Abusaleh: The investment signals that there are big bets being
made by large cap companies in the over-the-top (OTT) and
vMVPD world. The risk could lead to further fragmentation and
time-shifted viewing but could also bring new opportunities to
marketers. It will also allow for more efficient audience targeting.
Besasie: There is no disputing the fact that these companies are
drawing viewership away from legacy TV. If the largest among
them, Netflix, begins to take advertising, media spend will flow
away from other platforms. This will lower demand on legacy
platforms which will be good for performance-based marketers.
Feinstein: In the near-term — one-to-three years — the decline
in traditional TV viewing will likely accelerate. The content delivered by these platforms won’t be the sole reason for this acceleration. They are instead a small component of an over-arching
trend in delivery technologies, and human expectations of how,
where and when to find entertainment, plus the unstoppable
force of advancing demographics.
There are so many legitimate question marks that speculating
on exactly what it means for TV advertisers is really a fruitless
venture, other than to say it will look quite different from today.
The biggest concerns will fall under scale and data-integration:
will the advances in technology be able to integrate into TV,
and the human psyche, enough to make small-scale use of TV
affordable for advertisers to use, while being profitable for those
who sell it?
Garnett: This area is one of my areas of concern. If primary viewer habits were to shift to viewing without advertising, then our
businesses and our clients would all suffer. The truth is, I think
the U.S. economy would suffer.
That said, there are serious questions about whether Netflix
can build the profits necessary to fund their extraordinarily high
levels of program development without recourse to advertising.
It’s the same with all the digital “let’s make programming” players like Amazon and Apple, as well.
What they never paid attention to is the reality that great
programming is quite costly. So far, only Netflix, HBO, Showtime, and more traditional players show they understand what it
takes to make a great show.
Koeppel: On-demand content that is not ad supported will
likely dilute viewership for content that is ad supported, but
it is entirely possible that once the likes of Netflix, Alphabet,
Amazon, etc., have viewers hooked on their water-cooler content, that ads may enter the mix. Recall that the beauty of the
cable model is that it replaced a single revenue-based business
model — broadcast television, supported by advertising — with
a dual-revenue-stream model whereby subscribers paid for content that also generated a secondary revenue stream in the form
That suggests that the public is willing to both pay to sub-
scribe to content and put up with advertising. So, for example, if
Amazon were to win the rights to the NFL, which has contracts
coming up for renewal, it may very well sell advertising in ad-
dition to charging for access to the content, which may or may
not remain a benefit of Prime membership.
Stacey: I wouldn’t want to be an owner of a television station
right now. TV is getting attacked from all sides, with both audiences and advertisers shifting their habits as the media landscape
changes around them.
How can digital marketing options hope to
match the scale that TV offers marketers? Or
is that merely a pipe-dream? If so, why?
Abusaleh: Currently, it is a bit of a pipe dream. The only way that
digital marketing can match the scale of TV is if the industry
goes through a massive consolidation so that there are major
hubs that agencies can go to and reach massive audiences.
Feinstein: Today? It’s a pipe-dream. Five years from now, it may
be less so. And in 20 years, scale in digital will be real, but it
won’t be easy to come by, even when dramatic consolidation
happens online… beyond Google and Facebook.
Garnett: It’s a pipe dream. When people are online, they are on
a mission — seeking something, reading something, browsing a
specific area, watching something. Because the web ad formats
are so incredibly invasive and easily avoidable, the person’s “
mission focus” makes it extraordinarily difficult to break through
with a message about a new idea, product, or service. That
means only a tiny number of attempts actually reach consumer
Koeppel: If you examine the shift in generational media usage
habits, eventually it is likely that what we consider a “TV audience” will simply be migrating to other devices creating a blur
and a new definition of what such an audience is. Aggregating
an audience of scale will therefore likely require buying eyeballs
across multiple platforms that include both TV and digital to
reach a sufficient critical mass of viewers.
Lee: Digital marketing options, such as streaming video, have
a chance to deliver mass audience appeal. All other digital-designed initiatives need TV, radio, print, and other channels as
a halo to drive to the web.
Stacey: Digital marketing offers scale already and is growing
daily. Differentiating between all these new media technologies
and methodologies really depends on what it is you are marketing and what your campaign objectives are.
For the complete and unabridged answers to the questions from our Advisory
Board, find the March issue online now at responsemagazine.com.