Craig Gugel – The 2020 Vision: How Advertising Will Adapt

Craig Gugel, President/CEO, Gugelplex TV, Inc.

It’s 9pm on a Friday night. Tom has just returned home from a weeklong business trip. Tired as he is, he decides to unwind a bit by catching up on one of his favorite network dramas. He powers-up his iPhone 12, scans the program listings by content category, selects the drama he wants to watch, points the phone and clicks, bringing up the program on his 52-inch iMac screen. Next, the program menu appears allowing Tom to select from ten different dramatic storylines and outcomes, with or without product integration. He opts for storyline two, outcome five with product integration so that he is not charged for viewing the episode without ad content. Tom sits back to relax and enjoy the show.

The year is 2020. Rather significant changes in the viewing environment have taken place since the year 2012. Most of these changes were precipitated by the marketplace introduction of new consumer video technologies. In order to understand how advertising will adapt and what forms it will take, it is necessary to understand what the electronic media landscape will look like eight years down the road.

As is evident from the opening scenario, true convergence will likely be achieved by 2020. Platforms will blend as TV goes online and online becomes TV. Consumers will select programming “Over-The-Top” (i.e., via online distribution and delivery services that are not controlled by an Internet Service Provider). The age of the personal video programmer will have finally arrived.

Today’s cable television connections will morph into very high-speed online connections. On the consumer electronics front, home flat-screen TVs will be phased out, replaced by large 32-inch+ iMacs and similar high-end PCs. iPhones and other smartphones will replace universal remote control devices, allowing viewers to scan through program listings, point and click to bring the desired programming up on large iMac screens. Programming and advertising will become highly mobile as Macbook Air, iPads, smartphones, in-car mobile video, airline video, transit video and others increase their share of the out-of-home viewing audience, possibly surpassing in-home audience share for the first time.

In order for programming and advertising to thrive in such an environment, all content will have to become interactive. While consumers will still have the ability to have content pushed to them, pulling-down selected programming and advertising content that one wishes to see will become the rule rather than the exception.

By 2020, the proportion of programming to advertising will have risen significantly. The deleterious effects of advertising clutter in the early-2000s, will have  driven  advertisers and content producers to integrate advertising into program storylines, eliminating most two-to-three-minute commercial pods of ineffective 15-second and 30-second commercials.

Where non-integrated commercials continue to exist, the units will have evolved into innovative, cinema-like ads where rapid scene changes, heavy use of computer animation, colorful graphics, music, dramatic and comedic elements dominate. In short, non-integrated ads will be produced to appeal to those with extremely short attention spans. In addition, most if not all, non-integrated units will return to 60-seconds or more in length in order to be able to effectively tell a story, not just sell a product. In the advertising environment of 2020, storytelling becomes paramount, while hard sell becomes a turnoff.

Telecom, wireless, cable and satellite companies, the primary platforms over which the brave new video world will be delivered, will have to adapt as well. In order to cope with petabytes of interactive video, audio and data, these enterprises will have to vastly upgrade their transmission networks. Several of these companies may merge in order to make it economically feasible to make these upgrades. By 2020, the new world of Internet Protocol Version 6 (IPV6) will be firmly in place, allowing each web-enabled personal digital communication device to possess its own unique IP address. Unique IP’s will allow researchers to track how each device is used and attribute viewership, listenership and response to the individual owner of each unit for analysis purposes.

The means by which we measure viewing to the myriad of interactive advertising and programming options must also evolve and change. Broad viewing measures will need to be routinely augmented by return-on-investment metrics as advertising performance and accountability become client demands rather than “nice-to-haves.” Product purchase and volumetric measures will all but replace demographic characteristics that are no longer effective predictors of buying behavior.

In 2020, there will be much less reliance on single-source survey databases and much greater reliance on merging multiple datasets on a customer name and address basis. For example, rather than basing client communication plans on syndicated third-party media and marketing data, marketers’ own customer purchase databases will likely be the main sources used to define proprietary buying and planning targets. The names and addresses of these customers will be identified on a confidential basis and matched to the same names and addresses on other marketing and cross-media datasets (e.g., IP address databases, frequent shopper databases, comScore Media Metrix database, Nielsen TV database, MRI media/marketing database, etc.). Using a cross- database sample of matched names and addresses from several different datasets, will enable us to more accurately identify cause and effect—the extent to which promotional messages appearing in one or more media vehicles persuaded the consumer to purchase the marketer’s advertised product.

Finally, by 2020, the media and marketing community will be expected to translate advertising performance into a profit or loss metric that can be integrated within the marketer’s quarterly corporate balance sheet. Given this, it is imperative that the measurement datasets we use are as robust, detailed and accurate as possible. Planners will no longer have the luxury of building communications plans with media properties that hide behind nebulous metrics that do not tell the entire story about how they drive sales for a particular marketing campaign.

The year 2020 seems a long way off. In reality, it isn’t. It is just around the corner. Let’s start planning now for the complex advertising world that awaits us by the end of the current decade.