Despite the seemingly remorseless rise in digital media and the attendant coverage it gets, it is easy to forget that TV is still by far the largest advertising medium, with its continuing and unmatched ability to deliver more consumers than any other medium to advertisers in one place at one time.

Obviously, however, TV is facing distinct challenges as media formats converge, which impacts significantly on broadcasters and channel planning agencies alike.

The launch of several new providers of web-based TV services has focused attention on a market few media players can afford to ignore.

Enter IPTV and web TV

IPTV is a technical term meaning internet protocol television. A general definition of IPTV is television content that, instead of being delivered through traditional broadcast and cable formats, is received by the viewer through the technologies used for computer networks.

Although IPTV is at an embryonic stage the potential for advertisers will include:

Improved targeting

The broadcasting of audiovisual entertainment via broadband offers better targeting of niche audiences, longer messages and greater control for the brands that can make this work. And using internet technology means that the data to back up the medium will be much more robust.

Consumers who venture online can now be targeted via their special interests or their behaviour and IPTV will enable advertisers to hit niche audiences via TV with a more tightly focused message. IPTV also offers great possibilities for expanding the value of sponsorship and ad-funded content.

Proven success

IPTV may be the new kid on the block, but demand is already strong. Channel Ten has experienced solid traction for its show Thank God You’re Here (TGYH) with over 90 percent of those visiting the TGYH site either streaming or downloading at least one show with approx 60 percent either streaming or downloading five or more episodes.

Improved measurement

IPTV means that advertisers can forget about OzTAM data. Instead of viewing figures based on a traditional panel, we shall know the actual number of homes watching each program and when they watched it. Advertisers will also be able to target ads by postcode and consumer interest, enabling offers to be updated.

In the UK there are approximately eight million homes receiving some version of Sky (UK’s equivalent of Foxtel). Within these, however, there are 20,000 Sky-homes [8000 Sky+ and 12,000 Sky digibox (basic service)], which record every single press of the button, whether it be fast forwarding ads, channel surfing, recording and so on. This data is uploaded every day and is not freely available to the advertising market… yet.

One interesting fact which may quell the doomsayers about TiVo (think Sky+ or Foxtel IQ) is that, despite the ability of Sky+’s customers to fast forward ads within the 20,000 real-time Sky homes, there is hard data to support the fact that Sky+ viewers actually watch slightly more ads than Sky digibox viewers.

Enter also web TV – a general term for television content supplied over the internet.

With an estimated 300 to 350 million global broadband users and over 80 percent of Australian households with broadband internet, this is a market few can ignore. The question for traditional broadcasters is what television over the internet, or web TV, means for their business. Meanwhile advertisers must decide whether the world of online video represents a significant opportunity, and if so, how soon to jump in. The market is also being shaken up by the arrival of new providers of web TV services, Joost (www.joost.com) and Babelgum, (www.babelgum.com), which are funded entirely by advertising.

Joost was developed by the Scandinavian duo that launched internet telephony firm Skype and music-sharing service Kazaa, and Babelgum is backed by an Italian magnate. Both are launching with TV and film content that is free to viewers and, its hoped, a raft of advertisers for whom the new services could be another form of commercial TV.

Tech-savvy internet users are already familiar with the likes of Google Video, BitTorrent and TIOTI (Tape It off the Internet) to name just a few suppliers of online TV programming.

So how will this quickly expanding market shape up and what do advertisers stand to gain in the process?

The main stumbling block to mass take-up of web TV is technological. Theres a way to go before people routinely connect their TV to the internet. Thats where the friction is in the market. The issue is how people will connect broadcast TV and the internet – essentially, its about whether we upgrade our computers or our TVs or both. Inevitably, decisions will come down to cost and ease of use.

Web TV provides a real opportunity for advertisers, with great cut-through (Joost will have just three minutes of advertising per hour) and scope for highly targeted, even personalised ads. So will ad-supported content that is free to the end-user become the dominant model?

The possibilities new entrants such as Joost could create when combining TV content with internet applications, is for Joost users to chat with friends via Skype about programming.

The best way to grow a service over the internet is to make it free, at least in the early stages. Then you can move to subscription models once users have had a chance to explore the system.

Across the board, the swiftly changing world of web TV offers plenty of opportunities for advertisers to get their messages out to online users. The next challenge is to determine which services have the highest levels of traffic and the most commercially attractive online audience. Then comparisons between the different services on offer will really start to make sense.

Whatever they say publicly, broadcasters must be wondering whether their brands are strong enough to survive in a world where consumers can access whatever content they want in a variety of ways. The emergence of Joost, Babelgum and others as aggregators of TV and other content online could allow users to bypass traditional broadcast brands and become channel neutral.