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Machine Zone CEO Gabe Leydon Predicts the End of TV Advertising As We Know It (Video)

TV ads will eventually be priced like digital ads.

Asa Mathat for Vox Media

Action star Arnold Schwarzenegger is seemingly everywhere on television, hawking the war game Mobile Strike.

So it’s a surprise to hear Gabe Leydon, chief executive of the game’s publisher, Machine Zone, talking about the flaws of TV advertising.

“The biggest thing you see out of TV — it creates a halo effect,” Leydon said Thursday at the Code/Media conference at The Ritz-Carlton, Laguna Niguel in Dana Point, Calif. “The value of what you get out of it is only really captured in digital.”

Leydon launched into a searing critique of television advertising. He said both the media companies and ad agencies benefit from a lack of precise data about who’s actually seeing a TV spot.

“It’s scary for them to actually have to price their eyeballs,” Leydon said. “It’s easier to say, ‘I have five million people.’ Where? Doing what? Do they actually buy things? Do they click on things? Are they real people?”

Leydon predicts the day is coming when the television advertising business will mirror the precise, performance-based model that Google profits from so handsomely.

“The market is dying for a sophisticated buyer to appear,” Leydon said. “If a sophisticated buyer appears, the whole market might get repriced very, very quickly. Once people have insight into how they’re spending their money, brand marketing [as it currently exists] will completely disappear.”

Leydon said his game publisher was forced to develop these tools in house to promote the company’s games, which include the most successful real-time online mobile game, Game of War: Fire Age. Machine Zone doesn’t have any current plans to license out the technology it uses to inform its media buys.

“If you run a media company, you should care a lot about performance marketing,” Leydon said. “The more you care about it, the more you’ll end up making. Actively avoiding it is what’s hurting you.”

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