A new study from Interpublic's Magna concludes that "advanced TV" advertising in the U.S. has been a "missed opportunity for many years," while forecasting "modest growth starting in 2010."
Magna defines the segment as Video on Demand; telescoping; long-form showcases; DVR, interactive program guide and addressable advertising; creative versioning and advanced trafficking systems.
Spending will be basically flat across those segments this year. However, as the industry takes steps to improve the advanced TV infrastructure, Magna expect $168 million in overall segment advertising by the end of 2010. (Download a complete copy of the report authored by Magna's chief forecaster Brian Weiser.)
Growth has been curbed in part by the "balkanized nature of the cable and satellite industry's advertising infrastructure. This produces a chicken-and-egg problem of limited media investment without better infrastructure and content [and] limited infrastructure and content without more media investment," Magna said.
Agencies and their clients have expressed frustration with the slow pace at which the industry has scaled advanced TV platforms. "Personally I'm tired of testing this," said OMD's Chris Geraci managing director, national broadcast, Omnicom's OMD, at the Mediaweek Upfront Conference in New York last month. "It's gone on too long."
At the same conference, Kris Magel, evp, director of national broadcast, IPG's Initiative, said that clients must also take action: "If clients don't start dropping millions into it, it's never going anywhere."
VOD remains the largest component of advanced TV, accounting for half of all sales in the sector, Magna reports. It cited Comcast as the industry leader. That company's 17 million subscriber homes consume 150 million hours of VOD content per month over approximately 300 million VOD assets. Magna said that "likely equates" to over 3 percent of total TV viewing in the footprint, and "by our estimates, accounts for approximately 18 VOD streams per VOD subscriber per month."
Magna said that Canoe Ventures, the joint effort of top cable operators that is creating a national advanced TV platform "is a significant wild card in our forecast, given varying logistical and political challenges," that the venture faces. "Nonetheless, we expect Canoe and related efforts to contribute modestly to overall sector growth over the next few years."