For over a decade, marketers have toyed with digital advertising, on the web, in mobile, via search, moving dollars from traditional media like print newspapers and magazines to support these new channels. Now, with the rise of professional digital video content over the past five years, leading marketers have begun to move all or a portion of their TV budgets into digital video efforts.
But, despite years of digital platform testing, CMOs still claim to be nascent in their ability to figure out the right balance between these media, and how to make the alignment between TV and digital video work best. As time and attention move to digital experiences and access points for content and engagement, consumers’ awareness of brands will depend on forming the right mix says Simulmedia. CMOs need to learn the way forward or risk brand obsolescence.
The CMO Club, in partnership with Simulmedia and reported by eMarketer, recently conducted research to help understand this TV vs. digital conundrum and provide a bridge for CMOs who need to close the growing gap between consumer media consumption patterns and CMO know-how. The research was illuminating, says the report. Marketers get swayed by the digital allure of deep targeting and measurement, but are loathe to walk away from years of success built using TV as an efficient reach vehicle.
Based on the survey of CMO Club members, 54% of CMOs use digital video to supplement TV as a holistic strategy, yet only 31% of CMOs align their budgets for TV and digital advertising spend. This separation leads to a disconnect between the value of each medium, as 52% claim that they have different expectations across the two platforms.
For CMO Club members, digital spend as a percent of advertising budget has gone from 11% three years ago to 24% today, and they expect that allocation to rise to 36% in three years from now.
Annual Increase In Spend On TV And Digital Video Advertising (2012-2018; $Billions)
Source: Simulmedia, March 2015
TV delivers reach, but has historically not been measurable at a granular level. Digital delivers depth and is highly measurable. Three quarters of the respondents said that they measure reach the same way for both TV and digital video. Along those lines, one-third of the marketers surveyed see Nielsen as the ongoing foundation of their reach metrics, says the report.
TV will go through a number of changes as a medium for entertainment and advertising in the next few years. As the line between “digital video” and “television” blur, strategies to put the best of both to work for driving sales will become the norm, concludes the report.
This causes angst for marketers, whose job is to make the best marketing and media investments to drive sales. The old guard of TV and other mass media used to deliver valuable reach and immediacy, but this works less well to an audience whose attention fractured across dozens of programming networks, multiple devices, and the rapid growth of digital video options.
Conversely, digital is more measurable and targetable, but the work required relative to the reach provided is hard to justify, as the options for where to place a digital video ad, which creative to use, and how to scale the effort are still art, not science. The result: marketers are all over the map when it comes to optimizing the balance between TV and digital video advertising.
The key for marketers, then, will be the development of an optimized, cross-platform and integrated strategy, centered on where each unique target audience spends time. Modern media strategy is built upon the fundamentals of how customers interact with businesses, not just where they get a brand message.
In the US, digital video advertising expenditures are exploding: Digital video ad spending is estimated at $6 billion this year, growing around 42% annually. However, the actual dollars spent in TV still greatly trumps digital video. TV advertising dollars in the US were approximately $76 billion in 2014 and still growing just over 3% annually.
CMO Club members point to change on the horizon. Traditional sources like Nielsen, dependence on TV, and reliance on agency advice are all in flux, says the report.
CMOs Want To Change, But Need New Sources Of Support
Seek to buy audiences beyond Nielsen demographics
Fragmentation decreases TV spend
Agency helps balance TV and digital video
Source: Simulmedia, March 2015
Digital depth cannot match TV’s breadth. Nor should it. TV is not as measurable or personalized, so it cannot perform the magic that digital delivers. In that very unique way, TV and digital do not compete, they complement. Thus, the winning combination is the joint approach. TV’s reach and digital’s depth make them amazing partners in the marketing mix, concludes the report.
There is no playbook for optimizing your media across TV and digital. And customizing around your customers’ preferences and behaviors as well as your business and industry are essentials. Lastly, digital can range from video storytelling on Instagram and Snapchat to more digital-like targeting. The key, based on the study findings, is to find the right mix built around your customers and optimized to use the best of each media platform.
For additional information from the CMO Club, please visit here.