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BBC Monitoring Media

Analysis by Peter Feuilherade of BBC Monitoring at the International Broadcasting Convention (IBC) in Amsterdam

Television broadcasters, apart from those funded entirely by a licence fee, have so far relied largely on advertising as a major source of revenue.

But the traditional broadcast TV market is facing increasing pressure, delegates heard at this week's IBC in Amsterdam, Europe's biggest broadcasting trade fair.

A session on "Advertising - lifeblood of the industry" looked at the challenges posed by new technologies such as personal video recorders (PVRs), as well as the opportunities that new business models represent.

PVRs that allow viewers to watch programmes on demand and skip through adverts have been cited as a threat to traditional spot advertising.

Yet surveys for Sky in the UK showed that when PVR owners skipped adverts, the advertisers' messages still got through to viewers. There was no reduced awareness, and no less propensity to purchase the products.

And in many cases the technology exists to block these devices from fast-forwarding through adverts. "So far the broadcasters and platform operators have not implemented this functionality," media analyst Julian Clover noted.

Giving viewers control

In a global TV advertising business valued at 410bn dollars, advertisers had to find new ways of making adverts relevant to viewers, said Patrick Christian of Packet Vision, a company focusing on internet protocol TV (IPTV).

"Adverts that increase relevance through search are more successful. The same thing can happen in the world of TV. And the key lies in IPTV," Christian said.

The merger of internet technology with TV allows advertisers to focus on viewers' interests, increases engagement and allows measurable feedback from the audience. Internet users' demographic and usage information can be collected for more effective advertising and cross-selling.

Christian said interactive advertising had a double benefit. While advertisers collect more information, viewers get more interesting and relevant advertising. "It gives the viewer more control over the TV," he added.

Ben Nicholls of the London ad agency Picture Production Company said advertisers were increasingly creating bespoke content for interactive TV. In general, television was becoming more of a one- to-one personal experience.

But the traditional TV spot will form a major part of advertising media spend for the foreseeable future, he told the IBC audience.

John Pink, commercial director at the UK company Red Bee Media, said knowing who is watching what provides big opportunities for brands and advertisers.

"Targeted ads will need to be fairly different to the 30 second spots aimed at 22m plus audiences that agencies are used to creating. Similar to programming, commercials on new platforms will need to be targeted to more specific audiences," Pink wrote in the show publication, The IBC Daily.

If the media industry wanted to push the uptake of new platforms into the mainstream, "they need to become more user-friendly and advertisers need to incorporate them into their campaigns," he concluded.

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(c) 2006 BBC Monitoring Media. Provided by ProQuest Information and Learning. All rights Reserved.