Commentary
Why TV Dollars Won't Go Online -- In 10 Words
- by Joe Marchese , February 6, 2014
I promised you 10 words for why TV dollars won’t go online, and there they are.
Think about the Super Bowl this past weekend. Super Bowl XLVIII was a blowout in more ways than one: The big game pulled in approximately 111.5 million viewers (its highest ratings ever), generated over 24 million #SB48-related tweets, and interactions (post, comments, and likes) from 50 million Facebook users. And it’s likely that you don’t just remember the expression on Peyton Manning’s face when the game turned sour for the Denver Broncos; you probably also remember the Budweiser ad with that adorable dog.
The Super Bowl is an advertiser’s dream for a reason. In our age of ultra-fragmented media, it’s one of the only television events left where high-volume impressions are guaranteed on behalf of millions of Americans, and advertisers are paying a huge premium for this. A 30-second ad during the game cost a whopping $4 million. Prices will keep going up, even as we live in an era of DVR, ad skipping, and more channels than anyone actually wants. That’s because people are paying attention to Super Bowl ads, and they’re paying attention because they know they’re going to be good. They know that brands invest an enormous amount of creative resources into producing something that’s memorable, not half-hearted or annoying.
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And this problem is at the core of why TV dollars aren’t going online.
The idea of an “impression” in digital is so wildly different from what it is in TV -- especially high-quality TV like the Super Bowl -- that comparing the two is like comparing apples and oranges. Sure, the CPM for a high-quality, professionally produced online video ad can be appealingly low for an advertiser. But the fact of the matter is, the definition of an “impression” online is ridiculously loose. The most common definition of a TV ad “impression” is 100% of the screen for 30 seconds --100% viewable, and with 100% “share of voice” for advertisers to deliver their creative. Digital impressions are mostly defined as 50% of an advertisement viewable for one second, and there’s not even clear consensus on that.
Things just don’t match up. And that’s why you don’t yet see excitement about digital ads the way you do for Super Bowl ads, or even plain old TV commercials. The standards aren’t the same for measurement or creative quality. When it comes to online ads, too many people still think of those annoying punch-the-monkey ads from a decade ago.
The industry has got to stop complaining and start working to change this. Our warped idea of what constitutes an online “impression” is the underlying reason why online ads are treated so differently from TV ads, and not just by the people who view them, but by the very people who create them. We’ve all seen those graphs that show consumer time spent online versus watching TV and how spending online versus TV doesn’t match up.
But what the Super Bowl shows us is that digital still doesn’t offer advertisers what TV has offered advertisers for decades. Where there are people paying attention, prices go up, and rightfully so.
Why not make the definition of a digital impression more like a TV impression: 100% viewable, 100% share-of-voice, for a
full 30 seconds? This would cause digital advertisers to totally rethink what they’re putting on the screen, realizing that engagement involves investing in a deep, creative thought process.
If this became the new standard, TV might have some competition. Because right now, the matchup is about as painful to watch as seeing the Seahawks shut out the Broncos last Sunday.
This article is warped toward the few tv events that even get close to 100% viewable. Sports in general are the best for that but for most TV... once you strip out the tablet, heads down , ad skipping, restroom visiting majority, the idea of 100% ad views on TV is nonsense.
A very good point, although as a counterpoint, I'd note that the Superbowl is a very usual TV experience. The inventory for things like that are insanely limited -- which is why they get $4 million per slot. But there just aren't enough opportunities like that to satisfy the demand for marketers to reach their audience.
Make that "a very UNUSUAL TV experience"
Very good point by Joe even taking into consideration some of the comments. Where I continue to be amazed is that the consumer is often left out of the equation. CPMs are between advertisers and publishers. Where is the value proposition for the consumer in this equation? As online CPMs are driven down to ridiculously low levels, it is an insult to the consumer regarding the value of their time and attention. TrueX is working to try and solve that problem and I applaud them. But the argument are often locked in the publisher / advertiser frame of reference.
Great post as usual, Joe. Though I think you glazed over the most important point. "People are paying attention to Super Bowl ads because they know they’re going to be good." Crazy thought -- what if advertisers focused on making good ads for the 364 other days of the year?
TV, for all of the grousing of its waste is still the one place that a lot of people show up at exactly the same time and stay engaged with the content for a very long time, relative to the content snacking of online. Scarcity, to Scott's point, is why costs are so high and were high in traditional media. Online publishers, seduced by the idea of creating more inventory created their own problem and killed their own CPMs by carving up the most visited pages. Supply and demand still rules even in digital.
Before we totally throw digital media under the bus....let's think about this in a different way. How many Super Bowl marketers ran commercials last week..? 40+ ? How many marketers have run Super Bowl commercials in recent years and have NEVER returned..? NOW...let's get a count of the number of marketers who spend a significant and growing amount of their budget online. The numbers aren't even close. The REAL trend is that MORE marketers have found more efficient ways to reach their target audience via digital channels than those who continue to spend BIG dollars via network broadcasts. As the networks ratchet up costs around "reaching" 105 million viewers...significantly more marketers are finding most efficient alternatives to not only reach their target audience...but more importantly engage with their customers. Didn't see one Amazon ad on the Super Bowl...hmmm....wonder why...
TV = 4 minute+ ad pods which is enough time to do something else or skip. On line TV, at least = :30 or :60 a few times only a few times during and hour show so grin and bear :30 is not too bad, but much smaller screen. For a video short ?
Yeah, Joe's point here is that the Super Bowl is NOT a usual television event. It gives us a window into the value of what would happen if all commercials (and digital ads...) had better attention, quality, and creative effort.
This article is outstanding. Sure, the comments are interesting and some are valid but there is something more important going on here.
So long as those of us in the digital media industry speak, think and act as if we believe that the 100 LNA spend $65 billion a year in TV advertising because they are dumb, we will do a terrible job of tipping that money to online.
Only when we embrace the idea that these world class marketers spend all of this money on TV because they are really smart marketers will have the epiphanies that we all need to have if we want to tip the money.
Pissing on what is broken in the TV channel is not making anybody look smart, it is not building trust with important decision makers and it is definitely taking the slow path towards the TV money that we covet.
Well done, Joe. At least you are trying to get some of us to think about the value of TV advertising in ways we should try to emulate. But, be warned, the digerati will attack you for it :-)
@Corey - great point. You hit on exactly what I think Joe is eluding to, which is that digital ads afford the opportunity to take all the best attributes from TV, and marry that with the best of the web - a deeper, more engaged and customized consumer experience. Instead - it's take the content made for TV, rinse and repeat for web.
I can explain it in two words: No scale.
It's simple economics: there is no scarcity online. There is almost infinite online ad inventory while there is a finite amount of TV inventory. When you combine that with the respective impression sizes there is little chance for CPMs to catch up.
As Joe describes key points of the evening with facial reaction and puppies, it reminds me again that it is the entry cost of EMOTION that you pay for....whether TV and other traditional channels or digital delivery. It is less about the delivery mechanism and more about the ease of engagement that comes inherently from a super bowl or favorite band concert stream, or even the once delicate delivery of Jerry Lewis's fundraising event. Creating the connection and finding that connection is easier with big events like the bowl but it is also being developed through technology with consumer data and what an individual needs and likes. @onroutedigital
Personally, I think the tipping point will be when Programmatic hits its prime, and Programmers are able to figure out how to prevent showing the same damn pre-roll to a consumer within a 30 minute window online. Fortunately, no matter what, content will always be king!
TV sure isn't equal to online for annoyingness when it comes to the presence of commercial scam-spammers.
I think it is indeed an issue of supply and demand and how much supply is available in the marketplace is directly dependent on how we are define an impression and what type of content is even worthy of advertising in the first place. I'm sure if I turn to the public access channel at 3 AM in the morning, I'll probably come across something with low production values and amateurish quality but by the same token I would never see a :30 run there. I also would never be buying a :30 for a show that never aired or that nobody watches, which is what the TV equivalent would be for fraudulent traffic and unviewable inventory. As an industry, we have stop perpetuating that myth the long tail is filled with gems waiting to be tapped into. Much of the long-tail should never even have a single ad to begin with, let alone 8 or 9 crammed onto a cluttered page. The problem is that the long-tail is artificially inflating the actual number of ad impressions in the marketplace, thereby driving the illusion that there's plenty of inventory around when a bunch of that inventory shouldn't even exist in the first place. And now we're seeing the long-tail drag some top-tier publishers down into the muck with them. Every time, I see a slideshow, I cringe because we all know those aren't clean impressions being generated. I can go through a slide show in 3 minutes and generate 60 impressions because each image is placed on a new page and I see another 3 ads every time. And the irony is that this impression gaming can go on even under the new standards of viewability because I would've spent at least a second on each of these pages and the ads could easily all be in-view. It's time for us to set more stringent standards on viewability. Why not just make it a :30 second requirement with a 100% in-view requirement. If I can't spend 30 seconds on a piece of content, it probably wasn't good content to begin with.
Real time events like the Super Bowl and a couple of award shows a year can draw an audience back to scheduled television but that won't sustain the TV model. Particularly as only one channel gets to host the show.
TV is more valuable at present because people know it is expensive. It gives the advertiser credibility to have outbid others for that advertising space. It shows they have cash. Online advertising lacks the exclusivity or associated credibility. It's an almost unlimited space.
Trying to judge TV on the Super Bowl is like estimating outdoor from Times Square. It's just that limited space at Times Square that creates the exclusivity. Nothing wrong with outdoor, while people still leave the home it will work.
As people discover streaming they aren't going back to the scheduled channels and they are gravitating to the ad free streaming like Amazon and Netflix. It will take a generation but there are going to be tipping points.
The future will arrive after a long delay but it will arrive, and yes, there will still be a Super Bowl with an audience.
My head hurts from the sheer level of idiocy this article manages to pack into a single page.
Seriously, the dumbest thing I've ever read on Mediapost. 1997 is patting you on the back, Joe, congratulating you for never leaving the comfort of its embrace.
The reason advertisers waste money on the Superbowl is that they get to go.
Awesome column Joe. Really great column Mark. The future of digital video advertising will be special when we realize that TV is preeminent for a reason, and we are able to apply digital technologies and models to make it even better.
I agree with the sentiment here that TV advertising is still king - the "fast and vast" aspect of TV advertising is just hard to emulate within the online sphere with its fragmentation. Just to add to the discussion on the eye-on-the-screen aspect of TV advertising - research shows that typically 1/3 of viewers watch ads while the ad break is on, 1/3 show passive avoidance (e.g. fiddling with their cellphones, talking to other people in the room, but still within the TV environment), and 1/3 actively avoid TV ads by leaving the room to the kitchen, loo break, and so forth. Even with this factored in, online advertising still can't match the reach that TV advertising produces.
One thing also to remember with all the hoopla dedicated to Superbowl is that whilst it's true that a large number of viewers watched the match and were exposed to the ads and to the brands, it's much better if the brands also maintain their advertising throughout a longer period of time - be on the mental shelf a lot longer than just during Superbowl. Otherwise, other brands that are actively advertising throughout the year will end up being the victors.
There are arguments for and against TV vs Digital spending trends but if we stick to the Super Bowl as an example, what is most interesting is how the online platform was used to showcase the ads before the Super Bowl as well as discuss the ads during/after the Super Bowl. This is another (increasingly common) instance of TV and digital coming together from a marketer's perspective. Rather than try to prove that one is better than the other, it would be more profitable for both sides to look at opportunities for integrating the two platforms.
If the viewer doesn't want to see the crap it will never get the engagement you're after. Its that simple. Everyone wants to see the $4-8 million dollar ads on the super bowl because they are the super bowl of ads. When you're on the Internet you are trying to get from point A to point B. Having a speed bump in the road that an advertiser hopes will interrupt your travel is never going to work. Unless the Internet is segmented into niche communities that address advertised niche products you will never engage the person using the Internet. You are still an annoyance preventing that person from getting to his destination. Television is not a keyboard/mouse/monitor. Its not even close.
Here's an easer way anyone can prove to himself/herself why video ad $ will lag TV $ forever >>> spend about 5 minutes trying to watch the Olympics on NBC's site - what a god awful experience...made even "awfuler" when you get a 30-second pre-roll before EVERY 60-second recap of a snowboarder's run....
Jeff - Your words, and reasoned argument have moved me. I can see in your analysis that you obviously have a deep perspective on the matter. Will try to do better next time.
For everyone else with the positive comments, thanks for coming down to my level ;-) Here are some thoughts:
Bruce - Agreed that the Super Bowl is made all the better by everyone's expectations of quality commercials, it helps with the delivery of real attention. This is something I plan on exploring further as we look at different types of attention.
Owen - Agree that they cannot sustain the model, but in absence of alternative quality attention sources, laws of supply and demand tell us that they will get more expensive. More importantly IMO is what they can teach us about where money really wants to be spent.
Dave - Thanks for the kind words, but we should probably wait for Jeff to help educate us better before agreeing that this was actually a meaningful discussion.