Decoded: What advertising on television means for today’s empowered consumer

Published: November 30, 2018 2:10:14 AM

What advertising on television means for today’s empowered consumer

advertising, advertising on television, Netflix, TV advertising, online advertisingDigitisation in the TV business has led marketers to analyse why consumers skip ads during a commercial break.

By, Harikesh Nair

Remember when watching TV meant that half your viewing time was taken up by advertisements? That may well be changing. Today, in the age of Netflix, it is the consumer who is reinventing TV advertising. Armed with choice, viewers can skip commercials that don’t hold their interest. However, this doesn’t spell doom for advertisers. By leveraging digital technology to target individuals who are more inclined to buy their products, marketers are creating a win-win situation. While companies can reach out to specific consumers who are less likely to skip an ad, the latter don’t seem to be in a rush to tune out. That is the power of ‘addressable’ TV advertising, which is now entering our living rooms.

How your TV is ‘watching’ you

With consumers increasingly distracted, marketers are getting creative — video on demand, targeted online advertising and TV content delivered via IP-enabled devices are emerging formats through which viewers engage with ads on their own terms.

However, interactive ads and predictive analytics give capabilities to your television to track your viewing history. This strategically targeted approach could be a potential game changer for big brands that advertise on TV, as they now have access to a ‘goldmine’ of data on viewership consumption patterns. For example: can companies link product purchases made by households to the television advertisements they watch?

Looking at the data, things might not work exactly in the way you imagined. Consumers are less prone to skip ads when the household has purchased more of the advertised brand. Therefore, targeting consumers who do not skip ads implicitly helps a marketer find customers who purchase more of the brand.

Such correlations help marketers understand product consumption trends, customise content to suit consumers’ specific needs and improve a company’s ROI. This drives customer acquisition strategies that shape the brand’s identity.

The future of advertising

The way things are headed, AI-led predictive technology will help ads evolve to become a treasure trove of content that will benefit consumers. Those seeking a more personalised experience will embrace the fast-changing digital landscape that connects them with brands in more meaningful ways.

As technology blurs the line between TV and internet, marketers are progressively using it to increase the impact of their advertising buck. After all, targeted ads can help companies turn a profit. And in a world of fickle viewers, it pays if tech-savvy marketers become more consumer-centric and serve ads to the right audience.

Digitisation in the TV business has led marketers to analyse why consumers skip ads during a commercial break. A telling aspect of today’s advertising scene is consumer empowerment. With ‘addressable’ televisions and ad blocking technology, modern consumers are free to cry foul if they are served sub-standard ad content.

Superlative storytelling makes for memorable ads. Since we can now be picky about the ads we watch, marketers should offer us something of value. For this reason, we believe advertising should be treated as a good, a product, like any other. Clearly, advertising is no longer a necessary evil that must be consumed.

The author is the Jonathan B Lovelace Professor of Marketing, Stanford GSB

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