Why TV advertising means nothing in the age of the smartphone
As if the ongoing streaming takeover isn't enough, it turns out that even when people are watching TV, they're not really watching it.
A New York Times magazine article on Sunday chronicles Comedy Central's ongoing transformation from a cable channel with "a guy yelling at you" to an integrated media machine with 4.2 million YouTube subscribers and 1.3 million Twitter followers.
But, as Comedy Central is learning—Viacom, the channel's parent company, saw a 6 percent drop in advertising revenue in the first quarter of this year—and many other channels are fearing, viewing figures aren't all they're cracked up to be.
It turns out that even though a quarter of all television content is consumed live, it may not really be worth it—because people aren't watching the ads.
According to data from alphonso, mobile device usage peaks during TV's prime-time hours, and spikes coincide exactly when programs break for commercials. The bummer for advertisers is that while they're paying thousands for eyeballs on the screen, people are pulling out their device right when the ads come on.
"Every 15 or 20 minutes, right when there's a commercial break on TV, you just see this massive peak in [mobile] activity," said Ashish Chordia, founder and chief executive of alphonso.
That means that even if Nielsen ratings—the industry standard for selling advertisements against a program—say that a million people watch a show, a lot of them are essentially shutting their eyes to the ad breaks.
"The more tech products you have in the house and the more screens is a concern" for advertisers, said Brad Adgate, head of research at Horizon Media. "What the Nielsen meter can really measure is if you've changed the channel."
Mobile devices and tablets are becoming more common in the living room—up 45 percent year over year, according to some estimates—exacerbating the problem.
Not surprisingly, the company that provided the data sells a solution. Alphonso's business is providing cross-platform advertising solutions to capitalize on viewers who tune out during the commercial breaks. The system is "the largest corpus of commercials" in the world, Chordia said.
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Using a mixture of audio, image cognition and partnerships with hardware system creators, alphonso knows what you're watching and can bring up ads to reinforce what you're not watching on TV. So if you tune out for the latest Ford TV ad, alphonso can put a pop-up in the mobile phone game you're playing during the commercial. Alternatively, it can show Chevy's latest deal, depending on which competitor pays for the service.
It's people watching sports that engage the most in cross-platform usage, according to alphonso's data. That's not super surprising really—a lot of people watching LeBron James jam over Steph Curry will want to know the height differential (it's five inches). People watching college basketball are the most likely to be on mobile while watching live TV, followed by viewers of ESPN's "SportsCenter" and NBA games.