So let me be straight -- Thinkbox and I have a history. The group that is there to fight the corner for the television advertising industry doesn't like to be told the obvious. Hence it came to pass
that an article I wrote in a national half a dozen years ago, which said the youth are more switched on to the likes of YouTube, led to heated calls and a softening of the tone of the article online.
Thinkbox had a point back there and then, but at the same time they missed the overall disruptive wave that was looming large in front of them.
Any organisation that fails to see that
digital changes everything will often point to figures and stats that show they are doing great, just as I'm sure King Canute probably felt for a stage that the tide was a little way off coming in.
So we have the latest figures from Thinkbox saying ROI for a pound spent on television advertising has risen by around 9 pence. It's obviously a lot better than a drop, but barely means ROI
has improved by half a single percentage point in the past three years. Compare that to any figure for digital and you'll get a stark contrast. If Facebook were to stand up and say we've improved ROI
by half a percentage point since floating, they'd probably be laughed off the investor's conference call.
The truly interesting part is that the rise in television's ROI is being put down
to second-screeners. Those of us watching "The X-Factor" with a tablet or smartphone at the ready are the ones responsible for Web site traffic and hashtag use rocketing when audiences are given a
call to action, such as getting a cheaper home insurance quote. Ironic, isn't it, that the ultimate brand-building tool is now being propped up by the direct-response mechanism of appealing to the
second screen.
There is a real sting in the tail here. To reach second-screeners, you don't necessarily have to advertise, although it obviously helps. If you are smart and can operate in
real-time, savvy advertising and marketing executives can jump in on conversations about shows and pick up on trends without ever committing to advertising. Brands looking for popular appeal can join
in conversations around "The Voice" and so on during, throughout and after the show while more highbrow audiences could be reached as a compelling drama starts and then just as it finishes (don't
interrupt as the plot unfolds).
So of course television is not dead. It has huge appeal, particularly in a country where we're all glued to popular shows. In addition, the ability for SMEs
to run local campaigns on a channel like Sky's AdSmart is a serious boost for the industry.
But the glory days are over. They really are. There will still be good money paid for "X-Factor"
adverts featuring beautiful, high-production-value adverts from household name brands. But budget is only going to go one way, and that is always going to be toward digital. A major theme among huge
FMCG brands at the recent Adobe Summit this week in London was how expensive television still is, despite channel fragmentation and the allure of digital. The general feeling was that by moving to
real-time marketing and advertising inevitably means moving to digital, particularly when several countries are brought under one roof. The data is better, response times are quicker and the budget
stretches a whole lot further.
So flagging up the second-screen appeal make sense but channels need to be aware that they are as much of a risk as they are a saviour. Direct response will
be initiated -- of course it will -- but marketing and advertising is moving to real-time, 24/7 and smart executives are figuring out a way to join in conversations they didn't have to pay to start.
Hello Sean,
Thinkbox again. Sorry. History repeating itself!
Still not seeing that disruptive wave you‘re so keen on. Certainly ‘digital’ has been troublesome for newspapers and the music industry. But the wave of digital innovations that has flooded telly (itself 100% digital) has generally been good news. They’ve enhanced viewing through greater quality (bigger, better screens) or greater convenience (ability to record, watch on-demand, interact).
‘Glory’ in advertising is best measured by effectiveness and the study you refer to– commissioned by us but carried out independently by Ebiquity– shows that TV advertising is in pretty glorious shape. TV delivers the most profit of any ad medium £ for £: an average return of £1.79 for every £1 invested. This is based on econometric analysis of Ebiquity’s database of 4,500+ ad campaigns across 7 years. It also echoes the Radio Advertising Bureau’s recent study, which Thinkbox obviously didn’t commission.
You say TV’s ROI has increased by 9 pence (from £1.70 for every £1 during 2008-2011 to the £1.79 during 2011-2014). 9 pence may not sound like much to you but, say an advertiser invests £1 million in a TV campaign (many invest a lot more), that’s £90k more pure profit on top of the £700k they already got, on average. Not to be sniffed at.
You say Facebook would be laughed at with that sort of ROI increase. Notwithstanding comparing what Facebook MIGHT do with what TV is PROVEN to do (and the fact that TV fuels Facebook), have you seen independent econometric ROI studies about Facebook? Ebiquity were unable to do one as the data to do so isn’t there. If you have proof, please share. Ebiquity found online display (excl. VOD) had actually decreased in effectiveness.
There are several reasons for the rise in TV’s effectiveness, one is multi-screening as it reinforces live TV and means ads can be acted on immediately. Others include advertisers’ more sophisticated understanding of multiple TV ad opportunities and integrating them; a golden age of TV content creating a higher quality environment; and, crucially, the falling cost of advertising on TV.
But, blessing though multi-screening is, TV is certainly not being propped up by it. It is something a few people do a lot, many do a little, and some don’t do at all. TV advertising has many powerful and proven effects, like building long-term brand fame, which don’t need multi-screening – the IPA’s ‘Advertising Effectiveness: the long and short of it’ is a must read. Multi-screening is a nice addition to TV, but by no means a requirement for the success of its advertising.
I don’t understand how you can say ‘budget is only going to go one way…towards digital’. TV ad revenue in the UK increased by 3.5% in 2013 to a new record of £4.63 n, according to AA/Warc. That is the 4th consecutive year of growth in the UK and the AA/Warc are forecasting it to grow again by 6% in 2014.