Internet usage is now approaching TV usage — in the US, the UK, Australia, Germany, and Japan — according to an IBM study to which Om Malik points us. Note also that TV networks’ share of online TV viewing is only about 33 percent, below YouTube and barely ahead of Google and social networks in the U.S. — and the alternatives are only beginning (in the life of internet video, it’s only 1954).
Why the hell isn’t online advertising approaching parity with TV advertising? Because advertisers are slow. Says IBM:
The global findings overwhelmingly suggest personal Internet time rivals TV time. Among consumer respondents, 19 percent stated spending six hours or more per day on personal Internet usage, versus nine percent of respondents who reported the same levels of TV viewing. 66 percent reported viewing between one to four hours of TV per day, versus 60 percent who reported the same levels of personal Internet usage. . . .
Despite natural lags among marketers, advertising revenues will follow consumers’ habits. . . .
Saul Berman, IBM Media & Entertainment Strategy and Change practice leader, said, “The Internet is becoming consumers’ primary entertainment source. The TV is increasingly taking a back seat to the cell phone and the personal computer among consumers age 18 to 34. . . .”
Unless, of course, your cell phone is a computer. Hat tip: Steve Jobs.
IBM, being a big-iron company, analyzes what this means to its fellow big companies. That’s where most of the consulting money will be. But it’s not where most of the change — and perhaps power — will be. Says IBM:
To effectively respond to this power shift, IBM sees advertising agencies going beyond traditional creative roles to become brokers of consumer insights; cable companies evolving to home media portals; and broadcasters and publishers racing toward new media formats. Marketers in turn are being forced to experiment and make advertising more compelling, or risk being ignored.
I prefer to look at the opportunities this profound disruption brings:
As we already know, of course, anybody can make TV (second hat tip Steve Jobs), distribute it (YouTube et al), and market it (via the link). The problem remains that even though the costs are a fraction of the old, big stuff, you can’t support it with advertising … yet. But that will come. Witness today’s announcement that YouTube has settled on its means of delivering ads. See also this from the IBM survey: 63 percent in the U.s. said they would watch advertising before or after quality, free content (34 percent said they’d be willing to pay). Speed up, advertisers.
As for advertising agencies becoming “brokers of consumer insights”: they should wish. Before, agencies and media were the gateways to the audience. Now, companies can converse directly with customers and get plenty of insights without gatekeepers. I’d rather be Facebook than an ad agency, wouldn’t you?
Cable companies becoming “home media portals” is a fancy way to say pipe. Period.
Broadcasters and publishers shouldn’t be racing to new media formats for one-way content. They should be racing to enable new kinds of relationships among communities of information.
And marketers shouldn’t just be experimenting with new forms of marketing — though they should. They should be trying new means of conversation with their customers.
Some more findings from the U.S. IBM survey:
* “Content” is now, at last defined as conversation as well. Use of content services: 45% social networks; 29% user-generated sites; 24% music services; 24% premium video content for TV (not sure what that means); 18% online newspaper. Ouch.
* 58% have already watched online video and 20% more are interested.
* DVRs are good for TV: 33% watch more TV as a result (58% the same)
* 74% contributed to a social network; 93% contributed to a user content site. Who says that forums are only for nuts, blogs for early adopters, and photo services for geeks? Everybody’s making content. Why do they do it? Feel part of a community, 31%; recognition from peers, 28%. Conversation.
* How is content marketed today? Peers. Primary reason for viewing content on a user site: 46% said the recommendation of a friend.
* But here’s the fly in my future-of-advertising ointment. Asked which ads “most affect your imopression of a product or company,” TV commercials on major networks got the lion’s share.
