July 15, 2010

IPTV Series: Segmented Advertising


Hostway Team

By Monique Martin

The traditional TV advertising model is expensive and increasingly ineffective. While the bulk of ad revenue still flows through TV, changes in the landscape are making it more difficult than ever. The explosion of channel options and the increase in DVR usage are complicating and diffusing the effectiveness of old school TV advertising. Sure, the big boys still use it for branding, but what can a smaller business do? Enter IPTV.

IPTV is the marriage of Internet and television. Using existing broadband and fiber optics, companies are offering IPTV subscriptions. Services like AT&T’s U-verse and soon to be released Google TV give viewers an interactive television experience.

What IPTV Means for Your Business

In a word, advertising. With IPTV, information flows in two directions — to and from the viewer. Viewers can get additional statistics if they’re watching a sports program or join live chats to discuss their favorite reality TV show villain. And, the broadcaster gets a little something too. Data and lots of it.

Tracking return on investment (ROI) for traditional media (print and TV ads) has never been easy. How many people actually saw it? Who were they? There’s also a huge disconnect between the event (the reader or viewer seeing the ad) and the potential purchase. But, on the Internet, it’s a different game. Advertisers get granular information about their customers, served up in real time. And, the obstacles between ad and purchase are minimal.

The incredible amount of data the Internet captures allows businesses to target their ads more efficiently. If you have a Google Analytics or Urchin account, you know the power of data. Narrowing the focus of your ads is much more effective than traditional “blunderbuss” advertising. If you’ve done any segmented ad campaigns, you know first hand the value of approaching customers in a targeted way. This “narrowcasting” is just part of what IPTV can potentially offer.

As Seen on IPTV

IPTV offers advertisers a new way to target, engage and capture consumers. It offers new opportunities for ad placement: At start up, traditional banners or marquees, screensavers, buffers and bumpers, or dynamically in-stream. IPTV also offers TV advertisers, for the first time, detailed analytics to create targeted, relevant ads.

IPTV combines the immersive nature of TV with the immediacy and customization of the Internet. Intelligent ad insertion platforms can track user preferences and behavior and serve up relevant ads.

Imagine you sell sporting goods. Your customers are families (little league), singles (fitness gear) and retirees (golf). You could create three commercials and each would only be shown to the users whose profile fit your ad. The retiree will see the golf commercial, while his neighbor, the young single woman, sees an ad for your Pilates mats. That’s just part of the potential power for segmenting that IPTV offers.

IPTV is still in its infancy and a lot of the potential is still merely theoretical, but it’s coming. And, with it, a whole new world of advertising opportunities is coming too.

IPTV Series: Introduction
IPTV Series: What is Google TV?
IPTV Series: Segmented Advertising

About the Author

Monique Martin served as chief operating officer for a successful online insurance marketing firm for five years.

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