a “critical mass” of users, the focus may change.
Sony, however, is considering selling video ads that play before premium content that consumers will be able to access via their new connected-TV sets.
Yahoo! is also adapting its internet-ad technology to display ads that run alongside videos displayed on TV screens, according to the WSJ. Another article from Online Video Insider suggests that Yahoo!’s only hope of achieving its latest target – 1 billion users and $10 billion in annual revenues by 2014, will have to come through video advertising.
In the US, online video advertising was a $1 billion industry in 2009, according to eMarketer. That number is expected to grow 49% this year and will hit $5.5 billion in 2014. Globally, online video advertising will represent a $10 billion industry, the article says.
Yahoo! may have a decent chance – online video held its own during the recession and has outgrown everything else, including search and social media. Although in the past, technology companies have struggled to generate more than modest ad revenues when it comes to television, this could all change, with “tech companies looking for new ad possibilities created by delivering video directly to TV sets over the web”, WSJ writes.
The new opportunity is targeted ads based on what viewers watch and the searches they do via internet-enabled televisions, which has been dubbed the next big thing by many TV commentators, including informitv’s William Cooper.
Apparently, cable and satellite companies are also testing new technology to target ads, along with new ad formats that will allow consumers to respond via a remote control.
If technology companies get video ad services right, and internet-enabled television takes off as predicted, there may well be more television ad revenue to go around. Last year, TV accounted for nearly 36% of the $148.3 billion US ad market, according to Zenith. TV ad revenues are forecast to grow 3.8% to $55.8 billion this year. Meanwhile, in the UK, Magna forecasts an average of 3.6% gains each year through to 2015 for the television industry.