A new report from the Association of National Advertisers shows that nearly half of the marketers polled in a survey this summer have increased television advertising budgets since 2009. On one level, those results make sense, given that in 2009 a severe recession impacted the global economy and budgets across most media were cut back. Spending in the upfront that year was down 20% by some estimates. Most of that spending decline returned the following year. At the same time, however, the ANA has done a number of surveys in recent years that indicate marketers believe less in the effectiveness of TV advertising. Last year for example, in a study done in conjunction with Forrester Research, 62% percent of the companies polled said TV ads have become less effective in the past two years, due to increased advertising clutter. Two years before that, in 2008, the ANA conducted a similar survey with the same result: 62% of the respondents said TV advertising had become less effective over the two prior years. On one hand, marketers believe that the trend over at least the last five years is that TV ads have become less effective. At the same time, it appears that most marketers accept this as a fact they can’t change, given that half have upped their budgets. Another 30%, said they have left them flat. Why are marketers spending more (or the same) on a medium they believe is becoming less effective over time? Why not shift those dollars to more effective media? Here’s the response from ANA executive vice president Bill Duggan: “A lot of traditional reasons still hold, notably the ability to build mass reach quickly. There was much chatter in the past about the television medium and 30-second spot being dead, but this survey has shown that TV advertising is very much alive, perhaps even more so than in the past," Duggan said. "Even with the risk of competition from other media platforms and the use of DVRs, there are still many opportunities for marketers to optimize TV into their marketing mix," he added. Part of the answer may also be that marketers don’t know where else to turn for more effective media. Print? Not likely. A study issued earlier this month from the ANA shows that marketers are also generally less impressed than they once were with the effectiveness of digital media. According to that report, online ads, search engine marketing and optimization, and viral video were perceived to be less effective now than two years ago. Only social and mobile advertising, the digital darlings of the moment, were perceived to be more effective. The ANA TV survey was conducted online during July and August of 2011, and polled 135 client-side marketers.
Meredith Corp. TV revenues sank almost 10% in the first fiscal quarter of 2012 -- all due to lower political advertising. Revenues were down 9.3% to $69 million. The company had $11 million less in political advertising revenues in the first quarter of fiscal 2012. Taking out political, Meredith had a slight rise of 3% to $59 million. The company credits automotive advertising improvement of 4% -- this on top of 40% growth in the prior-year quarter. Meredith says its five largest TV advertising categories climbed versus the first fiscal quarter of 2011. Better news came from the companies' TV-related digital businesses -- which grew 25%. All of Meredith's five-largest ad categories grew revenues. Operating profit at Meredith's Local Media Group, where its TV stations sit, was $11 million compared to $17 million in the prior-year period. "We were able to leverage our strong news ratings to drive advertising growth across our largest categories and markets, and once again prove local television's unique power to drive consumers to retail," stated Stephen M. Lacy, chairman/chief executive officer of Meredith. For its National Media Group, where its magazine and related online businesses are, business continued to be challenged. Operating profit was $36 million compared to $40 million. Revenues were $259 million, compared to $267 million. Just looking at advertising, those businesses sank by a collective $12 million to $124 million.
Rentrak, the measurement company using set-top-box data as a basis for local market ratings, has received an endorsement form the Gray Television station group. Gray, which had been receiving Rentrak data in four markets, has added several other DMAs where it operates. The expanded deal includes the CBS station in Colorado Springs and a triopoly in Charlottesville, Va. Gray had been getting data, which can track second-by-second viewing patterns, for the NBC affiliate in Omaha and ABC outlet in Wichita and other stations. In markets where Nielsen diaries have been the primary measurement sources for years, station groups are hoping the Rentrak system offers a viable alternative. "Rentrak provides our stations with the comprehensive, electronic, passive and highly predictive audience measurement local broadcasters have been seeking for years," stated Nick Matesi, the general manager of KKTV in Colorado Springs. Rentrak culls data from Dish Network, cable operators Charter and Midcontinent Communications and AT&T, touting itself as the only measurement company with data from a satellite, cable and telco TV provider. One argument made for Rentrak is that its data is derived from a much larger number of homes than traditional Nielsen panels.
Netflix may be hitting more than a few bumps on the road -- but from a pure bandwidth share of video it is still way ahead of other video sites. Netflix now accounts for 32.7% share of peak time video traffic -- this from a new survey by Sandvine, a bandwidth management company. This is up from Netflix's 20% share of U.S. bandwidth consumption, according to a Sandvine 2010 study. Sandvine says "peak" time period demand is a two-hour evening period -- 7 p.m. to 9 p.m. Overall streaming video represents 60% of all peak downstream bandwidth use. YouTube was in a distant second place in the current study -- 11.3% of "peak" traffic. But YouTube is still way ahead in other areas. The survey says the majority of broadband users -- 83% -- click on YouTube compared with 20% that utilize Netflix. Major differences between Netflix and YouTube: Netflix users spend 77% of the time watching its videos from a TV-connected device; 20% of viewing is on a PC; and 3% is on a mobile device. The numbers are virtually opposite that on YouTube. There is an 83% usage of YouTube on computers; 10% on mobile and 7% on connected TVs. Overall, 55% of streaming video traffic comes via game consoles, set-top boxes, broadband-connected TVs and mobile devices in the home; 45% comes from desktop and laptop computers.
Does it matter where advertisers' TV budgets are coming from? For a long time -- even when cable TV was in its nascent stages during the 1980s and early 1990s -- media sellers always asked, “Is cable TV taking money from broadcast TV? Are budgets being shifted -- or rising overall?” Answering the questions was always a fun guessing game -- and perhaps not all that crucial in the long term. Fast-forward about two or three decades. At events such as the OMMA conferences, the same question is being asked about digital platforms: “Are they taking money from traditional TV budgets?” Why such inquiries? For some digital marketers, it's important that they compete well with other media. New survey results from the Association of National Advertisers show that both traditional TV and new media are doing well. Now, one may argue that new media can be a mix of different kinds of media -- video, display, search, social and email -- with TV overlap. So this isn't an exact apples-to-apples comparison. According to the survey, 47% of marketers said they increased their TV budgets since 2009, while 23% said their TV budgets decreased. At the same time, 44% of marketers said they are creating incremental budgets for new media, up from 37% in 2007. The key takeaway may be that the number of marketers shifting funds from existing media budgets decreased to 44% from 63% in 2007. Huh. Does that mean advertising budgets could be rising overall -- more for everyone? In theory, yes. In the old days, many media analysts believed new media dollars -- for cable, for example -- flowed from that hard-to-pin down area of promotion, including coupons, special discounting and the like. Good journalism -- as well as some good media marketing research -- can be distilled into one tight phrase: “Follow the money.” But for most media budget trends, including TV and new media/digital advertising, we don't seem to be any closer to an answer. Maybe we need to just follow our instincts, hunches, and consumer data, and leave it at that.