GenuineVC David Beisel's Perspective on Digital Change

April 8, 2005

“New media” has been around for the past ten years or so, and interactive media ad spending has exploded since its inception. Advertisers have found and are continuing to find this digital medium as an extremely effective way to reach and influence consumers.

Now with the advent of Tivo and other DVRs circumventing the stand-by traditional 30 second television spot, advertisers are scrambling find even more “inventory” for their messages. And they are succeeding, albeit temporarily, along a few fronts. For example, advertisers have moved to integrate their product directly into shows’ content, like in Trump’s Apprentice, with mixed results. But even successful efforts of this type cannot overcome the fact that individuals are spending increasingly substituting time watching TV for other forms of interactive entertainment.

With the decreased effectiveness and usage of traditional mediums in reaching consumers, we are now seeing the emergence of an additional set of promotional outlets. I see these “New” New Media advertising types surfacing as becoming powerful venues for reaching consumers:

Ads in Video Games – Companies (like Massive Inc.) are creating ad inventory systems to directly insert interactive advertisement into game-play on both consoles and PCs. Why drive your racing car on a generic street when you can drive by dynamic promotional billboards strategically placed along side the road?

Ads on Mobile Phones – Despite initial consumer resistance and early predictions that this trend has been “just around the corner” for the past five or ten years, this ad type will arrive as carriers become increasingly reliant on outside help to increase per-subscriber revenue metrics. Think about the power of a button, “Press here to talk to us.”

Ads on DVRs / IPTV Boxes / IP Radio Boxes – While it’s unclear to me just how the home media entertainment center will evolve in the future, there is one thing that is clear: advertisements will become an integral revenue component in delivering media to consumers. For example, just this week, Tivo announced ad inventory pops displayed during their fast-forwarding function.

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