Death of the spot ad

The value of the traditional TV spot ad is under increasing scrutiny. Digital Broadcast surveys the advertising world to see how broadcasters can win back the ad dollars...

Nobody admits to liking TV adverts but practically everyone will at one time or another have brought a particularly entertaining or thought provoking example up in conversation.

The truth is that while not all adverts are worth appreciating, everybody has enjoyed one - secretly or otherwise - and many have left indelible marks on popular culture, especially in the West.

The 30 second ad spot has become a creative medium in itself and has certainly come a long way since the first TV ad in 1941 for Buvola watches. But the traditional format is losing its grip and advertising dollars are finding their way into competing media.

Now even in those markets where TV ads were arguably most appreciated, they are in decline.

A number of factors are at play with their respective importance varying in each territory.

In the US, a combination of the swing toward online advertising and the impact of TiVo and other PVRs have proven to be the most significant factor.

In Europe, several governments have limited the amount of advertising certain public service broadcasters may show, effectively cutting the industry off at the knees. In parts of Asia, lightning fast broadband speeds combined with ineffective piracy regulations are triggering declining audiences, shrinking the value of the TV ad market.

The Middle East is perhaps the most complex region suffering as it does from a reduced form of all these problems. So what does the future hold for the traditional 30 second ad spot and what can advertising agencies and broadcasters do to protect their most fundamental revenue stream?

"The conventional 30 second TV spot will hold the fort provided there are constant improvements in terms of scripting, production values and attention to detail to give the end product a better finish," says Jaideep Merh, account director with advertising agency Venture Communications.

"The emerging advertising formats available will make some inroads in the next three to five years, but the success or failure of these new mediums will depend on how the advertisers deploy these options," says Merh.

"Both the conventional and new advertising options have their advantages and disadvantages but at the moment, there is enough room for both to survive and even grow," he adds.

Broadcasters can offer advertisers other sponsorship opportunities alongside the regular 30 second spot such as associating brands with specific content and creating openings for product placement.

"Program integration and [branded] content creation are the next stages in communication planning but that does not mean they will replace the 30 second ad spot," says Firas Ghazal, OMD director - planning. "These have to be part of a broader, unified campaign to ensure an amplified effect. They are not meant to exist as standalone activities."

For these reasons, Ghazal is confident that broadcasters will have to supplement rather than replace the mainstay of their ad space portfolio.

"The 30 second ad spot is here to stay, at least for the next few years. While the advertising industry adjusts to the economic crisis, most marketers are sticking to what has worked in the past, and that's the 30 second ad spot," claims Ghazal.

"Program integration initiatives are being encouraged and endorsed by media planners, marketers and media owners alike, but we have a long way to go before we see them happening more often," concludes Ghazal.

The well documented threat posed by PVRs and time shifting, giving the viewer the ability to skip over adverts, is not significant in the Middle East. At present Showtime subscribers have the option of using the operator's Showbox PVR. Orbit now offers subscribers the option to buy the XD 400 set top box, manufactured by Humax, which also has PVR capabilities. Away from the pay TV sector however, there are few options for mass market FTA viewers. This situation is likely to change, however.

When it does the initial concern will be that viewers will now skip through all adverts and the value of the TV market as a whole will slide.

New research commissioned by TiVo and carried out by Innerscope has shown that viewers with time shifting capabilities will continue to sit through adverts in their entirety, as long as the ad is "emotionally engaging".

This puts some of the responsibility back on the advertisers to invest in the creative and production budgets of their campaigns.

PVR boxes deployed in a two-way network also enable VOD services. Inserting adverts around VOD programmes is one way that broadcasters can offer additional value to advertisers.

An obligatory 30 second advert tied into the download process will achieve more engagement with a viewer who has deliberately and specifically sat down to watch that programme. If advertisers and broadcasters keep this advert relevant to the content, they should be able to achieve greater results - and less wastage - than if the same advert was shown as part of a linear broadcast.

There are also branding opportunities created around the very process of time shifting. The fast forward symbol always on screen when a viewer might be skipping through adverts and the time elapsed, should be considered as a piece of advertising real estate in its own right.

The electronic programme guide (EPG) has also become of increased use with the advent of time shifted TV. The ability to record and manage your own "library" of content means viewers spend more time using the EPG than before. Operators should be looking to maximise the relevance and volume of ad space on an EPG. This makes it possible to serve targeted advertising to a viewer before they have settled into watching a particular programme offering a less intrusive point of access for advertisers.

All of this acts to offset any damage done to revenues by time shifting.

For the foreseeable future PVR use in the Middle East will be limited to a proportion of the region's pay TV subscribers. With these operators less reliant on advertising income, they are also less likely to press for such initiatives. Meanwhile FTA operators will only lose the attention of those viewers subscribed to a pay TV PVR service. This is unlikely to reach a significant proportion any time soon.

The threat from PVRs in the Middle East would only be realised if an affordable set top box for FTA DTH services became popular. In a price driven market, this is not likely to occur until there have been significant cost reductions in the hardware.

The other emerging threat to TV advertising is from the internet.

"In the MENA region, TV advertising is still considered one of the most effective ways to reach the mass," says Mustafa Mohamed, general manager of online media house Net Advantage.

"The TV media scene is becoming too challenging to marketers. Satellite TV stations have mushroomed across the region in the past decade, increasing the channel hopping factor significantly. The commercial breaks are becoming too cluttered," claims Mohamed.

MORE FROM ARABIANBUSINESS.COM