As reported by Variety, Viacom and Time Warner are exploring pilot programs that will upend the way advertising is priced and sold. The traditional model for television (and radio before that) has been to sell a certain gross number of viewers to advertisers, chopped into crude demographic segments. Those gross viewership numbers are measured by Neilsen ratings, which have held a virtual monopoly for decades. Viacom and Time Warner are now in conversations with advertisers to price ads based on much more sophisticated metrics that take into account the specific audience response to an advertisements, whether by direct interaction or lifts in consumer awareness.
Broadcast and cable television are under increasing pressure to adapt their economic models in the face of challenges from digital media. The ubiquity of DVR and other time-shifting technology has materially reduced ad viewing on the same day that a program originally airs. The fast forward button has likewise had its effect on ad viewership. Digital media offer the opportunity for ad placements that are far more focused and engaging. This move by two media powerhouses is a creative step forward in an effort to hang on to media dollars that are shifting away from television, and represents the next step toward convergence of old and new media.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
