Is there a Consumer Downside to Internet & TV Convergence?
June 24, 2010 Leave a comment
While there is some superb “envisioning of the future” in the tech business, all too often discussions of future products are delivered with a sci-fi like naivete and a misplaced utopianism.
Now I’m an advocate for TV/Internet convergence. But I’m also quite concerned by the dominance of this naivete in today’s discussions about convergence. And one strange area of utopian ideas surround claims that eliminating advertising in TV programming is a value to consumers.
Supporters of this idea point to survey claims that consumers don’t like TV advertising. But surveys of this type have been around for 50 years, always said the same thing, and always been notoriously inaccurate. And we rarely hear about the contrarian research like last year’s study suggesting consumers enjoy programming more when it includes advertising (“Enhancing the Television-Viewing Experience through Commercial Interruptions”, Nelson/Meyvis/Galak, Journal of Consumer Research, August 2009 also summarized here).
Even worse, utopians seem to forget that consumers hate internet, mobile, or email advertising much more than they hate TV ads. Still, this thinking endures – even at many advertising agencies.
We should all be careful of what we wish for. Convergence could easily hurt consumers more than it helps them. Consider…
…Consumer experience of unwanted advertising on TV is quite minimal since DVRs make it easy to skip ads that aren’t valuable. Note that the latest research shows that DVR’s haven’t decreased ad effectiveness and may even have increased it since consumers can rewind DVRs to see the ad again.
…TV ads work exceptionally well. If everyone hates them, how can this be true? Maybe when you’re asked if you “like” ads, it’s socially unacceptable to say “yes”. And, maybe “liking” isn’t what’s important.
…TV ads deliver a value to consumers. Good ads deliver valuable information consumers can’t get anywhere else – and nothing’s better than TV at delivering this value. At the same time, these ads pay for the programming in a consumer win-win.
…Program developers, networks, cable systems, stations, and advertisers live in a delicately balanced “eco-system” that benefits the consumer. Evolutionary adjustments within this eco-system are the only approaches that have been profitable. Unfortunately, the rush to convergence may dive head-first into revolutionary change that hurts consumers.
Discussing these truths may be a fools errand. Few people, even those in advertising, have the courage to observe that advertising brings consumers value. As a result, many advertising agencies are actively colluding with new media companies, tech developers, and investors in an attack on television.
There is significant value to deliver with convergence. But we must not let utopianism lead us to destroy what’s good in the TV ecosystem. Are we so naive that we ignore the risk that convergence could end up delivering only a bit more programming while increasing costs and slowing down internet performance?
Copyright 2010 – Doug Garnett