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Fragmentation Hits TV Advertisers, Platforms

2014 12 01   Peter Feinstein   The PI Blog    

You know, I’d rather just stick my head in the sand than talk about the effect data has begun to have on TV advertising, but a MediaPost article this week – “How Data Will Do To TV What the Internet Did To Computing” – got my mind on the topic again. I’ll keep my head up and, instead, just dip my big toe in the water because I don’t want to get bitten by the sharks.

Here is my take on data and its effect on TV, in viewership and advertising: It’s compromising both, making it all less valuable. We have virtually the same number of viewers consuming way more diverse video entertainment on dozens more “channels,” accessing all this stuff through a dozen or more devices. This makes ALL of them less valuable because none can claim the mass reach that broadcast and the largest cable networks still can – at least for the moment.

The general direction is toward increased fragmentation and dramatic devaluation of each media source in terms of the ability to produce a return on investment (ROI) for the advertiser. Television is in for a rough ride; it’s going to look like one big party as each new device, channel and show rolls out its advertising offerings – at least trying to do some of it programmatically – but I think that, in the end, those who continue to embrace the human-to-human experience will win the day – if not monetarily, then certainly in every other respect.