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Critical analysis on any article from FORTUNE magazine - Essay Example

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This article, written by Alice Fung and Stephanie Mehta, "How the Web will Save the Commercial" discusses the implications of the recent technological innovation, the Internet Protocol TV (IPTV) on the $278.8 billion advertising industry. The basic premise is that IPTV is set to change the way people watch television and consequently, presents new challenges for marketers to come up with new channels and methods to effectively reach their target audience.
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"How the Web will Save the Commercial" This article, written by Alice Fung and Stephanie Mehta, "How the Web will Save the Commercial" discusses the implications of the recent technological innovation, the Internet Protocol TV (IPTV) on the $278.8 billion advertising industry. The basic premise is that IPTV is set to change the way people watch television and consequently, presents new challenges for marketers to come up with new channels and methods to effectively reach their target audience.
With IPTV, people would have the convenience of having the video content they wish to view converted into digital format, allowing them to chat on their screens and program their DVRs with their phone. Also, they will be able to choose what and when they wish to view their preferred programs. However, this does not spell doom for advertisers because IPTV can also, like the internet, customize its advertisements to the viewer's preferences and TV watching habits. This makes it easier for marketers to make sure that their message is delivered to the select audience for whom it was intended, and IPTV therefore, can be a "godsend" for advertisers.
At the moment, IPTV has not penetrated into the mass market, but this will surely change by next year. And the advertising industry is all set to take advantage of this as big companies are looking for alternate marketing channels owing to the lackluster response and growth in the conventional advertising medium: network television. Products such as TiVo ensure that consumers are not exposed to any advertisements. The Internet has also significantly altered the advertising media mix because when advertisers place their messages on popular Web portals and sites, they end up reaching a much wider target audience in a cost-effective manner, as compared to TV which is expensive, and where the audiences are shrinking every passing year.
What IPTV promises are these targeting and measurement capabilities in the form of a point-to-point service, where every television in a household could be the recipient of advertisements tailored according to their demographics and TV viewing habits. The potential benefits do not end here: IPTV will change the very nature of these ads. It would enable viewers to pause the ad, click on a specific icon, and find out more information about the product right there and then. While all of this may sound a little too hi-tech to be true in the very near future, IPTV is definitely going to be reality some years from now, judging from the interest shown by major companies and the heating up of competition among the already existing players in the market.
For marketers, the implications are serious. While IPTV lures them with greater potential for effective advertising, it also demands that they be more creative if they wish to match the sophistication of the technologies advertising media can employ today. However, while the customizability benefit of IPTV might lead to a heavy inflow of money into the advertising industry, it might also lead to a pricing model which varies with the extent of advertisement the viewer wants to view, and if the viewer wishes to view none at a premium price, then the very benefit of IPTV stands void. In any case, this article is an interesting and informative one because it enlightens viewers about how rapid technological innovations are changing the dynamics of the advertising industry. The era of mass marketing is long gone, mass customization has entered the advertising arena, and marketers must create new strategies for the changing environment to cash in on the benefits which systems such as IPTV have to provide.
Reference
Fung, Alice and Mehta, Stephanie N. "How the Web will Save the Commercial." Fortune 152.3 (2005): 58-60. Read More
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