Advertising & Technology Collide: Semiconductor Companies, Technology Providers, Media Companies and Ad Agencies Partner to Move from Disruption to Monetization
MultiMedia Intelligence, September 2007, Pages: 64
Technology has played a key role in making things better, faster, and cheaper. However, technology has also been highly disruptive to the status quo. It changes user behaviour as well as business behaviour, which in turn changes competitiveness and business models. Failure to adapt to changing technology and user behaviour have has proven deadly for companies. The $185 Billion dollar TV advertising industry is now in technology’s cross-hairs. Collectively, the research has identified ‘new media advertising’ opportunities that include Internet advertising, Internet TV, IPTV advertising, mobile TV advertising and in-game advertising will collectively reach over US$31 billion by 2011.
Beyond these segments, a variety of potential advertising and branding models have remained un-exploited, largely because advertisers and media companies don’t fully understand the technology industry, and the technology industry doesn’t understand media and advertising. The report asserts that advertising and technology companies need to engage with companies that in the past they did not pay much attention to. If you are an advertisement agency executive, you need to be asking yourself: What are STMicroelectronics, Texas Instruments and Intel working on today that will enable my next opportunity? If you are a semiconductor or software company, you need to ask: How can my technology enable the next wave of digital advertising?
This report provides a perspective and analysis of the impact that new technologies will have on the advertising industry. It first examines why current advertising is becoming less effective and the role of the DVR. It then addresses the resulting impact on the “upfronts” and the impact on ratings providers such as Nielsen. Digital technologies, platforms and the impact on advertising will subsequently be examined. This includes such products as set-top boxes, PCs, game consoles, DVRs and portable devices. It will finish by discussing new and creative ways that advertisers can utilize core technologies and examining some of the new digital advertising opportunities, including Internet advertising, IPTV advertising, Internet TV, mobile TV advertising, and in-game advertising.
Executive Summary
Introduction
Current Advertising is Becoming Less Effective
The DVR: More Than Just Time Shifting
Beyond the Direct DVR Impact: Internet Connectivity in the Living Room
Media Overcomes DVR Threat Through Product Placement: Fox Entertainment’s ‘24’
Technology Changes “Upfront” Negotiations
Upfronts Were a Free-For-All in 2007
Hey Nielsen is Coming
Nielsen is not alone: Everstream Brings Measurement Tools
Digital Technologies: Why does this impact advertising?
Set Top Boxes
From Computers to IA
Game Consoles
Cell Phones
Other Electronic Device Platforms
Moral of the Story: Creating Mutual Benefit for Advertiser and Consumers
Opt In is a Winner
So Simple, Yet So Powerful: Leveraging Interactivity
Slacker Takes Interactivity to a New Level
Bringing Value to Advertisers Using Technology
Technology Trends & Predictions
Next Generation Alignment of Technology and Advertising
Brand Power
Advertising in Hardware
How is This Different
Volunteer for Advertising?
Implementing Advertising in Hardware
Perfect Possible Implementation: USB Flash Drive
NFC + Bluetooth + RFID = Location Based Advertisements.
Brand to Consumer, Marketing 1-to-1
NFC is Just One Option
Bluetooth
RFID
Leveraging RFID to Differentiate Products and Positioning: Guaranteed Wine
How Much is “Guaranteed Wine” Worth?
The Downside of Technology and Advertisers
Trying to Protect Consumer Data
Opt-In Subscribers Are a Requirement
New Digital Advertising Opportunities
Internet Advertising
Advertising Models in IPTV
IPTV Impacts a Variety of Companies across the Value Chain
Video Game Advertising: We Are a Long Way from Space Invaders
Mobile Handsets and Mobile Advertising
Mobile TV Advertising
Mobile TV Advertising Market Revenue
Internet TV offers immediate advertising potential
MultiMedia Intelligence Has Identified the Fourth Screen
In-store Displays for a Chain or Department Stores
POS is the Decision Point
TOC vs. ROI
Conclusion
Methodology
Technology has played a key role in making things better, faster, and cheaper. However, technology has also been highly disruptive to the status quo. It changes user behaviour as well as business behaviour, which in turn changes competitiveness and business models. Failure to adapt to changing technology and user behaviour have has proven deadly for companies. The $185 Billion dollar TV advertising industry is now in technology’s cross-hairs.
The traditional media industry is under assault from rapidly changing technology and user behaviour. The Digital Video Recorder (DVR) has empowered consumers and promising to cripple traditional TV advertising models. The Internet not only puts consumers in control of what and how they consume content, but also integrates community, participation and interactivity into the media experience. New advertising models are emerging on the Internet, on mobile devices, in video games, and on public displays.
Yet, the disruption on traditional media advertising models is still at its nascent stages. The largest advertising market, TV, is just beginning to feel the impact. Traditional content owners like music labels, studios, television affiliates, game publishers, and cable and satellite providers are being pulled into the new technology-driven world.
Media companies face a strategic choice of control versus reach. Syndicated and viral distribution of content via the Internet, social networks and user generated sites provides the broadest reach and empowers consumers. Yet, this model strips the control of media distribution from content owners and disrupts existing business models. Tightly controlled and narrow licensing of content for Internet distribution maintains control, but flies in the face of new consumer expectations. Media companies now have to examine both new and existing business models to evaluate what makes sense and what business models have run their course.
While technology is proving disruptive to traditional advertising and media business models, new opportunities abound.
YouTube and MySpace are drawing unique visitations that dwarf the Internet presence of established media properties. Google has captured the first wave of “Web 1.0” advertising via their successful search engine, and is targeting the “Web 2.0” advertising wave via their acquisition of YouTube and others. New markets for mobile advertising, Internet TV advertising, in-game advertising, and networked digital signage are emerging as well.
Collectively, we have identified ‘new media advertising’ opportunities that include Internet advertising, Internet TV, IPTV advertising, mobile TV advertising and in-game advertising will collectively reach almost US$41 billion by 2011.
Beyond these segments, a variety of potential advertising and branding models have remained un-exploited, largely because advertisers and media companies don’t fully understand the technology industry, and the technology industry doesn’t understand media and advertising. We believe advertising and technology companies need to engage with companies that in the past they didn’t pay much attention to. If you are an advertisement agency executive you need to be asking yourself: What are STMicroelectronics, Texas Instruments and Intel working on today that will enable my next opportunity? If you are a semiconductor or software company, you need to ask: How can my technology enable the next wave of digital advertising?
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-ADB
-Google
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