In 2013, TV advertising campaigns changed forever. Streaming video commercials will be an integrated part of the TV ad campaigns from now on. $1 Billion in national TV advertising will move online every year going forward.

1. TV Advertising’s
Inflection Point
2013 is the year that “video neutrality” tipped from
an insidious trend to a full scale change in the way
that TV advertising campaigns are managed.
October 1, 2013

2. Strategic Inflection Points
and the Insidious Trends that create them
“Strategic inflection points can be
caused by technological change…they
are full scale changes in the way
business is conducted.
They build up so insidiously that you
may have a hard time putting your
finger on what has changed, yet you
know that something has.”
Andrew Grove

3. 2013:
The Buy Side

4. 2013:
The Sell Side

5. Insidious Trend #1
Untethered TV Viewing
• May 20, 2004, Fox ordered 35 new episodes of Family Guy, marking the first revival of a
television show based on DVD sales.

6. Video Enabled Devices
Source: MANGA Global/IPG Media Lab “Are All Screens Created Equal”, Sept 2012

7. TV Viewing Inflection Point
• Most consumers now think of “television” as a type of
content, not a type of hardware.

8. Insidious Trend #2
Commercial Avoidance
• Super Bowl 1987: Harvey Schultz, commissioner of the New York City Department of
Environmental Protection, issued a "bowl warning" urging Super Bowl viewers to stagger
their trips to the bathroom so as not to put too much of a strain on the city's water system.

9. Insidious Trend #2
The subscriber supplants national advertising as the more
important revenue stream for “traditional” Television.
• An insidious trend that began with the birth of cable TV has tipped the national television
industry away from a dependency on advertisers towards a business built to super-serve the
subscriber.
$97BCable Operator Revenues: 2011
Source: SNL Kagan
SUBSCRIBER
$54B
Nat’l TV AD REVENUE
Source: Kantar
0%
50%
75%
100%
1980 1990 2000 2010 ----- 2012
25%

10. Smart TV Inflection Point
• The screen in the family room is bigger and better than ever…
but each insidious development in viewing technologies has
made commercial avoidance easier.

11. Insidious Trend #3
The empowerment of the Viewer
• 1992: Bruce Springsteen releases “57 Channels (And Nothin’ On)”
• 2006: Broadband passes 50% of US households and Google buys
YouTube
Media Fragmentation Infinite Choice, On-demand

12. Inflection Point: “Quality” Content
On TV: The Experts Decide Online: The Consumers Decide
• YouTube video content uploading = 48 hours/second
• Gangnam Style was uploaded 7/15/12 - It has 1.7 Billion views in one year!
• The definition of “Quality Programming” is evolving away from the studios
and into the hands of the consumer.

13. Insidious Trend #4
Online video learns to super-serve the needs of brand advertisers.
• Great Creative Plus Scale Drives the Inflection Point
• Online ads reached more than half of the US Population in June 2013. According
to comScore, 183 million Americans watched 44 billion streaming videos this past
June. While doing so, they also watched 20 billion video ads.

14. Insidious Trend #5: Media Research
• February 2013: The dominant leader in TV audience
research publishes a study* that recommends
moving ~15% of the TV budget online.
http://www.iab.net/media/file/Digital-Video-and-TV-Advertising-Viewing-Budget-Share-Shift-and-Effectiveness.pdf
*

15. | TV’s Inflection Point 15
Nielsen People Meters
for TV
Nielsen OCR for Online
Total GRPs
Inflection Point: Nielsen “OCR” Data
Finally – a common language for audience metrics and ratings!
• Brand advertisers can integrate their TV and online video budgets without a break
down in the process for estimating media weight levels.
+

16. The Digerati’s Inflection Point
New Respect for TV Advertising Strategies
TV benefits from the GRP which
has $70 billion in spend behind it.
“It’s our job as the digital
industry to upset that balance
and look for something better.”
Greg Stuart in 2007 Randy Kilgore in 2013
“We need to
reposition digital from
a DR metrics business
to one that can build
powerful brands.”

17. Four Predictions
The Other Side of TV’s Inflection Point
1. Each year going forward, $1B of National TV
ad spending will move to streaming video.
2. Marketers will ask Broadcast Negotiators to
be on-point for video neutral campaigns.
– Ad agencies have a short window to get this right.
3. Online Video will be programmatic but will
not spiral down into the RTB hole.
4. Commercial avoidance on TV will accelerate
spending shifts towards online video.

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