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Digital television and its effect on advertising revenue

The good news I heard recently is that Digital Television will soon hit the shores of Malaysia.

Digital television is already swiping the world by storm. The technology is enabling worldwide viewers to be engaged on a completely new level. Advertisers have learned to manipulate the technology to reach new and existing consumers. Digital television is a generic term to describe the process of sending digital signals to the device. Analog television is still available in some parts of the world and advertisers are primarily giving up this ancient mode in favor of digitalized formats. Digital television will have a bigger impact on advertising revenue as more homes and businesses switch over to the better platform.

History of Analog and Digital

The analog transmission involves encoded audio and video signal, it represents a continuous variation of amplitude, frequency of the signal. The old school bubble screen televisions used analog signals for picture and sound. Until the last stages of the technology, the sound and picture quality were always lacking a certain depth. Analog limited the quality of the picture and sound. There was no pop up interactive menus. Analog television offered at the time, a near endless spectrum of programs that you could enjoy. Do you remember VCRs? They ran on the analog platform and to compare with blue ray or even a standard DVD player is downright silly.

Digital television has expanded beyond its first generation. Most cable systems are digital and even now, most offer a high definition signal. Digital formats are different from analog; it can carry a larger load of signal. This means better sound and picture, especially with a flat screen television or a HD screen mobile device. Besides having a full spectrum of sound and picture, you can experience interactivity. The first generation of digital television was often disputed as time wasters. The next generation offers a higher quality input to the personal devices. This allows the user to interact with shows or events that are streamed to the television.


Analog and Digital Technology

Analog ran on systems using NTSC, PAL or SECAM and using an RF modulation for the signal modulation for VHF or UHF carrier. The image is drawn on the screen, giving the human eye the illusion as one image. In old cathode ray tube televisions, the image is scanned in pattern of horizontal lines. The color television used a signal known as chrominance to control the color of the spots. The biggest issue with the analog television was the lack of storage for video signals. The luminance signal had to be generated and sent at the same time while the CRT was in work. The maximum frame rate depended upon the bandwidth of the electronics and transmission of the signals. As you can see, the Analog offers a limited depth, even with the launch of Plasma screens and LCD’s.

Digital television offers a vast improvement in technology for both the end user and for advertising agencies. The transmission of the audio and video is digitally processed. There are different digital TV types, depending on location and broadcasting station. The local region will differ in the type; such types include the Digital terrestrial, Digital satellite, Digital cable and Internet protocol television. The main benefit of digital television is that it uses fewer frequencies than analog, which means more frequencies are freed up for other services. These types fall into two primary categories, high definition video or standard definition television.

The Digital terrestrial is for those upgrading from analog to digital services. The digital signals are received by the antennae and are common in newer televisions. Digital satellite televisions receive signals from a satellite dish and is converted by the TV or processed by a convertor. Fiber optic cables to the cable box for conversion deliver digital cable TV. The IPTV uses the broadband connection to access television services.


Analog and Digital Platforms

Analog devices are almost all gone, except in a few remaining countries. Most countries in the Western and Eastern Hemisphere are either digital or over 60% complete. Analog devices are limited in their ability for users. The last of the analog devices for entertainment or information used is dying out. Such examples are the Old Cathode Televisions, record players, 8 track players, cassette tape players, first generation electric typewriters and many others. One of the most recognizable analog devices was the old computer monitors. These ancient platforms limit advertiser’s ability to push their marketable products. The investment is not worth the time.

Some digital platforms include newer computers, laptops, mobile devices, smartphones, high definition televisions and others. These platforms are expanding on a regular basis and advertisers are mixing up their advertising with television and online. There are tons of cross overs for the digital television world. Such hybrids include TV tuners for laptops, smartphones, etc. Most new televisions are used to access the internet. This new level has opened up doors in North America and is shifting nicely in Europe and other highly developed nations. The digital horizons for the world are changing the way that advertisements are displayed and interacted with by the consumer.

Analog Advertisements

Analog advertisements are still playing a big role for global companies. You will find these advertisements in all types of industries. They even are still used on regular television, found on the internet and mobile devices. They are cost effective solutions but are very limited in engaging their audiences. This type of mode is not likely to give up the ghost anytime soon. They do lack the prowess and interactivity of digital models. Most Eastern countries are still Analog heavy because the cost involved in creating digital advertisements. It is agreed that Analog ads have surpassed traditional print mediums in the way of reaching a targeted audience.


Digital Advertisements

Digital advertisements are gaining ground in some European and Asian cities. Asia is not expected to be digital until 2020 but could be as early as 2015. Digital ads across the whole spectrum of mobile and non-mobile devices are reaching audiences on new levels. The high intense colors, sound and environments are enabling advertisers to reach deep into the minds of their audience. The cost of producing one digital ad can be quite expensive. This will not stop most companies from reaching its cash restrained budgets to produce ads for television or for mobile devices. While digital ads are similar to analog, there is a new breed of interactive digital ads. These ads are making a big impact on revenue for the advertisers and their host companies.


Interactive Digital Television for the Home

Moving on to new ground, the interactive digital ads are making big moves in the Western world. Over 60% of all homes having cable, satellite, internet or a combination of these elements, there is a significant impact on consumers. Companies can dish out all types of digital advertisements to further its marketing and sales conversions. These companies can target specific demographics without blundering into a cold market. This means more of a controlled distribution of their advertisements to the right people. This means a higher conversion rate from the consumers that are most likely to purchase a product from their favorite companies.

The type of interactive ads can already be seen on sites like YouTube! The video plays a little message and offers an input method from the viewer. A great example of digital interaction is Netflix; the viewer has options to narrow down their favorite movie genres. Their software can then make recommendations based on the activity of the viewer. If a viewer is lazy and does not interact with the program, the recommendations of movies will not be accurate. Other interactive ads that can be found include online gaming MOGs. The ads request for you to sign up and download the client software for a B rated gaming experience. The best part of interactive ads is that it is not limited to just television or the computer but can cross over to reach the right audience.


Television vs. Digital vs. Print 

Traditional television for the global network saw a closeout in advertisement expenditure of over $500 billion in the fourth quarter for 2012. Digital advertisement on a global basis hit $100 billion in 2012. This is expected to grow tremendously in the next few years. It does not hit as hard as Television but as technology grows in third world markets, digital ads will dig deep into advertiser’s pockets. Global newspapers saw a measly $96 billion in revenue for 2012. The clear winner at this point in Television advertising but Digital ads are expected to grow, especially with interactive ads.


Digital Ads Affect Revenue

In today’s market, digital advertisements are climbing to the top. The technology that supports the consumer on the go is always changing. Digital ads can pinpoint their exact audience, combining this element with interactive features. The advertisements can make a direct impact on direct profits for the advertiser and for the publisher. While television
(analog) is still champion, it lacks the personality of interactive digital ads! The high definition advertisements are grabbing attention and embracing the consumer. The initial investment may be higher than other means but distribution across all media types means more reach.

The digital landscape is changing the way that consumers are thinking and believing. The interactive element plays a huge role in determining the outcome for the publisher. There is a lot more of “humanity” traits involved in the digital ads, than any other method. The full on color options allows for nearly endless environments for the advertisement. The advertiser has a variety of options in creating the digital ad. The publisher can chose what type of platform they want to distribute on, from digital television to smart phones. Digital television is a new playground for advertisers to offer their products; eventually they may use more interactive ads to involve their audiences.


The Future of Digital Television

Digital television is here to stay, with new technology releasing every few years. The advertisers can push their products through a variety of digital tools. This will engage the audience, while driving up revenue for themselves. The digital interactive ads will become a hot trend, engaging with your prospective audience allows for more personification between companies and their audiences. This will allow companies to gain loyal consumers and build on their reputation with targeted ads that fits their criteria. Traditional television ads may eventually become a dinosaur due to the increasing number of devices going online. Only time will tell of the digital platform that is evolving advertisements for the consumer.

By the time, the average consumer acquires the new service for an affordable fee. The technology that is behind digital television and the ads will already have advanced. This does not mean that they cannot afford the service or technology behind the scene. It means they need a faster way to deal with the evolving world around them. The advertising companies may have to deal with the slower technology in order to build to a new level. This could mean hi tech companies will either suffer or keep the aging technology a little longer.

The outcome will depend on the education of the general populace and the open mindedness of the technology that is coming soon. The people will either accept the fast pace changes or reject the idea of a faster connection. The reality of these changes will not be known for a few years yet. Until then, the marketing teams will have to attract interest and increase their revenues through all popular channels. If a revenue channel happens to close down due to lack of interest, there will always be digital television and its supporting technology to help boost the income potential. There will always be a form of analog technology for the next 10 years or so. Digital will be leaving a lasting impression on the world around us.