TV's Reach and Frequency Problem
Thus, imagine my surprise to learn that most TV ad campaigns for mass awareness-focused brand advertisers in the U.S. rarely reach more than 75% of their target audience and typically deliver more than two-thirds of their ad impressions to only one-third of their target audience. Before starting Simulmedia, and spending a lot of time analyzing anonymous set-top box data - including directly-measured data on all of the ads viewed by more than 30 million viewers in the U.S. - I never understood or appreciated how hard it is for TV advertisers and their agencies to efficiently optimize the reach and frequency of their campaigns.
Audience fragmentation on TV is bad and getting worse. Thirty years ago, the vast majority of Americans had 13 or fewer channels to choose from, and only three major TV networks to watch. Ten years ago, few had more than 30 channels and only four major networks to watch. Today, most Americans have hundreds of channels to watch and the top network in most of the top markets in the U.S. - Univision - wasn't even considered a major TV network ten years ago. Twenty years ago, cable networks captured less than 10% of TV audiences. Today cable nets capture two-thirds of viewer time. For advertisers seeking big reach, buying broadcast network prime-time is still essential, but it's no longer enough; not even close.
Critical tools have not been able to keep up. While TV's media and measurement tools have evolved considerably over the past several decades, they have not been able to evolve at the pace that audience fragmentation occurred across networks, programs, dayparts and devices. When less than 10% of the total TV audience was on cable networks, the fact that most cable nets were either unmeasured or poorly measured mattered little. Today, the majority of viewing goes to cable networks, including about 20% of viewing that goes to cable networks that are either unmeasured or inadequately measured. So it's no surprise that capturing that elusive "last 20%" of campaign reach is so hard. Conventional measurement approaches are largely blind to a lot of TV's audience.
Expensive - and hard to radically evolve - planning and buying. One of the big advantages of TV advertising is that its "trading" processes and operations are so efficient. The processes for planning, buying, selling, trafficking and verifying TV ad campaigns have developed over decades and are probably ten times more efficient than they are for online advertising. Changing processes that have been set in stone for so long is a very expensive proposition, and not an attractive one when most of the marketplace is pushing to reduce fees and costs, not increase cost and complexity.
Wasn't broke enough to fix. In spite of its issues with declining campaign reach and increasing frequency imbalance which have been creeping up on it over the years, TV advertising has always been demonstrably better in this area than any alternatives, and the problems had not yet become acute. Now, with the Internet, and its massive scale, interactivity, dynamic ad delivery, census-level measurements and web video, connected TV's beginning to threaten conventional linear TV, the long-held notion that TV advertising wasn't broke enough to fix probably doesn't hold up any more.
What do you think? Does TV really have a reach and frequency problem?