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TV and online advertising: Which one leads?

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The Internet has complicated the technical delivery of Pay TV and the supporting business of doing so, advertising in particular. But just as fears of cord cutting have proved so far to be over-blown, the idea that the Internet would steal large chunks of advertising from the television is also failing to prove out in practice.

The practical model is turning out to be neither Cold-War enmity nor strained coexistence, but something more complementary, if not equal, wherein the television retains its role as the dominant screen, with a benign influence that extends to secondary screens. Numbers from a U.S.-based marketing firm released this week sustain that thesis, indicating that TV ads can drive online revenue.

In a post on TV Board, Jeff Zwelling, CEO of Convertro, shared test results that show television advertising boosting revenue per click for online and offline marketing channels. Looking at the impact of TV advertising across a range of exposure, Zwilling’s team saw “increases in both traffic and conversions as a result of TV exposure; some of it quite profound, such as an increase of more than 63% in the rate of conversions.”

A marketing measurement and optimization firm co-founded by Zwelling, a serial entrepreneur, Convertro is one of many players that has talked (or blogged here) about the need to supplement if not replace Nielsen data.

Commenting on the Zwelling post, Stephen Pickens, Group Account Director at Kre8 Media, pointed to the growth of media multi-tasking and the ability to attribute responses in the online world to recently aired spots on various networks. Pickens noted that while online advertising should be part of any online marketer’s media mix, “it tends to catch customers at the bottom of the funnel.” By contrast, TV “is great for introducing brands to consumers and compelling them to respond.”

Focused primarily on direct-response television, Kre8 conducts backend research on where advertising messages should be placed to reach the right audience at the right time and right prices. It then uses proprietary algorithms to track responses and optimize schedules. Reached separately for comment, Pickens found the Convertro data credible. “Some of their responses are consistent with what we see with our clients,” he said.

The Internet’s capacity to yield valuable information about consumer preferences and behaviors has driven much of the enthusiasm toward that channel. “Data is the new creative” — that has been one mantra of this new era, at least since the former CEO of Canoe Ventures David Verklin said it (see GigaOm) in November 2008. This year’s demise of Canoe, the U.S. cable industry’s effort to build an interactive TV advertising platform, revealed current limits to blending online and TV, though not to the value of data.

What the Convertro results indicate is the TV’s continued ability to spur consumer behavior (something it has done for decades), in this case online purchases. â€œThe only thing more surprising (than the Convertro results) is that some people didn’t realize it at all,” wrote wrote Durward Price, CEO and Founder of eAccountable, in another posted comment. “Online marketing has never existed in a vacuum.”


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