Death of the spot ad

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Mustafa Mohamed, General manager, Net Advantage.

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Simon Mcgrath, CMO, SeaChange.

"TV advertising allows for a great amount of creativity and allows you to reach the highest number of households at a time. The challenge is finding the best means to reach the relevant audience for a specific service or product."

Mohamed says that the passive nature of TV advertising is allowing the interactivity of web based adverts to forge ahead. However he suggests that the internet can be friend and foe to the TV industry at the same time.

"Advertising around online TV services is growing substantially. It allows advertisers to run their TV ads and users to engage with them. This means recall on your TV spot can be instantly measured. Marketers are after focused and well targeted media platforms with minimal wastage," says Mohamed.

In the meantime, many believe the saving grace for TV ads will come in the form of targeted advertising.

"Almost everyone in the business agrees big changes are in the air," says Simon McGrath, CMO of SeaChange which develops advertising and VOD broadcast technology. "To work effectively in a highly fragmented environment where the consumer is in control, advertising has to become less intrusive and more invited by the viewer."

"Targeting commercial messages to receptive viewers is the shared dream, and nobody argues against it. But getting there has proven to be an extremely difficult challenge for the television industry, and to be honest advertisers are growing impatient," claims McGrath.

He uses the example of the music industry and the shift of its primary revenue source from the high street to the internet.

"Apple's introduction of iTunes represented a brilliant and practical combination of idea and invention. If the iPod and its companion music-delivery platform iTunes didn't save the music industry, at the very least they showed it a way to prosper in a new environment," says McGrath.

"Essentially it was a music-delivery system that harnessed the same technologies the music industry had come to fear. Within a year, the company was interlocked with the industry from the performer right through to the listener."

McGrath believes that the TV advertising industry is now reaching a similar watershed, with the internet again playing the dual role of villain and saviour.

"A fresh collaboration is necessary between the major media buying agencies that control the large ad budgets and the broadcast technology providers that will provide the infrastructure for any new form of advertising," says McGrath pointing out that although these may seem like an odd couple, the same was said of music labels and a certain computer company from northern California.

In order to achieve this, the process behind ad distribution will have to swing toward the same methods used online.

McGrath believes that although the technologies necessary - chief among them a two-way IP network - are already available, they are only accessible to broadcasters using IPTV platforms.

"The technologies needed to deploy advanced advertising on a large scale have been created, trialled and in some cases, deployed. That includes the software systems that control where and when commercials appear, to the storage-and-delivery platforms that house and serve the right ads at the right time. These are in place now," says McGrath.

But is the advertising industry as convinced as the broadcast sector that interactive advertising is indeed the future of TV advertising?

"I don't think targeted or interactive advertising will be the only format to propel TV advertising," says Venture Communication's Merh. "The advertising world, specifically the creative people need to be educated on how best to manipulate this technology. Interactive advertising has been used in short spells by advertisers lately but we need to ask ourselves are there really any successful case studies?"

The lesson that emerges is clear. Broadcasters and advertising specialists need to co-operate in the development of new TV advertising stock.

"Media planners to come up with the right formula that delivers on the brands' needs cost effectively," says OMD's Ghazal. "It is up to the broadcasters to make the deal more attractive by being flexible in what they can offer."

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