Web Execs: TV Merging With Internet

Filed in archive Internet TV on March 22, 2006

I was reading an article by Erik Sass. It quoted panelist comments hosted by the Advertising Research Foundation in New York. Two of the panelists were interesting enough to include here. Here is an excerpt of those comments with a few of my own mixed in.

Internet companies will increasingly rely on TV networks to provide online content.

"They do have the content," Yahoo Executive Vice President Greg Coleman said of the major TV industry players, adding: "the answer is going to be partnerships of all different kinds."

Joanne Bradford, corporate vice president of global sales and trade marketing and chief media revenue officer for Microsoft, said that even though the Internet and television are melding, TV isn't likely to dominate the smaller, fledgling Internet advertising market.

"The industry is not at a place where you can just turn over what we do to television," she said, stressing that online ad sales are driven by data. "It's a very different sell--it's bought in a different way; the back-end reporting structure is different."

I'll kibitz here a little. She is absolutely correct but I have a different question: if Madison Avenue were willing to shift a portion of its huge $18B television ad spending ($60B from all U.S. sources) away from traditional television into online television, would online media companies sell their ad inventory differently? I think so.

Bradford noted that online agencies' capacity to place premium inventory still lags far behind demand -- meaning that a huge pot of ad dollars are being lost every year. "Until we're at the place that we have operational scale and ease of use as an industry, we're always going to be behind," Bradford warned, concluding: "[TV's] not as efficient as we are, but we don't have the scale that they do."

Experience has taught me one thing: the definition of efficiency is different on Madison Avenue. Their economics dictate that the best buy is one that fulfills the media plan and generates very low internal overhead costs. And I am afraid to say that by that measure, Ms. Bradford, TV is the most efficient medium.