Commentary

Snippets On TV Ad Budgets and Digital Buys

A joint ANA  and Forrester Research survey of more than 100 national advertisers, representing nearly $14 billion in measured media budgets, finds that 62% say  that TV advertising is less effective than it used to be. Though they still express faith in the future of the 30-second spot, they express dissatisfaction with the current measurement techniques, an interest in more targeted ads, and a desire for less ad clutter and more relevance.

Respondents to the study said their TV ad spending will remain flat this year. They also reported allocating only 41% of their media budgets to television last year versus 58% in our 2008 survey. Other findings include:

  • 62% of respondents think that TV ads have become less effective in the past two years. Clutter is the main challenge to TV ad effectiveness: 69% of advertisers would like fewer commercials per pod.
  • Only 19% of respondents believe that the 30-second spot will be dead in 10 years, down from 28% a year ago.
  • 78% of respondents say they would be interested in the ability to target consumers more precisely, but only 59% would be willing to pay a premium for it.
  • Nearly all advertisers who responded think that the TV industry needs new audience metrics beyond reach and frequency. 82% of respondents would be interested in ratings for individual commercials.
  • 80% of advertisers agree that branded entertainment will play much more of a role in TV advertising, and 38% plan to spend more on branded advertising in 2010 as an alternative to the 30-second spot.
  • 75% of respondents believe that interactive TV will be an effective source of lead generation, but only 28% plan to spend more on interactive TV ads in 2010.

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ANA President and CEO Bob Liodice says "As the overall marketing landscape is in the midst of a massive shift, so is the medium of television... the standard methods of delivery and measurement need to adapt to what marketers today need... "

And in studying Online advertising, a new study conducted by Adify Media finds that 69% of media planners and agencies now use online advertising networks as part of their digital ad buys because of their cost effectiveness, representing a 24% increase in the past 18 months. Targeting, transparency, and quality are the top three attributes that media planners look for in online advertising networks. creative capabilities were the least important attribute noted.

Russ Fradin, president of Adify, is quick to observe that a "... dynamic Logic study that found that creative quality is 50 to 75% responsible for campaign success or failure."

Other key findings from the survey include:

  • 56% of respondents' online budgets were more than $500k in 2008. 73% were over $500k in 2009
  • In 2009, 37.9% of the respondents spent between $1-5 million per quarter on online advertising, 15.2% of respondents spent $5-20 million per quarter, and 5.9% spent more than $20 million per quarter on online advertising
  • 83% of respondents allocate 50% or more of their budget to branding vs. direct response
  • 69% of media planners and agencies now use online advertising networks, compared to only 45% who were using ad networks regularly

Fradin concludes that "As the industry looks for better ways to engage... their audience... brands need to focus on compelling creative that builds an ongoing conversation with consumers... "

To read more on TV ad budgets, please visit the ANA here, and for the online report from Adify, please go here.

1 comment about "Snippets On TV Ad Budgets and Digital Buys".
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  1. Richard Monihan, February 26, 2010 at 8:30 a.m.

    If they'd like to target better, perhaps they should purchase online video or VOD.

    There is little or no waste or "extra" in these figures. That is, if you pay for a demographic, that's pretty much what you're going to get. And you only pay for what you purchase....you don't get an ADU that could deliver the same audience. It's low frequency, pure reach.

    Why this hasn't been discussed more is beyond me.

    I've watched my kids and their friends' behavior regarding online/VOD viewing. They rarely, if ever, watch the same show more than once. But if it's on air, they'll leave it on as background noise and watch shows they've seen many times over.

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