Blog

Leaping the Divide

01 April 2014 | Blog

To hear some in the digital community talk, you would think that at some point in the near future, digital will completely engulf TV.

To be fair, digital ad spend is definitely growing. Because of the way that many brands’ marketing departments are set up in siloes, digital is often directly competing with TV for ad dollars. There are some who argue that because of some of the advantages digital offers—targeting, ability to report and change in real time, not having to buy best inventory at upfronts, programmatic buying—digital advertising will eventually take all the money from TV. (Never mind that a lot of these capabilities are now available on TV, too—that’s another article.)

The truth is, as long as digital and TV are two separate things, this isn’t going to happen. People still spend more time watching video on linear TV than anywhere else. People also trust TV ads more. TV still has the best reach available, and so advertisers are still going to give it an enormous share of the budget.

So if digital isn’t going to subsume TV, what do we mean by the digital/TV convergence? Something a little more subtle, and a lot more interesting.

Digital/TV convergeunplugged cablesnce is probably going to happen in two stages (and people mean two things when they’re talking about it). The first stage is an acknowledgement that a video is a video, no matter what platform it’s on—it’s the convergence of digital and TV advertising. We’re seeing this happen right now, where more and more advertisers are demanding that their ads become “unsiloed”—that their digital and TV campaigns be planned together as part of the same process. For this to really work, digital and TV advertising needs to become more similar—the planning, buying, and execution processes need to converge and metrics need to be agreed upon. So whether digital needs to start thinking in GRPs or TV has to start thinking in impressions (or more likely, a combination), eventually what needs to happen is that advertisers will simply create a video ad which is then aired on a variety of platforms, through one interface that forecasts, plans, buys, executes, and reports on all viewings no matter where they occur.

We’re starting to see this with stuff like the formation of the Magna Consortium last fall. Companies like FreeWheel are trying to make web video more TV-like; companies like Visible World are trying to make TV video more web-like. Eventually a brand may be able to go to agencies like the Magna Consortium and place an order for a video to get a certain reach and frequency, and that will then be executed across web, TV, and mobile, the same way putting an order with a cable company now might get executed across multiple networks and dayparts to fulfill the order.

The second stage is when the difference between TV and digital becomes meaningless to the consumer as well. When you might have different sized screens, but they all basically do the same functions and you can toss things back and forth between your watch, your glasses, your tablet, and the giant screen on your wall. That will be pretty cool, but we’re still a long way from there.

Where does cord-cutting fit into all of this? Cord-cutting started happening because of the fact that TV and digital are getting close but haven’t actually touched yet. A few hardy souls decided to leap the gap. There are two possible reasons. One is that people are doing things online instead of watching TV—spending that time on Facebook or YouTube. The other is that they’re still watching TV programming, just through online resources—Netflix, Hulu, etc. The thing is, it’s not happening all that much. When people get internet, they often even increase the amount of TV they watch instead of decreasing it. And for all that people have been timeshifting TV and streaming, it’s actually a relatively small percentage. The vast amount of TV is watched linearly. So while cord-cutters are a little ahead of the curve, there aren’t that many of them, the number isn’t actually increasing by all that much, and eventually that gap will close and they’ll just be reabsorbed into the rest.

In any cases, though, this is not so much about one medium taking over the other than it is about two mediums taking on the strongest characteristics of each other until we are left with something better than either for both viewers and advertisers. It’s an exciting thing to watch, but there’s still a lot of work to be done before it can happen. And we’re excited to be a part of that effort.