Disruption in advertising thinned print publications, plastered websites with flashy displays and annoying pop-ups and, most recently, kicked off a sponsored-content movement that has given the Church of Scientology a soapbox in The Atlantic and Honey Nut Cheerios a dozen dancing grandmas on BuzzFeed.
But, for Aereo CEO Chet Kanojia, whose television streaming startup has drawn the ire of television networks that challenge the legality of its business model, the next advertising innovation needs to happen on the same platform he’s agitating: the small screen.
“Something has to happen,” he told International Business Times in an exclusive interview. “If you continue the current model, all people are doing is skipping commercials.”
The first problem, he said, is that most ads aren’t tailored to local markets – something his company, which streams local over-the-air broadcast signals and allows subscribers to play and record live TV on their computers, could help.
“The problem of running the same Toyota Tundra ad in Manhattan that you’re running in Kansas City or in a farmland somewhere. … Why?” Kanojia said. “It doesn’t make any sense. Relevance is going to be the first thing that has to change.”
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So, too, must the television industry’s tendency to inundate viewers with the same ad – over and over again.
“The current model of an excessive ad load, which essentially leads to a very high frequency exposure of the same copy over and over again, makes it unwatchable for the consumer,” he said. “It’s beginning to happen in online products, too.”
Display advertising on websites often imitates traditional print advertising, allotting space around and between editorial content for buyers’ ads, however obnoxious they may be. Online video viewing seems to be headed in the same lateral direction.
He noted Hulu -- the on-demand TV streaming site founded as a joint venture between Comcast Corp. (Nasdaq:CMCSA), Twenty-First Century Fox Inc (Nasdaq:FOXA) and the Walt Disney Company (NYSE:DIS) – which mimics regular television with its several minutes’ worth of 29-second ads between segments of shows.
“Hulu is a good example,” Kanojia said. “You go blind watching the same ad over and over again.”
Branded content, also known as sponsored content, could be the answer.
Emerging news sites like BuzzFeed and The Atlantic Media Group’s Quartz have, so far, developed loyal followings, in part with their clean designs and relatively ad-free platforms. Instead, some of the sites’ content is written by advertisers.
A recent paper by three University of Texas at San Antonio professors suggested brands begin developing programming for the networks.
“Although it has not yet happened in the current television environment, the next logical step in developing product integration opportunities is for brands to create the programs themselves,” they wrote. “Assuming the programs are in fact popular, it is a win-win situation for networks and advertisers.”
Kanojia would likely agree. His own business is seen as one of the most disruptive forces in broadcast television now. And despite three federal court rulings in his favor, and against the consortium of major networks, the likes of CBS Corporation (NYSE:CBS) and Fox continue to rattle their sabers.
But, as Kanojia attacks the network’s cable bundling deals and antenna-based television watching, he thinks advertising has to change course, too.
“All those things have to change,” he said. “Otherwise, the consumers are just going to revolt and skip the ads.”