Over The Top: How the internet is (slowly but surely) changing the television industry

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The way we watch TV has changed radically. Many eschew scheduled TV programmes in favour of catch up, subscribe to Netflix for the latest shows and refresh social media during the ads. But it’s reassuring to know that if we did want to flop on the sofa equipped with a remote, TV would still be there — just as it’s always has been. For now, at least. A new book argues that the days for TV as we know it are numbered; its imminent demise drawing ever closer.

The change in viewing habits has had huge repercussions on how advertising will evolve. A 2014 study by Arris indicates that 60% of us download or record shows in order to skip commercials. The widespread use of tablets and smartphones is also problematic for advertisers, with research showing that those who pay attention to the TV screen can remember 2.43 out of every 3 brands promoted, while ‘second screen’ users — who simultaneously focus on their devices — were only able to recall 1.62.

In a recent article for the Guardian, Alan Wolk — author of Over The Top: How the internet is (slowly but surely) changing the television industry — claims that all this research suggests TV advertising is less effective than ever. In Over The Top, Wolk explores this theory and offers up a suggestion; that targeted ads driven by personal data may represent the future of advertising.

So, for instance, thanks to data, the system would know that the 18-year-old daughter in the house was watching Glee, and would thus not serve her ads for men’s razors or “cover the gray” hair dyes. And since it’d know that she’d sat through a few commercials for the Gap, it would offer her as the target for an H&M ad based on prior behaviour.
The more she watched, the more the system would learn about her, including the types of shows she watched and when and how she watched them. That would allow the system to provide her with better recommendations and would provide the programming department with insights into the types of shows favored by young women in her demographic.
The ultimate goal, the holy grail, is to create a system where there are fewer, more highly targeted commercials. Since these commercials will reach a much more relevant audience, they’ll fetch more money and thus there will be no drop in overall revenue.
Everyone has bought into this bright new future, with one exception; the advertisers themselves. They don’t want to reach narrowly targeted audiences. They want to reach a broader audience to increase “branding” — i.e., the perception the brand has in the world at large. They do this to ensure they have a steady pipeline of new customers and to increase the perceived value of the brand.

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Written by Laurie Clarke, researcher at Canvas8