Commentary

Re-Space, Not Replace

 

Gone are the days when kids rushed home from school to catch their favorite show only to fight over the remote control. Instead of sacrificing life and limb for control of the TV, people now view videos on multiple screens -- computers, smartphones, and tablets. In fact, according to Nielsen App Playbook, more than half of the audience multitasks on the Internet while watching TV.

As a result, traditional TV advertisers are looking to make online video a more integrated part of their overall media plans, and for good reason. A recent Nielsen/IAB study found that people who saw a video ad across all four screens, (TV+PC+Phone+Tablet) correctly recalled the ad 74% of the time, an increase from 50% ad recall when they saw the video on TV only.

So the question is: how should advertisers allocate their video budgets? To shed light on this topic, we recently sponsored a study utilizing Nielsen’s Shareshift analysis to estimate the impact of allocating some of a company’s TV ad budget to online video. The study revealed that assigning even a small portion of a TV advertising budget to digital video can have a big impact on campaign performance.

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Shifting $2 million in ad dollars from an $80 million TV advertising budget to digital video provided:

  • A 22% increase in total number of impressions with TV+Online versus TV alone
  • A gain of 44 gross rating points (GRPs), reducing both average cost per impression (CPM) and overall cost per point (CPP)
  • A 21% increase in GRPs

The data show that the question is not whether advertisers should allocate some of their budget to digital, but rather, how much of their budget should be allocated to digital. As the industry has evolved, this question is becoming easier to answer. For now, advertisers can gain insight by:

 

  • Maximizing online reach by working with a large network partner.
  • Select a partner that actually understands research – It seems like everyone says they offer research, but many don’t provide support or guidance, so advertisers are on their own to figure out how to interpret results. What advertisers really need is a partner who has the technology and expertise to translate data into digestible and actionable information.

Advertisers won’t completely replace TV advertising with online video any time soon, but they should allocate part of their budgets to digital. Broadening the scope of traditional campaigns to the “four screens” – online, TV, mobile and tablet – will enable advertisers to make the most of their ad dollars and stay ahead of the audience’s shift in viewing habits.

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