What happens to advertising now that one Spanish TV station has removed all their commercials? Is this the power of web being maximised like never before?

The Spanish advertising landscape changed significantly on the 1st of January 2010 when the country's public service broadcaster TVE took the decision to drop commercial ads from its channels. The European media community will be doubtless watching Spain closely since this move may be indicative of what's to come. 

TVE's decision is further evidence that the economic climate is shifting the balance of advertising power to new media. According to the latest data from IAB Spain, interactive media has become the third most profitable advertising format in Spain; the internet accounts for 11.3 out of every 100 euros ad spend in the market, newspapers €19,4 and TV €43. However, it is worth noting that despite a fall of almost 30 per cent in global advertising revenues and compared to disastrous falls in other media, online ad volumes remain almost unchanged compared to previous years.

It is clear that the Iinternet has radically changed the dynamic of the relationship between brands and consumers. The ability to reach customers in a more personalised and relevant way is one of the unique advantages offered by online. One recent trend that highlights the benefit of internet advertising is the rising popularity of performance advertising models; clients only pay for results, whether this be direct sales, subscriptions to a service etc. This makes impressions-based ad models obsolete and points to the industry's next logical step. In this context, the best campaigns will be those that are individually targeted to put the best offers in front of the consumer at a time when they are most likely to make a conversion.

As internet Protocol television (IPTV) services, such as the Project Canvas partnership in the U.K., start to take off across Europe in the new decade, advertisers will face new challenges in defining the delineations between TV and internet advertising. As both platforms merge key issues to address are what constitutes a TV viewer as opposed to a web user and thus by what standards should advertisers measure the success of campaigns?

Ultimately interactive media will gain increasing market share and the effectiveness of any campaign, regardless of format, will be down to the level of detailed information about the user and hence how targeted ads can be. To provide users with real value, ads must be tailored as accurately as possible to their preferences and advertisers will need to convince consumers of the benefits of targeting to the extent that the user will be happy to share that data.

Untargeted branding campaigns, whether on television or online, do not generate the results advertisers now realise are possible through Internet targeting, therefore TV advertising revenues in their existing form are unlikely to survive into the next decade. Before IPTV and the new advertising opportunities it offers becomes widespread it's inevitable that many commercial broadcasters will need to change their revenue models or fall by the wayside.

Of course online advertisers cannot afford to be complacent; once IPTV services are established and have similar levels of controllability as current internet advertising ad spend may revert to traditional advertising agencies. However the power will lie with who controls the user data that will allow these ads to be targeted successfully, in the ideal scenario the internet and IPTV mix will offer more ways to deliver ads and agencies will invest to cover all targeted ad formats. What's clear is that TVE’s controversial "golden announcement" has implications extending far beyond Spain and there will be many lessons to be learned from the Spanish media landscape in 2010.

Vincent Labey is the founder of Aedgency.