Advertising & Technology Collide

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 behavior as well as business behavior, which in turn changes competitiveness and business models. Failure to adapt to changing technology and user behavior 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 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?

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.

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 behavior as well as business behavior, which in turn changes competitiveness and business models. Failure to adapt to changing technology and user behavior 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 behavior. 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, MultiMedia Intelligence has 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. MultiMedia Intelligence believes 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?