Addressable Advertising: Broadcast TV Moves Onto the Internet

• Broadcasters are the current leaders for TV advertising
• Competition from Cable TV, TelcoTV, and Internet TV is heating up, but Broadcasters can still hold onto their lead
• Addressable Advertising that is already in place for Broadcasters can be “mapped” onto their Internet portals, and onto Mobile services
• Equipment, software, and services make up each implementation of Addressable Advertising, it’s not just a “box”
• Each geographic region will grow at a different rate, and different categories will drive each region

Executive Summary

Why Broadcasters Need to Embrace Addressable Advertising

National Networks and Local Broadcasters Already Deliver Addressable Advertising

Addressable Advertising Should Move Smoothly from Broadcast TV to the Internet

The Move to Digital Terrestrial TV Multiplies the Opportunity for Addressable Advertising

Analog Cut Off will Force Broadcasters onto the Internet, and then onto Wireless and Mobile Services

Advertising Adapts to a World of Personalized Info and Entertainment

Advertising is Managed in Campaigns that Have Limited Length and Scope

“Creative” is Used as a Noun to Mean “Creative Content” Developed for an Advertising Campaign

Creative is Targeted

Context, Celebrities, Songs, Cultural Tie-Ins, Promotions and Placements All Help “Target” Creative

Creative Achieves a “Long Tail” Benefit from Cultural Targeting

Advertising Delivery Systems Address Specific Market Segments

Delivery Systems are Addressable

Each Step in Each Addressable Advertising Delivery System Costs Something

A Quick Look at Addressable Advertising Delivery Services

A Very Quick Look at Advertising on Broadcast Television

Broadcast TV is Still the Best Game in Town for Addressable Advertising

Broadcast TV Entities Will Also Be Covering Bets in Pay-TV, Mobile, and Online

Personalization of Media Needs to Also Protect Personal Privacy

Free-to-Air Broadcast TV Provides Anonymous Viewing, So it is Very Private

Example of TV Broadcast Advertising Revenues: Revenues Per Viewer

“Creative” Content Targets Specific Audience Segments That Command a Premium

Repetition as an Obstacle to the Success of Addressable Advertising

Frequent Repetition of the Same Ad on Broadcast TV is Becoming Less Acceptable to Viewers

Addressable Advertising for Broadcast TV is Not Very Granular

Digital Terrestrial Transmissions Provide the Ability to Narrowcast

Broadcast TV Needs to Reduce Mind-Numbing Repetition of Ads on their Airwaves

Broadcast TV Needs to Improve Time-to-Audience for Addressable Advertising

Time-to-Market Can Become a Competitive Advantage for Local TV Broadcast Stations

Addressable Advertising for Online Portals Will Grow as Video Moves to the ‘Net

Addressable Advertising with Online Portals Achieves Optimal Time-to-Market

Advertising with Online Portals Can Achieve a “Long Tail” Benefit

Harris H-Class Presents an Advanced Solution for Broadcasters

Forecasts by Category, by Region

Our Market Model Provides a “Bottoms Up” Approach

Four Categories of Addressable Advertising for Broadcast Facilities

National Network Play Out Facilities with Addressable Advertising

National Network Play Out Facilities with Addressable Advertising on their Internet Portals

Local Broadcasters with Addressable Advertising

Local Broadcasters Internet with Addressable Advertising on their Internet Portals

Annual Costs for Addressable Advertising Equipment, Software and Services

Equipment, Software, Automation Systems and Services

Value of Addressable Advertising Infrastructure for Broadcasters by Region, and by Category

North America by Category

Europe by Category

Asia by Category

Rest of the World (ROW) by Category

Worldwide Summary by Category

Summary of All Categories Combined, by Region

Methodology

Related In-Stat Reports Summary

List of Tables

Table 1. Advertising “Spend” Example for Representative National Network TV Programs (Network Pricing per Ad, Rating of Show, Millions of Viewers, Number of Spots per Show, Value of Show, Revenue per Viewer)

Table 2. A Second Advertising “Spend” Example for Representative National Network TV Programs (Network Pricing per Ad , Rating of Show, Millions of Viewers, Number of Spots per Show, Value of Show, Revenue per Viewer)

Table 3. Attitudes about Repetition of a TV Ad from Five Audience Segments (Percentage of Survey Respondents Answering in Each Category)

Table 4. Broadcast Facilities Likely to Spend on Addressable Advertising by Category for North America (Number Of Facilities, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 5. Approximate Value of Equipment, Software and Services by Category for North America (US$ in Thousands by Category)

Table 6. Value of Addressable Advertising Infrastructure for Broadcasters for North America (US$ in Thousands, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 7. Broadcast Facilities Likely to Spend on Addressable Advertising by Category for Europe (Number Of Facilities, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 8. Approximate Value of Equipment, Software, and Services by Category for Europe (US$ in Thousands by Category)

Table 9. Value of Addressable Advertising Infrastructure for Broadcasters for Europe (US$ in Thousands, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 10. Broadcast Facilities Likely to Spend on Addressable Advertising by Category for Asia (Number Of Facilities, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 11. Approximate Value of Equipment, Software, and Services by Category for Asia (US$ in Thousands by Category)

Table 12. Value of Addressable Advertising Infrastructure for Broadcasters for Asia (US$ in Thousands, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 13. Broadcast Facilities Likely to Spend on Addressable Advertising by Category for ROW (Number Of Facilities, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 14. Approximate Value of Equipment, Software, and Services by Category for ROW (US$ in Thousands by Category)

Table 15. Approximate Value of Equipment, Software, and Services by Category for ROW (US$ in Thousands, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 16. Broadcast Facilities Likely to Spend on Addressable Advertising by Category for Worldwide (Number Of Facilities, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 17. Approximate Value of Equipment, Software, and Services by Category for Worldwide (US$ in Thousands, by Category, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

Table 18. Value of All Categories Combined, by Region (US$ in Millions, by Region, Annual Growth Rate, Percent Of Total, Compound Annual Growth Rate)

List of Figures

Figure 1. Regional Value of Addressable Advertising Equipment, Software, and Services for TV Broadcasters (Includes Broadcast-related and Internet-related Spending, Value US$ Millions)

Figure 2. Example of Addressable Advertising for Linear TV Programming (Increments of a 2 ½ Minute “Break” in :10 Second Slices. National Ads are Pink, Regional Ads are Orange, Local Ads are Green, Local Promos are Blue)

Figure 3. Overview of Addressable Advertising Delivery Systems with Some Examples

Figure 4. Value of Addressable Advertising Infrastructure for Broadcasters for North America (US$ in Millions, by Category)

Figure 5. Value of Addressable Advertising Infrastructure for Broadcasters for Europe (US$ in Millions, by Category)

Figure 6. Value of Addressable Advertising Infrastructure for Broadcasters for Asia (US$ in Millions, by Category)

Figure 7. Approximate Value of Equipment, Software, and Services by Category for ROW (US$ in Millions, by Category)

Figure 8. Approximate Value of Equipment, Software, and Services by Category for Worldwide (US$ in Millions, by Category)

Figure 9. Value of All Categories Combined, by Region (US$ in Millions, by Region)