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A new Forrester Research/Association of National Advertisers survey says TV marketers plan to spend 41% of their media budgets on television in 2010 -- the same level as a year ago. Still, this was down from the 58% level of two years ago. The survey says this illustrates a continued lack of confidence in the effectiveness of television ads.
The survey looked at 104 U.S. advertisers in 21 industries, representing nearly $14 billion in measured media budgets. It included companies such as Cisco Systems, GlaxoSmithKline, ING, Kraft, Marriott, State Farm and Clorox.
Some 62% percent of companies say TV ads have become less effective in the past two years due to increased advertising clutter. Worse still, virtually all advertisers believe the TV industry needs new audience metrics beyond reach and frequency; 82% of respondents would be interested in ratings for individual commercials.
But one sign that has turned around for TV marketers: The expectant lifespan of the 30-second commercial. Now, 19% say the 30-second spot will be dead in 10 years. This is down from 28% a year ago.
The future of addressable advertising is showing some mixed signals. While 78% are interested in targeting consumers more precisely, only 59% would be willing to pay a premium for it.
Future branded entertainment deals will grow, according to 80% of advertisers. And in 2010, 38% say they will spend more on branded entertainment as an alternative to the 30-second commercial.
Social media, Web advertising and search are stealing budgets from TV and other media. Of those surveyed, 77% said they would be moving TV dollars to social media this year; 73% plan to shift money to online advertising, and 59% will be spending more on search-engine marketing and 46% on e-mail marketing.
Other non-TV traditional media doesn't seem to be part of this trend. Only 15% said they plan to increase spending in traditional media such as radio, outdoor, magazines or newspapers.
"CMOs need to prepare for television's digital future by forcing change upon the TV advertising ecosystem," said David Cooperstein, vice president and research director of Forrester Research.
"We recommend that advertisers get ready for the future of television by preparing to deliver targeted commercials, delivering true branded entertainment experiences and embracing the connected TV."
The survey findings will be presented at the ANA's "TV and Everything Video Forum" on Feb. 11 in New York.
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The decisions and budgets on TV ad spends have been just as emotionally based as they have been rational. Newspapers were the first to work to transform their relationship with consumers and advertisers, now it is time for TV and Radio to do their part. This will be a positive for the industry in the long run. Excited to see how it transforms. In the meantime, online spends will continue to gain momentum.
But what if the way marketers used TV advertising were to change...dramatically? What if it became part of a true conversation-centric marketing strategy? What if it played to the strengths of social networking?
I don't have any reason to favor one medium over the other -- and that's not my point. But perhaps the problem with TV advertising today – and all other advertising for that matter – is that it ignores the emergence of the empowered consumer in an internet everywhere world.
At Media Logic, we're recently published a whitepaper entitled "Conversation-Centric Marketing: Making Sense of the New Social Order." It offers a new model for marketing and puts all media - paid, earned and owned - in a new context. I invite you to check it out and share your thoughts. Whitepaper and video are at www.mlinc.com. Comments are welcome on our blog, www.logicaljuice.com.