The Sky is Falling!!

Just kidding though it is raining today…

It seems the general advertising community is finally waking up to realize that aside from how ridiculous the ability to track return on investment is and that ratings are basically bogus, consumers are getting away from them as well thanks to technology. We’ll see what happens next as more money moves to iTV applications (eventually), interaction online advertising, and one would think… integrated direct marketing.

Spending just can’t happen without some real understanding of what happens next. You’ve got to attribute marketing dollars against what channels enable better and more profitable customers. I believe the mass brands actually have the greatest challenge to overcome in this newer world as they are not accustomed to limiting the scope of their message to people who might be more interested rather than anyone who might just happen to be watching.

Here’s an extract from Cnet on the latest from Forrester Research

The premise of the report is that digital video recorders (DVRs) like TiVo that let TV viewers record programming and skip over commercials easily, will be in 30 million homes within the next five years, up from an estimated 3 million today. That has national advertisers considering their options, given the expectation that DVRs will undermine the potency of commercials. It also has them resigned to spending more on advertising in the future, only to reach fewer people.

At least three-fourths of the 55 national advertisers Forrester surveyed said they will cut spending on commercials as a result. Of those, 63 percent plan to reduce spending by 20 percent or more. A majority said they will first scale back national cable ads, followed by national network ads, local spots and local cable ads.

More than 90 percent of advertisers also want new measurements for advertising ratings and program viewing. They say the TV industry will need to report audience measurements outside classical benchmarks like “reach” (for number of people reached) and “frequency” (for how often they see an ad).

Advertisers called on TV programmers to work with device manufacturers and cable companies on DVR features that can help spur innovation and measurement in the marketplace, the report found. Three-fourths of advertisers also believe that they will have to begin creating content and programming to invigorate their brand campaigns.

In addition, advertisers plan to shift their money to other media. Nearly half of advertisers said they will transfer dollars to other traditional media, including magazines and radio, in which ads aren’t as easily skipped.

Three-fourths of advertisers surveyed said they will boost budgets for the Internet, including banner ads and rich-media spots. Fifty-three percent said they will invest in search engine marketing, which lets advertisers track and measure the effectiveness of their campaigns.

A majority of national advertisers expect other forms of TV ads to evolve and become more effective than the status quo, according to the report. Targeted TV advertising to specific households is on the horizon, too, drawing interest from at least half of those surveyed. DVRs are ultimately designed to make it easier to track people’s interests and demographics for targeted advertising. A handful of advertisers say they would pay a premium for those capabilities. [CNET]

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