The scale of television means it continues to be a vital channel for advertisers, and while it may not always be traditional, linear broadcast TV, advertising will remain central to the business model, an industry figure has argued.
“You hear that lazy headline – ‘TV is dead’ – but we think it’s complete nonsense,” Simon Andrews, managing director of The Media Kitchen agency, told the recent VidCon London conference.
“TV has never been healthier than it is now,” he averred. (For more, read WARC’s report: The future of TV? It’ll be ad-funded, stupid.)
That assessment is based on recent M&A activity and the huge sums the likes of Amazon and Netflix are pouring into developing TV content. “Different parts of the ecosystem [are] deciding they want to play in television,” Andrews said.
“In television, they have fantastic content and great brand relationships. In digital, you have the ability to be very targeted. AT&T is a phone company that would like content to push down its bandwidth to its subscribers. Disney would like a bigger reach. As those come together, we start to benefit from both.”
Andrews acknowledged the rise of cord-cutting in the US and a decline in adspend on traditional linear TV (read more in: Global Ad Trends: TV at a crossroads), as investment is redirected into digital and mobile channels, but maintained that television will continue to be primarily ad-funded rather than subscription based as the digital giants move into this territory.
“The vast majority of Google and Facebook’s revenue comes from advertising,” Andrews pointed out “Apple doesn’t play in advertising, other than with the App Store, but we think they’ll come into it. Amazon is a retail business, but they’ve realised they can sell advertising on the Amazon site.
“These companies like the idea of advertising revenue, and we think they’ll bring that into what they do in television.”
New ad models are emerging – including product placement deals and embedded brand content – which Andrews believes will sustain ad-funded TV for another generation.
“The golden years are back,” he declared. “It’s a fantastic time to be in television – platforms are going to do very well, consumers are going to do very well, and the advertiser is going to fund all that.”
Sourced from WARC