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Digital Video: Television's Friend or Foe?

Digital video is, to put it mildly, a very hot topic in the online and mobile advertising industry. Recently, moves by digital video companies have placed them in direct competition with television. Let me explain. Companies like Hulu and Netflix have created a model to view content previously reserved for larger screens, be they television or theater. YouTube, the largest video viewing service, recently broke their service into channels with original content. Two different models, both focused on gaining eyeballs at the expense of television or as additional time spent viewing content by consumers.

One of those models helps users discover shows they may not have seen before, by offering suggestions and posting "popular" clips/shows in prominent places on their websites, a la Hulu and Netflix. Others like YouTube are touting channels with original programming. The question this elicits is what does all this mean for television? The first thought is television erosion. The second thought, is that it may speed up the networks' entrance into cross platform deals. Will shows eventually be shown "live" via online streaming, along with the original TV airing? Based on the information gathered from the reporting of the New Front 2012 Conference from Ad Exchanger, where we heard "the TV is just another screen," and found out more about Yahoo's deal with ABC to produce and air a Tom Hanks backed original program on the Yahoo! video network, it would seem there is a 'frienemy' situation happening.

Outside of big events and huge shows, the value of the national TV ad buy will continue to decrease as online portals and channels fragment the video market. The consumer's idea of content anywhere, on any platform at any time will become increasingly acceptable and expected. Networks will eventually acquiesce so they don't see a decrease in viewership but will likely realize lower ad profits in the beginning. Cable networks are digging their heels in, probably to their own detriment. And bringing up the rear, per usual, will be ad dollars. I say this half tongue-in-cheek because I don't want to see the same thing happen to the automotive advertising industry that happened in social media and display advertising when it became obvious they were going to rapidly grow. In case you were wondering what happened, we were left behind in the beginning, ceding valuable learning time and opportunities to take advantage.

Here's a particularly artistic video from Ford that has shown up online, as well as on television. Branding such as this will be key for brands to make content transferable on all screens. More entries such as this, properly placed in front of the right audiences with good data will make the digital video medium very relevant and dangerous to television.

Lastly, due to entrenchment, it has taken longer for digital video to take hold and find a business model, but the train has left the station and it is obvious that online media entities are not slowing their engines. It will happen soon, and where will your ad dollars be? Already, we've seen that targeting audiences, with data, in display has been very effective. The same will be true in digital video, if not more so. Plus, video is great for branding campaigns where analysis is easier than on television...where there is (almost) no analysis. Ergo, for the ad industry, digital video is a friend. For the traditional television industry it's a mixed bag, but they better cozy up and make a new buddy because content is increasingly platform agnostic and it's clear that diversification is the new normal.

What say you, about the future of digital video's affect on TV ad dollars? Pontificators welcome!

Posted by Therran Oliphant, Product Marketing Manager, Polk (05.08.2012)

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