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Broadcasting advertisements on TV to potential consumers does not have the same impact as it used to. People now are smarter, don’t want the obtrusion of the advertisements and now also have the technology just to skip over them. So what are the TV stations going to do if advertisement revenue is going to continue to decline over the next few years?

A recent article in the Guardian in the UK shows that in the UK there is already more money spent online advertising as opposed to TV.

Another article talked about extending advertisements into TV programs, also known as product placement. As you can see from the article this didn’t go down very well! This movement to online advertising is going to continue to happen so TV stations need to wake up and decide if they want to be part of this social connected online world and embrace the changes required. The innovative, fast moving companies will survive in this world but there will also certainly be casualties.

In my own case the majority of time I now watch recorded material and with my sky+ box I skip over all the advertisements. This is typical of how many people are starting to watch TV. Even when I’m watching a live show I pause it for 10 or 15 minutes and then watch it so I can skip over the advertisements. How are TV stations going to survive without having advertisements? You seen in my previous post about Pepsi giving up on superbowl ads after spending 23 years advertising on TV during the superbowl. For TV stations it’s time to wake up and face the reality, pure advertisement revenue as we know it will not be a big growth area for them.

I was reading a very interesting article sent to me by a business partner in Australia and it was about TV shows going social. In the article it talked about TV shows having to become more multidimensional. It’s no longer enough just to have a TV show and in the future shows will have a whole package that connects people together. An example is given about American Idol. With this show you have people online communicating and sharing information, there are record sales as a result, merchandise, concert tickets and much more. It’s not just about the TV show, it doesn’t stop at the TV show that’s just the starting point. People are interacting on youtube, facebook, twitter and many more social networks.

In the article Elizabeth Murdoch (daughter of Rubert Murdoch and Chief Executive of the Shine Group) talks about one of their shows called “biggest loser” is more about Wii exercise games, diet plans, fitness equipment, and a host of other things.

Typically advertising space is sold through Advertising/Media buying agencies. These agencies have been very slow to adopt the new socially connected world and I think it’s unlikely that most of them will ever ‘get it’. As Jason Falls (Great blogger on social media) points out in one of his articles advertising agencies really struggled with web 1.0 so how are they going to cope with web 2.0. Well unfortunately for a lot of them they won’t cope with it.

In a time where time spent on the internet is now passing out time spent on TV it’s time for TV companies to look at their revenue models and change them drastically. The fittest will survive…

What are your thoughts on this?