More changes have occurred in advertising in the last 36 months than had happened in the last 36 years, said David Verklin, CEO of media buying agency Carat North America.
“The next 36 months will be equally important in shaping the new media landscape,” Verklin predicted at a luncheon address at the Direct Marketing Association’s Net.marketing conference in New York, which excluded Internet-based technologies.
One big change is that the agency world has consolidated, he said. And a result of that is that agencies that used to be full service have spun off media buying units.
Another big change is that the price of network TV media costs has gone up 26% in the last two years. Meanwhile, audiences for this channel have declined. “More and more clients want to look at direct marketing. They are sick of TV.”
A third change is globalization, Verklin said. The U.S. is not leading the world in developing new technologies. For example, South Korea leads the world in broadband. Some 75% of South Korean households have broadband. For wireless, Finland is the leader.
“Are you looking overseas for ideas?” he asked.
Some of the new technologies that will benefit direct marketers include TV portals, interactive program guides and others.
TV portals, which allow the viewer to click on banners or text messages on the screen are in 1.3 million U.S. households. But since the third-richest man in America, Paul Allen owns a TV portal company, the area is expected to grow. “He wants to become the Yahoo of television,” Verklin said.
Interactive program guides, which he admits are not quite interactive, present a host of possibilities for DMers because the viewer could click through to get more information about ads they are interested in. The penetration for interactive program guides is 44 million, he said.
Ad-supported video on demand (VOD) has a penetration of 10 million. Kraft is running recipe ads on VOD. Direct marketers should pay attention to this medium because it’s permission-based and the “opportunity for long-form commercials is phenomenal,” Verklin said.
Four companies drive the addressability area, Verklin pointed out. Addressability is a digital technology that allows a marketer to target an ad down to the ZIP code level. “If you are marketing dog food, you can target ads only to people who have dogs,” he said. It’s available in 18 million homes.
Personal video recorders are available in 2.5 million households. This area, which is essentially a TV with a hard drive such as TiVo, lets the user store up to 200 hours of TV. Consumers could potentially push a button and learn something more about a product or area. Consumers can also bookmark an ad and come back to it later.
“PVR has enormous potential for the people in this room,” Verklin said. “Have you talked to TiVo yet?” he challenged the audience.
Broadband has reached 21 million households. “With broadband a consumer can run a video message and can click through and buy,” he said. Plus, these consumers are pre-qualified. “They are already on cable,” Verklin said.
The video game console area is “going to be enormous,” he said, reaching 47 million homes. The most popular game in the world? A soccer game.
Wireless technology is part of 154 million households. Japan leads the world in the marketing interactivity of this channel, Verklin said, but it’s a growth area for DM. “People already have a phone in their hand,” he said.
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