The future of television advertising

Fred Wilson and John Battelle have some interesting posts on the future of television and advertising. Fred and John both seem to believe that the concept of paid search will eventually work its way into television advertising. I suggest reading their posts if you have an interest in this space and learning how it will change as PVRs, VOD, and HDTV further penetrate the market. While one can look at how the success of Internet advertising will work its way into the television especially as the two markets converge, I like to look at the $60 billion spent on cable and television advertising another way. Rather than assume it will all go away in the future, why not do something to make it more effective today? What if you could change and personalize the actual commercials to turn television and cable advertising from a mass market media to a one-to-one relationship? Recently, Businss 2.0 (sorry registration required-hey Business 2, when are you going to open yourself up for bloggers to generate traffic for you?) had a nice article about one of my portfolio companies, Visible World, which has the technology that allows advertisers to do just that. As per the article,

Instead of making a single ad, the agency can now create its 30 second stories as a sequence of swappable components using Visible World software. The file is then sent to servers, already installed at Comcast’s cable centers, which instantly assembles hundreds or even thousands of different versions of the ad and send them to particular groups of viewers. The ads can be updated or modified automatically, just like a website. “In the winter, an airline ad could say, “It’s 52 degrees warmer in Miami today, ” Haberman tells the group, “Or an ad for a limited-editiion Volkswagen Beetle could say there are only 392 cars left, creating a sense of urgency.

I encourage you to try the demo to customize a few ads on your own. Username is Business2 and password is visibleworld. The bet is that a more effective and more personalized advertisement will stop some viewers from hitting the fast forward button on their PVR remote. The good news is that Visible World has already worked with some blue-chip companies like Bank of America, Ford, and United Airliness. In addition, via deals with cable companies like Comcast, Visible World will be able to reach 30 million households by the end of 2004.

Comcast says it can direct ads to narrow zones of 1,000 to 20,000 homes in a growing number of cities, including Boston, Chicago, Dallas, Detroit, Miami, and Phildelphia. But to Haberman, that’s just the beginning. Within the next 2 years, he to offer advertisers the ultimate prize: targeting ads to individual households based on criteria such as age, marital status, favorite leisure activities, preferred airlines, and credit cards–though understandably, this very notion raises delicate privacy issues that have yet to be negotiated.

The cool part of this comes when the Internet and television actually do merge to create true interactive television and direct response fulfillment. Imagine its winter and you see the same customized airline ad about Miami, it’s 52 degrees warmer there, and you can take advantage of a special vacation package by clicking a URL and purchasing the plan through your television? We are clearly not there yet, but the potential exists. And before the $60 billion of television and cable advertising moves somewhere else, I hope advertisers give Visible World a shot to make the medium more effective.

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