By Joseph Gray
TEMECULA, Calif., Oct. 1, 2006

As the media universe continues to fragment, an already embattled television industry braces for the inevitability that will come as of February 17, 2009, the final transition date set by Congress for U.S. television broadcasters to convert to broadcast digital signals. While the benefits of digital television, like HDTV, are well known, many in the advertising world are unsure and concerned about what Multicasting will mean for an industry already struggling with media fragmentation. Already on the band wagon with Multicasting is PBS, which is currently offering consumers a choice between children's programming, do-it-yourself shows, adult education, popular documentaries, or other programming -- all from the same broadcaster.

As new channels of programming are rolled out by thousands of local broadcast stations across the U.S., the amount of television advertising inventory and competition for eyeballs will increase at an unprecedented level in the history of the medium. This technology showdown may very well represent a checkmate for today's two major television advertising models: Nielsen and Direct Response Television, both of which face their own unique challenges.

How Nielsen will rate all the new channels is the subject of much debate. What is clear is that even after 20 years, Nielsen is still struggling to rate local cable programming, which really began the current media fragmentation tidal wave. As local phone companies are building yet another platform for television distribution on the eve of the Multicasting evolution, many advertisers are feeling very boxed in by Nielsen's apparent struggle to navigate these new waters. So what are the options?

Advertisers Are Moving To Direct Response Television

Many advertisers have turned to the Direct Response Television (DRTV) approach because of the additional metrics they receive in the form of consumer response. Once the favored television advertising model of hucksters selling widgets late at night, DRTV has not only grown at an explosive rate over the last decade, it has become mainstream among traditional advertisers. The value of DRTV is that it has become an immediate way to measure the effects of disruptive technologies, such as TIVO, and has enabled advertisers to quickly identify new opportunities, traditionally restrained by Nielsen's inability to quantify viewership in a timely way across multiple new forms of television distribution and programming.

However, DRTV has its shortcomings, to. The DRTV model's biggest disadvantage is that it is a labor intensive model, and requires constant measurement and management to insure media plans are achieving the advertiser's goals of cost effectively reaching relevant consumers measured through response and resulting cost per lead. While the overhead of managing a DRTV campaign makes sense on larger network properties, it has remained a challenge for DRTV agencies to execute the model with smaller media venues where the return on investment becomes marginal. As television continues to fragment into a larger number of smaller channel opportunities -- all vying for the same eyeballs -- the DRTV proposition is further weakened. As FORTUNE senior writer Marc Gunther recently stated, " The point is, mass culture isn't so mass anymore. Instead, culture is evolving into a 'mass of niches.'"(1)

If DRTV is to be a long term answer to the onslaught of problems created by evolving technologies, what the industry needs is a less labor intensive and more automated version of the model. We can turn to the Internet---where media fragmentation is at the highest level of any advertising medium---for such a successful model, and to Google(TM), which has done a great job of aggregating Internet advertising opportunities across countless websites into a seamless, integrated and effective advertising solution. Could a similar approach be the answer for television? Could such an adaptation make it more practical for agencies and advertisers to keep on working with television properties despite the level of media fragmentation that continues to erode the DRTV model?

The answer is unequivocally, yes.

Cost-per-Action (CPA) Television Advertising is The Solution

What agencies and advertisers need is an easier and automated way to distribute and manage television campaigns across thousands of cable systems and broadcast stations in a seamless, integrated way. An approach that would allow advertisers to define their demographic, or programming, choices and then easily execute the campaign across a vast universe of television channel opportunities. What if this could all be accomplished without advertisers having to take significant financial risk or be burdened by staggering amounts of management overhead as they are today? Sound to good to be true? Well, it's not, and it's coming faster than you think.

(To Page 2)