That prediction is being whispered in the corridors of ad agencies, in TV network hallways and in the meeting rooms of blue-chip advertisers.
It is a prediction based on certain statistics and trends. For instance, an Advertising Age study found that the top 100 advertisers shifted $1 billion last year from TV and newspapers to the web. In addition, experts estimate that 40% of households will have DVR capabilities by 2012, making it easy for viewers to watch programs without having to watch commercials. And market-research firm Outsell recently reported that online advertising this year is expected to increase 12.3% and reach $105.3 billion, exceeding the combined amount spent on radio and TV advertising for the first time.
New breed of commercial
So is the TV commercial doomed? Not at all. Contrary to these statistics, certain types of commercials are healthier than they've ever been. Ten years from now, traditional 30-second, brand-building, network spots may be scarce, but we're going to see a new breed of commercial -- a breed that is more measurable, flexible and targeted than what we're used to.
Yet industry observers are quick to tar all TV commercials with the same brush. They envision a time in the not-too-distant future when all stations will be supported solely by subscribers and other ancillary income sources.
The problem is that these industry observers are mistaking an evolution in viewer advertising attitudes for a revolution. People have always complained about commercials and sometimes muted the sound when they air. But they also have accepted ads as the price they pay for their favorite programming. There's no evidence that this is changing. Huge numbers of people still watch their favorite network programs, sporting events and talk shows in "real" time and sit through the commercials. An unwritten pact exists between viewers and advertisers: You give us good programs, and we'll accept a certain amount of advertising.
This pact will remain in place in the future, though with modifications. Viewers have more leverage than ever before. They can watch commercial-free cable stations, zap commercials and download programs commercial-free to various hand-held electronic devices.
As the balance of power shifts, so too will the types of commercials that air. As TV becomes a much more individualized, responsive medium, commercials will follow suit. Thirty-second network "glamour" spots were perfect for a mass medium. As TV becomes more specialized and as individual viewers exercise greater power over what is viewed, we're going to see more direct-response commercials, more spots designed to lead viewers to websites and more viewer-controlled advertising.
If you look closely at emerging trends in TV advertising, you'll find that many of these the predictions are already taking shape. Even a casual observer will notice that a much greater variety of spots exist now than 10 years ago: longer-length spots for package goods, a continuing expansion of direct-to-consumer pharmaceutical commercials, a boom in direct-response, high-ticket offers for cars and travel, and a growing number of not-for-profits taking advantage of TV's fundraising power. If you look a bit more closely, you'll also notice that more commercials point viewers to websites where they can watch infomercials, find tech specs or request a sales call.
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Convergence technology will increase viewer control to the point where people may be given options: Choose among 10 commercials, each for a different type of car. Or the choice may be among a car commercial, a spot for a piece of athletic equipment and one for an airline.
Three key advantages
If you still believe that TV advertising is on the verge of extinction, consider three key advantages it has over advertising on websites and other new media.
First, it partners well with telemarketers. Viewers are accustomed to calling an 800 number after seeing a direct-response commercial. They want to talk to a knowledgeable human being. It is a well-conditioned reflex, one that doesn't work nearly as effectively on websites. Browsing is an internet term, and that is exactly what people do when they visit a website. Sites have not yet developed a similarly effective response mechanism.
Second, commercials on TV have more impact than commercials that run in the new media. A larger screen and a superior sound system allow commercials to have a much greater impact on viewers than with the smaller screens and poorer sound of many computers, smartphones, etc.
Third, people don't zap most commercials. DVRs are used primarily for top-rated network programs. The vast majority of TV programming -- reruns, older movies, talk shows and so on -- isn't recorded by most people. On top of that, a majority of viewers use DVRs infrequently or not at all. TV remains a passive medium. Most people prefer to sit there and watch rather than "do" anything, even if technology makes it simple to do away with commercials.
Rather than make the argument that TV advertising is dying, a better argument is that TV advertising is changing. It is morphing into a much more specialized, responsive strategy than in the past, and for advertisers that pick up on this trend, it will be a more effective strategy than ever before.