What is convergence and why should you care? Many of us have watched streaming programming on our TV, tablet or smartphone. Others of us have listened to streaming music, whether through a platform such as Spotify or Pandora, or our favorite terrestrial station. The place where traditional advertising and the Internet come together, and blend is convergence. Convergence is the blurring of the line between traditional and digital advertising. Let’s explore convergence and what it means for you.
What Is Convergence
In theory, convergence means that the “blend” of digital and traditional will form one new entity. As we know from history, radio was the first mass electronic media. Talking motion pictures were supposed to be the end of radio. It was not. When televisions became accessible to mass audiences many thought it would wipe out radio and movies. It did not. So, while streaming video and audio is gaining in popularity almost daily, it is probably premature to think traditional TV and Radio are finished, or will even morph into something new. But the lines are blurring.
The blending of traditional TV(Linear) and digital video is one of the most studied phenomenon in the media business and probably the most complicated. Most linear TV viewers get their programming though cable or satellite services. Many households have added on a premium streaming service such as Netflix or Amazon Prime, to enhance their programming options. They are “cord stackers”. However, more people are “cutting the cord”, eliminating the cable or satellite company all together.
Cord-Cutters
In its place, they are adding on streaming services such as Roku, Hulu or Sling. That requires a high-speed internet connection. Although “cord cutters” are not reachable by broadcast or cable, they can be targeted with CTV and OTT. A person who gets their TV over the internet, bypassing cable or satellite is using OTT. Connected TV or CTV is a Smart TV with integrated Internet and interactive Web 2.0 features which allows users to stream music and videos, browse the internet, and view photos. Connected TV requires having a Smart TV. Smart TV is a technological convergence of computers, television sets and set-top boxes.
Streaming TV and Radio
For advertisers, reaching people who get their TV over the internet has advantages. Instead of messaging going out to many people at once, internet advertising is delivered one-to-one. That allows for more precision in ad delivery. With OTT, CTV and digital pre-roll, we can target by demographics, interests, behaviors, geography etc. Everything you can do with digital display advertising. This allows for more personalization. And because it is delivered over the internet, message delivery and response can be tracked.
Streaming audio behaves similarly. Terrestrial radio is a one-to-many delivery. Streaming audio, whether through a platform such as Pandora or your favorite terrestrial station’s stream, is delivered one-to-one. Again, digital allows the advertiser to select exactly who hears the message.
The New Normal
The move to streaming is disrupting the advertising industry in several ways. First, we are becoming more impression based and less focused on ratings, cost-per-points etc. This will make it easier on buyers in our cross-platform environment. It will also provide more granularity. Second, TV and Radio are everywhere, we are just accessing them differently. Consumers are still watching and listening to their favorite content, whether it be a sitcom, movie or talk-show host.
Third, new forms of advertising are now available to smaller advertisers. Previously, only larger advertisers could afford to buy TV or Radio. But, because these new media allow us to target geographically and by user profile, smaller advertisers can get in the game. And finally, data is now more important than ever when buying TV or radio. Not just third party data that informs advertisers of the viewers purchase history or income but first party data that lets us know exactly who is watching or listening.
Convergence And What it Means For You
Convergence is helping advertising become more effective by providing a variety of media tools to implement different tactics. Broadcast allow us to reach large audiences efficiently. Streaming allows us to deliver more personalized messages to each person who receives the ad. It is then helping us measure the response to that advertising so we can develop meaningful data. It is not enough to know that someone saw our ad, but we also need to measure our return-on-investment, return-on-ad-spend etc. Convergence is making TV and Radio better for both the consumer and the advertiser. Consumers can watch or listen to what they want when they want. Advertisers get better targeting and measurement. Everybody wins! And that is what Convergence means for you.
