NEW YORK TV advertising is poised to change dramatically over the next decade, embracing the kind of targeting and user control already common on the Web, according to a new report by Forrester Research.
Forrester lays out a decade-long evolution that will ultimately result in most programming delivered on-demand with targeted ad messages based on location and behavior, along with community functions.
This "Personal TV," as Forrester calls it, would also deliver a Web-like experience for consumers, with a portal-like menu of programming options and search functions.
Forrester sees this shift giving TV an opportunity to remain the dominant ad medium it is today. While a personalized offering would seem geared toward further audience fragmentation, Forrester anticipates systems that would allow advertisers to reach mass audiences in a targeted manner. What's more, cable companies, with subscribers' billing histories, know more about users than Web companies. Ultimately, TV will work like the Web, enabling viewers to interact with ads up to the point of purchase.
"The players here are the people who own the popular programs and then the distributors who have digital systems capable of serving programs into set top boxes," said David Graves, the report's author.
That hasn't stopped Web giants such as Google and Microsoft from trying to break into the medium and extend their reach across TV advertising. Google is placing ads through Echostar's Dish Network and Microsoft has plans to build an ad network after buying Navic Networks.
In the near term, Forrester expects experimentation in video on-demand offerings by cable companies, like CBS's CSI on Comcast that includes ads that cannot be skipped.
Forrester predicts that in 2010, targeting and on-demand programming systems will be up and running, before the big industry-wide shift takes place from 2012-18.
What's taken so long? Forrester spreads the blame across the TV landscape. Cable companies didn't build-out video on-demand as an ad-supported platform, networks protected the lucrative status quo and agencies didn't push for innovation.