When will advertising’s Tesla moment arrive?

Credit: Unsplash
Credit: Unsplash

We can put self-interest and control aside, or we can wait to be disrupted by someone who can pull it off.

The pandemic has exacerbated the shift in how people watch video, sparking initiatives to realign technology, consumer interests and business operations. 

As a result, major U.S. TV networks have begun to transform in earnest. The last 18 months, we’ve witnessed consolidation, new product launches, and the ascension of digital-first streaming executives to content production and delivery roles.

We are hurtling towards an on-demand world where just sports, news and big communal events are watched live. Whether advertising reinvents itself as part of this transformation is still an open question.

These shifts have destabilized advertising. While Netflix and Amazon Prime flourish, traditional media companies fight for declining, older audiences. It’s no wonder Peacock, HBO Max and Disney Plus all launched in the past year, as networks look to recapture viewers. 

But streaming services’ successes or failures won’t just depend on the content they offer. It will require a new ad model that delivers the best possible viewing experience, provides value to marketers and generates adequate revenue for media owners at the same time.

Addressable’s time is here

We have been talking about addressable video advertising for decades. 

The sell-side has continued to innovate, from the Orlando Time Warner trials in the 1990s, to cable interconnects and zone advertising in the early aughts, to data-driven linear platforms today. None ever achieved their full promise, or the scale marketers need.

That’s because we have never focused on changing the fundamentals of what was being transacted and how it happened. Rating points don’t matter in a fragmented world. Audience reach, attention and outcomes do. But maximizing those KPIs is not easy when everything is managed through siloed sales channels.

Today’s solutions remind me of a hybrid car. They make things a little better, but they still rely on old technology. Big, bold change isn't a hybrid. It's Tesla. We need to completely rethink how video advertising works; to redesign its engine and establish a new infrastructure for its fuel.

Bold, disruptive thinking relies on privacy-friendly, centralized and open source identity. It requires coordinated ad delivery across portfolios to maximize reach and manage frequency. It thrives on custom ad models created to hold attention. It means better attribution and outcome-based validation. 

It's a fully coordinated ecosystem -- not just within media company portfolios or walled gardens, but across them.

Coordination is key

Consumers want more value in exchange for their attention. Media companies need to grow. Advertisers want outcomes. These are not mutually-exclusive, and the solution must be comprehensive.

This will require a change in perspective. Media companies and platforms need to recognize that they don’t just compete, but complement one another. Once consumers decide where to watch, we must all work together to balance the viewing experience, deliver value to advertisers and drive revenue to publishers. 

We need to stop insulting consumers with more, repetitive ads by managing ad experiences around the viewer, not just individual shows or networks.

Conversation began in earnest around electric vehicles more than 30 years ago. But it was easier for incumbents to maintain the status quo. Auto manufacturers never fully committed. When GM destroyed its electric cars in 2003, Tesla was born to challenge them.

I wonder when the Tesla of advertising will stand up. We can put self-interest and control aside, or we can wait to be disrupted by someone who can pull it off.  

Adam Gerber is global chief media officer at Essence.


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