Tech companies like Facebook and YouTube think their businesses will continue to grow by absorbing the ad dollars once reserved for linear TV. Simulmedia CEO Dave Morgan doesn’t believe them.
On the latest episode of Recode Media with Peter Kafka, Morgan explained why TV is even more important than you think it is — in part because 100 million American households don’t have broadband at home, and tens of millions still don’t have the internet at home at all. For a big advertiser like McDonald’s or State Farm, that’s too many people to ignore.
“TV advertising is not so broken that it’s had to be fixed,” Morgan said. “It works better than any alternative. ‘Judge Judy’ today, in 30 minutes, will deliver more people-watching-advertising-time than all of the videos, all day, on YouTube.”
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But Morgan does believe TV advertising is currently broken, and his company is premised on making it better. In five to eight years, he predicted, most of the ads we see on TV will be personally tailored to us, rather than “carpet-bombed” on a mass audience.
“The fact that everybody in America gets the same ads, at the same time, for the same products, has never made that much sense,” he said. “I grew up in a small coal town in western Pennsylvania, my mother’s still there. There’s one Starbucks 55 miles away, probably not another one for 80 miles? I live on the upper west side of Manhattan, there’s more people on my block than in my hometown, and she gets the same ads.”
“It’s never been very efficient for people,” Morgan added. “It made sense when you only had a few channels, and you only had a few products — ‘There’s three kinds of peanut butter, which one are you going to buy?’ But today, when there’s thousands of products for a lot of different people, sold a lot of different ways, television needs to be made a lot more efficient to work for all of the advertisers.”
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