istockphoto.com / Terry Morris

©istockphoto.com/Terry Morris

You know that scene in Austin Powers, with Dr. Evil’s henchman screaming in horror as the giant steamroller inches its way towards him from across the room? To me, it’s a good depiction of how media companies are continuing to brace for the ongoing impacts of digital technology and an on-demand world.

Digital advertising has transformed the traditional media business. In the broadcast world, advertisers are no longer steadily buying ads adjacent to “appointment television programming.” Personal video recording systems like TiVo allow audiences to set their own appointments and watch programming when they want. Brands today are finding innovative ways to speak to consumers while measuring marketing ROI within digitally-driven social environments like Facebook, on-demand services like Hulu.com and performance-based search advertising on Google.

Television still reaches more people than any other ad-supported medium. But broadcast delivery technology leaves much to be desired by advertisers. Unlike online media’s impression-based advertising model, television ads are unable to reach or target audiences with the same granularity.

There is no way to traffic TV ads on the “viewer level” because subscriber-based data is currently protected by cable TV service operators. If service operators were to release subscriber data to advertisers, ads could be targeted based on household viewing habits, channel loyalty and patterns of viewing. This is Broadcasting 2.0! It’s very similar to how “tracking cookies” are used to unlock the Internet’s targeting capabilities for advertisers.

The folks behind Hulu.com understand how much more targeted its advertisers can be on the Web compared to television. A joint venture of Disney, Fox and NBC Universal, Hulu allows U.S. viewers to watch advertiser-supported TV shows and movies on demand, for free. Hulu has the best of both worlds: a captive audience and advertising that that can be trafficked down to the individual viewer level. Advertisers that buy ads on Hulu can measure ROI better than on traditional television because of the targeting data made available by cookie tracking on Hulu’s site. As Seth Godin noted recently, viewers will gladly pay attention to advertising “if it’s anticipated, personal and relevant.”

Broadcasters can also look to the world of inflight entertainment for inspiration. Desperate for distraction during a recent 7-hour+ Air France flight, I happily sat through 30 to 45 seconds of car ads before watching a feature film and a few episodes of my favourite TV shows on the inflight system. Despite the variety of content I viewed, I counted only two unique advertising pre-rolls over the course of my flight, which suggests that Air France’s system does not traffic ads based on my viewing behaviour.

But airplanes are already a highly distinct and targeted viewing environment. Airline advertisers have a pretty good idea of who I am and what sort of products and services I want. Television advertisers don’t.

In the next few years, our television screens will become our computer screens and our cell phones will carry our content above the clouds. Doesn’t it make sense to provide advertisers with the technology and control they need to actively participate in the evolving viewing experience? If broadcasters and cable companies can’t put the power of Broadcasting 2.0 into the hands of advertisers, I bet services that understand the audience’s needs and the role of advertising might actually steamroll the entire industry.

What do you think about advertising’s role in an on-demand world? Are ads a necessary evil or do they add value to the overall media experience?