GenuineVC David Beisel's Perspective on Digital Change

April 18, 2005

Last week, I posted my belief that a significant set of New New Media venues are emerging – ads in video games, mobile phones, and DVR/IPTV boxes. Continuing on this theme, I wanted to point out a few interesting pieces that support this assertion:

A Reuters story in which the Yankee Group is quoting an $800M in-game advertising market by 2009. While all industry analysts’ predictions should be taken with a grain of salt, this claim definitely points to the fact that this venue is going to be sizeable outlet for advertisers in the coming years.

– Two articles which point to emerging DVR/IPTV box advertising opportunity. The first is the release of a study by Accenture stating that currently 5% of all ads are skipped by consumers with DVR devices, and that figure could reach 22% by 2009. This effect could cost the industry somewhere in the realm of $27B. Again, what’s important here isn’t the exact figures, but the sheer magnitude or the problem (and opportunity for alternatives). Add into the mix the story of Tivo reportedly in partnership talks with Yahoo and Google. Of course, the two portal giants are looking to have their hand in delivering ads on this platform, however it eventually manifests itself. How that will happen, is still unclear. But what is clear is that linear television advertising is going wane, then fade, and be replaced by a new set of inventory on DVR/IPTV boxes.

Pamela Parker at ClickZ sums it up well in her assertion that, “[it’s] all about… online inventory.” As opposed to the late nineties when the demand for new media was feebly supported, this time around there are fundamentally solid business models and needs supporting the current surge. This demand will continue and soon spill over into New New Media types as they emerge and mature, while “traditional” outlets begin to whither.

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