[opendtv] Re: Bank Projects Broadcast Growth in 2010

At 9:30 AM -0600 11/2/09, Manfredi, Albert E wrote:

Craig Birkmaier wrote:


 Rather than stopping to watch the occasionally interesting ad,
 wouldn't you prefer to watch one or two short ads that are targeted
 to you, then the entire program UNINTERUPTED?


Of course, but I don't think that's an option. For ad-supported TV, that is.
Even the 5 or so 30-second ad interruptions you see now in the Internet-delivered TV programs do not provide the networks as much revenue as the ads on the regular stream. And I expect the cost of creating a new ad, for each time you are interrupted by an ad, would be prohibitive.
It is starting to become an option in the cable universe, and it is likely to be the foundation of advertiser supported TV via the Web.
The issue is not the number of ads, or that they are completely customized for you, although this IS a possibility. The issue is how much an advertiser is willing to pay for an ad to a qualified prospect. Your eyeballs are worth about 25 cents per half hour to the TV networks; that is, that's about how much ad revenue they generate per viewer. If an advertiser is willing to pay a quarter to deliver a message to Bert, then you could watch a half hour of programming without interruption.
With Red Box, this is probably comparable - i.e. you rent a movie for a buck and typically several people watch it.
So the economics say that when it is possible to deliver an ad to a targeted prospect, it is likely that the advertiser will opt for the targeted ad. There is, however, one exception - "shotgun TV advertising" is very effective in making large groups of people aware of something new that they might or might not be in the market for. But one a product is established, it is all about stimulating demand among people who are viable prospects, and this is where targeting adds value. 

Regards
Craig


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