Where Are TV and Video Advertising Headed? My 10 Bets for 2020
At a small industry event last week, I led a talk about the future of TV and video advertising in the U.S. over the next five to 10 years. Rather than just talking about emerging trends and leaving it there, I decided to offer up some specific predictions. As a startup guy, my job is to make bets and try to build businesses in advance of markets, or at least contemporaneously to their development. While it can be a bit perilous to go public with predictions, it can also be fun, so here are my "bets" on what the world of TV and video advertising will look in 2020:
1. Web-driven ubiquity. Television's history has been defined by constrained distribution, but that 's about to change. Broadcast defined its development of sight, sound and motion programming and adverting delivered in virtually every home in America. Analog cable expanded the product in breadth and depth. Digital cable amplified that expansion. And, later this decade, TV will enter the fourth and most disruptive phase of its development, web-driven ubiquity, when TV video will be "technically" freed from its legacy TV-dominated distribution constraints. By 2020, I believe that all television will be ubiquitous, on-demand and intelligent.
2. 30-40% more video consumption. The explosion in video availability will drive even more consumption. As hard as it may be to believe, I expect total video consumption will grow 30-40% over the next seven to eight years. How is that possible when the average American already watches four and one-half hours a day? Today, most video is consumed in the home, with smaller amounts in the office or in restaurants or bars. In the future, with more screens in more places, even today's time-constrained light TV viewers will be watching more.
3. TV device will still dominate viewing. Today, viewing on the TV represents 95-98% of all video consumption in the U.S. While it will lose some share to other devices, consumers' preference for the best available screens mean that "lean-back," TV-like devices will still capture the majority of viewing. My bet is 70%.
4. Multi-channel packages will still prevail. Contrary to the views of many, I don't believe that most TV viewing in 2020 will go a la carte. No, I expect that 70% of viewing will still be tied to multi-channel subscription packages from operators and networks. Consumers have always favored "packaging" in their media and the owners of the programming have way too many long-term business interests in doing deals with distributors who will "un-bundle" their products. However, I expect extraordinary disruption in this segment of the market and believe that 50% of the "bundlers" will be new.
5. Ad dollars follow video viewing and screen impact. Sight, sound and motion will continue to be unparalleled in its ability to create customers or reinforce loyalty, and it will only get better with more ubiquity, more content and better technology. Video will continue to dominate ad and marketing expenditures and, as web-like ad technologies transform its targeting and yield management, growing its efficiency and the number of advertisers using video.
6. TV "dog" wags smaller devices "tail" in campaign bundles. Not only will TV not lose its ad dollars to the web and small devices, but most of the digital video ad spend will be bundled with campaigns anchored on TV and controlled by TV media owners. Only a modest minority will be sold and packaged for stand-alone delivery on mobile, tablet, PC or ambient devices, though out-of -home video might be an exception. Assuming that they learn how to leverage it's digital capabilities, this will keep the TV media owners and media buyers in firm control of the digital video future.
7. Audience, not just content, becomes critical for advertising. Audience fragmentation, already a problem on TV today, becomes exponentially worse with the explosion of even more screens and more content. The ability to re-aggregate target audiences at scale becomes essential for all video media sellers and buyers. No longer is it just about putting ads in relevant content. It's about finding, packaging and delivering the right target audiences across tens of thousands of networks and shows too. Surviving and thriving in ever-increasing audience fragmentation is probably the biggest challenge today's media companies and marketers will have in finding success in 2020.
8. Audience data becomes indispensable. You can't find, package and deliver target audiences without having the data to do it. By 2020, 90+% of all video ad campaigns will be "data-denominated" -- packaged, sold, bought, optimized, measured or evaluated on granular data beyond impression, rating, GRP and demographic metrics. Media owners that underpin their content offerings with robust audience data capabilities will prosper. The same for marketers and their media agencies. Those who don't won't.
9. Exacting measurement and attribution reign. All video media and advertising will be measured and evaluated at the census level with attribution and return on investment analysis that far surpasses what we have today. Media that doesn't deliver great results at the right price will go away. The same for agencies, marketers and people not comfortable operating in that kind of environment.
10. Foresight trumps insight. With wide availability of census-level behavioral data and massive, predictive computing power, data leverage moves from insight to foresight and the power and margins in media will go to those companies who predict, create and exploit consumers' future behaviors. Companies and people not comfortable predicting the future and making successful bets on it won't last long.
These are my bets for the video ecosystem in 2020. Will they all come true? I don't know. However, they are the bets I made in launching Simulmedia, so at least my money is where my mouth is . What do you think 2020 will look like?
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