| The cable industry has positioned advanced advertising as a key growth story as traditional services mature and revenue growth slows. But cable operators have struggled to launch their advanced advertising initiatives, largely because of various technology and business challenges but also because the recession has prompted advertisers to scale back on spending. These factors will delay the contribution of advanced advertising to bottom lines for the foreseeable future. In this report, we update our analyis of the market, examine recent activity, and provide our adjusted forecast for U.S. cable operator advertising revenue through 2014.
|
- TABLE OF CONTENTS
- Introduction
- The Opportunity
- Cable Technologies and Standards for Advanced Advertising
- Advanced Advertising Standards
- --Digital Ad Insertion
- --Reporting
- --Addressability
- --Campaign Management
- --Interactivity
- Status of Advanced Advertising Standards
- Canoe Ventures Update
- Advanced Advertising Benefits
- Challenges to the Development of Advanced Advertising
- Outlook and Forecast
- TABLE OF FIGURES
- Fig. 1: U.S. Cable MSO Advertising Revenue 2004 - 2009(e)
- Fig. 2: U.S. Cable MSO Advertising Revenue Historical Data and Forecast 2007 - 2014
|
FOR IMMEDIATE RELEASE
Cable to Fall Short on Advertising Revenue Goals, Report Predicts
Silver Spring, MD—The cable industry is seeing a decline in advertising revenue, and emerging technologies designed to make ads more targeted and effective will not generate the near-term growth the companies hope for, Pike & Fischer concludes in a new report.
Cable operators want to target advertising more effectively by sending personalized ads to individual subscribers based on such measures as demographic characteristics and household viewing patterns. This capability will attract both local and national advertisers who want to make their promotional campaigns more effective. Eventually, users will be able to engage with television advertising much like they do on the Internet, clicking on ads to obtain additional information or make a purchase.
With early interactive advertising applications approaching launch, cable executives are counting on these advanced functions to help advertising revenue. But P&F notes that cable operator ad revenue dropped 8% in 2008 and will likely fall by more than 22% in 2009. P&F chief analyst Tim McElgunn projects that the industry’s annual ad revenue will only hit an annual $5.3 billion within five years, far below the $15 billion the industry hopes to generate by that time.
McElgunn cites several reasons for his forecast, including reduced spending by advertisers (based largely on the recession), the lack of agreed upon value for the new ads, price pressure, and the intensive privacy protections that will have to be deployed.
“If cable operators, programming networks, and advertisers are able to agree on new business models that take advantage of the new technologies and processes the cable industry is putting in place, however, that growth rate could accelerate and result in significantly higher revenue,” McElgunn said. “But even in an optimistic scenario, we believe it will be at least 2016 before U.S. cable MSOs surpass $10 billion in annual advertising revenues.”
Pike & Fischer, a BNA business, offers a host of legal and business products covering the telecommunications industry. The report, Cable Advanced Advertising Market Update and Forecast, 2nd Edition, is priced at $699 and is available for purchase at www.broadbandadvisoryservices.com. For analyst commentary or to request a briefing, contact Tim McElgunn at 856-751-6723 / tmcelgunn@pf.com.
For information about Pike & Fischer’s Broadband Advisory Services, visit www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at 973-718-4703 / jping@pf.com.
|
Tim McElgunn
Tim McElgunn, our Chief Analyst, has more than 20 years of experience and expertise in market sizing, forecasting, segmentation and share analysis in emerging and legacy segments of the telecommunications industry. He focuses on the business strategies and competitive status of U.S. cable companies, telephone companies, satellite TV providers and broadband-enabled application providers such as Google, Yahoo and Microsoft. Before joining BAS in November 2006, Tim headed up U.S. consumer broadband analysis for eight years at Stratecast, a division of Frost & Sullivan. He also held senior analyst positions at both Datapro/NBI and Gartner Dataquest. Contact Tim at 856-751-6723 / tmcelgunn@pf.com.
Also by this author
|
|
Call 1-800-255-8131
Email 
Search the Collection
back to top