TV Biz Must Evolve With Ad Technology

Advertising from a technical perspective may be evolving rapidly, but the advertising business model, and broadcasters’ focus on digital advertising possibilities, isn’t changing fast enough to adapt.

That was the sentiment — really the call to arms — proclaimed by Ashley Swartz, Digitas SVP, marketing, and leader of its iTV practice, during a panel discussion on advanced advertising at NAB Tuesday.

“Everything around advertising has changed, every medium — the Internet, social, mobile. That being said, the advertising agency model … has not changed,” Swartz said. “Bread is still buttered for networks by the TV units.”

There’s long been an industry standard for measuring the value of TV ads. Despite the tracking and interactivity capabilities with digital, an industry standard for measurement is not in place, and the advertising approach isn’t universal in digital.

“Mobile is different from dot com which is then different from Facebook,” said panel participant Oren Katzeff, VP-GM of digital content at marketing agency Demand Media Entertainment. “With each of the different vehicles there are different ways to monetize.”

And so advertisers continue to primarily spend on traditional TV units, to allocate most of their budgets months in advance, Swartz said, even though changes in the digital media market — and market opportunities — continue to come at a rapid rate. Some broadcasters might take that as good news — why rush change and disrupt the revenue model that’s working for you.

But the problem, Swartz argued, is that because broadcasters still see most of their money in TV, they’re neglecting the money they can be making online.

“The misperception needs to get thrown out that [the online] audience is less valuable,” Swartz said. “I remember buying media five years ago, and the TV guys would throw in all the Web stuff for free. Based on what I’ve seen from the upfronts, their approach to second screen is not much different. They don’t know how to value it, what the value of an audience or viewer is versus what it is on the big screen. There’s such a chasm.… So they may let it be a loss leader.”

For all that’s going on at NAB 2012, click here.