Recap from ITA TechWalk Breakfast

On November 20, 2006, I had the pleasure of participating in a roundtable workshop at the ITA Technology Walkthrough conference. Information about the TechWalk is here

The ITA TechWalk promotes year-round continuous conversation between technology providers and content creators/producers. ITA’s razorsharp focus is to connect all of these players to get Interactive TV deployed.

I recapped the Breakfast Roundtable Workshop with guest speaker, Steve Oedekerk of O Entertainment.

Pick me! Pick me! Me! Me! - Donkey

After eMarketer’s findings, Jupiter Research revealed their own study that the media and entertainment category will indeed outspend other groups on online advertising. The 4 leading categories (M&E, financial services, travel and automotive) are estimated to spend a total of $11.5B on online advertising in 2011. Of these categories, only M&E is most relevant to those under 25. Further breakdown of the study reveals that M&E is estimated to spend more money on search advertising than the other 3 categories.

This is a no-brainer I discussed in my previous post that young people (ala the targets) are spending more time online than traditional entertainment. They are not surfing aimlessly but are focused on finding what they want quickly. So, search would be the right tool to acquire those targets. Generation Y/Millennials consume more than 24 hours of media each day, even with their limited free-time, because they have been trained throughout their formative years to multitask way beyond our adult comprehension. How else could they juggle 6-plus homework assignments nightly, extracurricular activities, keeping up with friends, etc… and still maintain their sanity?

Harris Interactive and Teenage Research Unlimited conducted a study in June 2006 and found that 13-24 year-olds spent 17 hours a week on the internet while only 14 hours a week watching television. This may be a more generous bias towards television than in reality. This is because television is the passive media playing in the background while other more interactive platforms consume more of their attention (Hence, the multitasking skill). This is where the lean-back experience of current television will come back and hurt them. Television has the content but interactive television what time-strapped consumers will pick to engage in. So what if the numbers are smaller than before? These consumers actively sought you out. That type of consumers is a keeper. [Disclaimer – I work with the Interactive Television Alliance)

I believe the children are our future. Teach them well and let them lead the way

According to a recent research report from eMarketer, Hollywood has only spent 3% of their marketing budget on online advertising. This compares to the average of 5.7% of all industries (estimated 2006 online ad spending = $16B divide by $281B Total media spending estimated in 2006).

This is ironic since the same young people that Hollywood is trying to reach tend to get their movie information online more so than their older counterparts. (MPAA did a study in April 2006 and found that nearly half of 18-to-20-year-olds saw one or more movies per month in 2005, compared to less than a third of those 30 and older). However, the same eMarketer report forecasted that online ad spending by Hollywood will increase to 8% of total media spending by 2010, which is still almost a whole percentage point under the forecasted internet-to-total-media-spend of 8.9% ($25.2B divided by $284B) by 2010. One would have thought that Hollywood’s online ad spending would be above the average amount, which in this case, doesn’t seem to be.

By 2010, the teen population (ages 12-17) will reach about 20M and a staggering percentage of them (~84%) are internet users. Since, this being the target audience that goes to the movies frequently, it only makes sense that Hollywood’s priority should be to reach them where they hang out, ie online. Moreover, this demographic group grew up entirely with the internet and is certainly savvy enough to differentiate between relevant ads pushed to them (and maybe even pull relevant ads themselves) and plain crap. Advertising online where the target audience feels an affinity to the product can certainly leads to the audience paying for the product. So, Rupert Murdoch had the right idea 12 months ago after all.