INSIGHT: Television adjusts to digital changes

According to media spend forecasts for 2011, television continues to consolidate its position as the dominant mass medium, with digital gaining ground. But, that when it comes to how the two platforms work together, some TV players have yet to see the value of digital, treating it as a value-add. 

Media experts agree that TV networks would be unwise to undervalue their digital assets. Players in the cable and satellite space in particular cannot thrive on TV alone. Nihar Das regional managing partner MediaCom, says that some of TV’s problems with digital stem from differences between selling and how value is measured. The challenge in monetising digital lies in overcoming the old models.

“Owners sell space and exposure and clients have become used to that,” Das says. “The metric used is CPM. As long as that’s the case, we will face difficulties in attracting investments in digital. The TV CPMs continue to be any where from three to 15 times less expensive, depending on geographies, with a much bigger audience base. For clients, the argument for CPM substitution doesn’t make sense.”

Meanwhile, some digital media owners are trying to get away from the perception that old media is ruining the market for new media, describing it as outdated. Ken Mandel, former regional VP advertising sales and marketplace at Yahoo, and chairman of the IAB in Singapore, says while it may have been the case for TV owners to give away digital, the current reality is that any media owner who has inventory of value will charge market prevailing rates (CPMs). “Only media owners who do not have audience, hence valuable inventory, will discount and sell as a value-add,” he says.

Most media agency executives agree, saying that FTA broadcasters like Malaysia’s Media Prima and Singapore’s MediaCorp are significantly investing in online propositions. Media Prima, the only FTA broadcaster in Malaysia has significant digital assets, which it has invested heavily in over the past two years.

Some pay-TV players are still grappling with the dilemma of how to best use digital. Fox Network’s Asia-Pacific vice-president Matt Harty says much has changed since he came on board in late 2009 when the digital division focused on local digital-only clients. “It soon became apparent that company and clients would be better served with a more integrated approach.” 

Since then, Fox has seen massive growth in ad revenues. Harty advises traditional media to learn as much as possible about digital speed and accountability. “These are the things traditional media has to take away from the experiment that online advertising has been so far.” 

Rajeev Bala, managing director Southeast Asia and India, MPG Media Contacts, warns that traditional media owners who give away their online ad assets for free will quickly die off. From a website’s perspective, it has never been easier to sell digital ad-space. “Yields from in-app advertising is as high as US$20 CPM. Yields from Google SERPS can be as high as $10,000 CPM for a word. Traditional media would be stupid not to see the value of such opportunities,” says Bala.

This article was originally published in the March issue of Campaign Asia-Pacific