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

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.”

This article originally appeared on Recode.net.

Will you support Vox’s explanatory journalism?

Most news outlets make their money through advertising or subscriptions. But when it comes to what we’re trying to do at Vox, there are a couple of big issues with relying on ads and subscriptions to keep the lights on:

First, advertising dollars go up and down with the economy. We often only know a few months out what our advertising revenue will be, which makes it hard to plan ahead.

Second, we’re not in the subscriptions business. Vox is here to help everyone understand the complex issues shaping the world — not just the people who can afford to pay for a subscription. We believe that’s an important part of building a more equal society. And we can’t do that if we have a paywall.

So even though advertising is still our biggest source of revenue, we also seek grants and reader support. (And no matter how our work is funded, we have strict guidelines on editorial independence.)

If you also believe that everyone deserves access to trusted high-quality information, will you make a gift to Vox today? Any amount helps.

One-Time Monthly Annual

$5/month

$10/month

$25/month

$50/month

Other

$

Yes, I'll give $5/month

Yes, I'll give $5/month

We accept credit card, Apple Pay, and Google Pay. You can also contribute via