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Growth of Customer-Specific TV Advertising

Are mass-media adverts obsolete? TV advertising is being impacted by the Internet and by mobile services that provide highly personalized content delivery, according to a new market study by In-Stat.

No longer does "one ad fit all" viewers -- and now the big trend is for all advertising to become more relevant to the people who see it, the high-tech market research firm says. New technology promises to do that via Set-Top Box (STB), PC and mobile device addressability.

"Advertising buyers understand the current complex nature of the U.S. media delivery industry, and it will take them time, effort, and education to learn how to adapt what they already do to the new hardware-based opportunities that seem so promising," says Gerry Kaufhold, In-Stat analyst.

"Customer-specific advertising that targets identifiable ethnic, cultural, language, or special interest audiences will see above-average growth rates through 2012. Geographic and hardware-based advertising from Cable TV operators will surge forward beginning in 2010."

But there's more to the story. People in the online and mobile industries lack an understanding of how traditional TV works. A recent In-Stat report walks step-by-step through today's TV advertising delivery market, pointing out areas that overlap or duplicate, as well as showing that many delivery networks also provide exclusive content.

In-Stat believes that TV advertising is very complicated, and the incumbent TV program services will continue to control how advertising dollars are spent. Frankly, I'm not convinced that the television advertising status quo is safe, at all.

In-Stat's market study found the following:

- Traditional TV advertising that is attached to popular content is still the best way to obtain repeatable audiences during the flight of an ad campaign.

- Specialized program services focused on ethnicity, language, sports and communities will continue to increase the number of customer-based TV advertising outlets.

- Geographic-Based Addressable Advertising will see the fastest growth.

- Hardware-Based Addressable Advertising will dramatically expand during 2010.

- Hardware-Based Addressable Advertising solutions already exist on the Internet, and solutions based on STB addressability will be growing on a market-by-market basis as Cable TV and TelcoTV services implement emerging advertising insertion technologies in their headends.

- Key problems still to be solved include transcoding, metadata definitions, media management, and creating integrated selling and purchasing solutions that work across all the possible delivery platforms.

- Companies to watch in this space include MediaBank, DG FastChannel, and Run Digital Media.

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