Commentary
Many TV Networks Growing -- Just Not The Big Ones
- by Dave Morgan , Featured Contributor, October 20, 2016
First, overall TV viewership is not falling off a cliff. After four-plus decades of extraordinary growth, there is no question that the average amount of time Americans spend watching old-fashioned TV plateaued over the past few years and has now begun to decline. However, this overall decline is in the very small single digits annually.
Second, yes, it’s true that most marketers’ TV campaigns have been delivering significantly less reach quarter over quarter for years. But this is not a capacity issue.
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TV has not lost overall reach. In fact, its overall ad-reach capacity has never been greater. What’s changed is that TV audiences have fragmented their viewing across hundreds of different channels and all of the dayparts, and most major brands keep making the same buys. They’re chasing the few shows with bigger ratings without trying to understand how to scientifically and efficiently re-aggregate the fragmented audiences. Doing so is hard work and takes time and investment, all in short supply in media buying today.
Third, many, many TV networks are actually growing their viewership, a number of them quite substantially.
Yes, the large broadcast networks have lost viewership. Average ratings for the top broadcast nets are down 23% over the past five years, and the top 20 cable networks experienced a similar 23% decline in average ratings over that time period as well. However, mid-sized cable networks only saw an 11% ratings decline over that time.
And, most importantly, average ratings for small cable networks like Ovation, NBA, Logo, FOX Sports 2 and Chiller grew their average rating by 21% over that time period.
Also, critically, the declines suffered by broadcast and large cable networks were substantially isolated to prime time. Collectively, networks only saw small single-digit percentage losses in non-prime dayparts.
Campaign reach has fallen on TV because buyers (and planning and measurement tools) have been too slow to activate on smaller networks (all of which deliver more audience ad minutes every day than any YouTube star).
Here’s what I think our industry must do to make sure that we don’t kill TV advertising long before it’s given way to the inevitable over-the-top future that we’ll see in the mid-2020s:
Act as if you care about reach. TV media buyers worked hard to maximize reach 10 and 20 years ago, and clients rewarded them for doing so. We need to get back to that mindset again.
Blindly buying wide and deep is not the answer. Just buying deep doesn’t guarantee reach. Advertisers need to use precision in complementing big and small spots, or they’ll just buy more frequency against heavy TV viewers.
Audit campaigns for reach. Marketers should audit their campaigns for reach, and should require TV media sellers to “post” on reach, not just GRPs. If you don’t measure it, you’ll have a tough time managing it.
Integrate reach analysis cross-channel. Someday, we’ll have omnichannel reach measurement across all media at the person and campaign level. While we’re not there yet — and probably won’t be for years – there is a lot that can be done to integrate and coordinate reach across the largest-reaching media channels, like TV and social. It’s time to start trying.
What do you think?
Good one, Dave. I should point out that media buyers---as opposed to media planners---do not consider reach to any great extent---especially in the massive up front and scatter national TV buys --as, in such cases, they are buying for many brands at the same time and reach is assumed. It's only when one drills down to the brand by brand planning function, where reach and/or frequency patterns come into play and these needs are supposedly, albeit informally, dealt with by the adevertisers' media folks when they dole out the corporate purchases to the individual brands. This is where there is a real need for more sophisticated "allocation" models.
Also, it's important to recognize the inbred assumption held by TV time buyers and, let's be frank, by the broadcast networks and some of the larger cable programmers, that "big"---audience-wise----in and of itself equates with quality and viewer impact while "small" is simply a sign or poor quality content and less viewer interest. This, of course, is nonsense, however, it is firmly locked into the national TV buying and selling system with CPM tiers favoring high rated networks and channels with higher CPMs based only on average minute audience size, not demographics, attentiveness, ad recall, etc. Until that roadblock is broken---and this will be a difficult and long drawnout task as many advertisers have also signed on for merchandising and ego reasons ( "look, I'm sponsoring a big time TV show" )---it's going to be dificult to make progress in using TV more effectively.
Dave, quick thoughts on one point you made, perhaps you and others who comment here can respond (I see Ed Papazian has already been here.) About viewing habits -- how much fragmenting of viewership among the range of dayparts could be due to the steady increase in baby boomer generation retirees over the past few years? Statisticians have pointed out frequently that this age cohort is large enough to affect measurement and prediction of economic and social behavior. In the 1970s, we (I am in this bracket) had an ipact on labor force growth and all related ecominc activity. Before that, the suburbs grew like crazy as our parents moved us out there. Now, are enough of us at home during daytime hours to affect the observable viewer trends? To the extent the answer is "yes," measurement has to catch up. We're measuring and interpreting wrong.
Henry, thanks in large part to the wide array of cable program content, the composition of TV's average minute daypart audience s has been changing---with more men watching in the daytime and on weekends, mainly because now they can find suitable content on cable and elsewhere, whereas in the past, they couldn't. Also a factor is the unemployemnt factor, which is higher than the politicians would have you believe as many people have just given up seeking jobs and, as a result, dropped out of the "labor pool". Here, as well, the main impact has been more viewing of cable and other fare in the daytime and late night hours---again, at the expense of the broadcast networks which offer, essentially the same kinds of shows they have provided for decades in these timeslots. Naturally, the broadcast networks are the primary losers in this process, however, cable ratings are also fragmenting due to the rapid increase of channels and, of course, alternative sources of content.
This is a rather broad and scathing brushstroke. Reach targeting remains an essential KPI for us at all IPG Mediabrands agencies and is NOT something we have sacrificed at the altar of efficiency. IPG Medibrands agencies have proprietary tools that enable us to optimize reach across different video partners using behaviorally defined targeting data and these results can be validated in Nielsen to ensure common transactional currency consistency and efficiency. The premise of audience buying is in fact following migratory viewing patterns to maximize reach.
Moreover, we have L&D professionals with practical media expertise to ensure that the evergreen principles of audience builds, reach optimization and adapting of those principles to today's media landscapes are inculcated throughout the organization. We are not bewailing change; we are using new data and new viewing for better targeting and better business results.
Good point, Dorothy. I should have mentioned in my first post that media planners decide TV daypart mix recommendations and in some cases program and network type ( broadcast vs. cable ) mixes to generate certain levels of reach and/or certain frequency configurations. While these get lost in the huge, multi-brand upfront and scatter buys, later, when the announcements are allocated to the brands, they play a major part---or should, if the advertiser's media peoiple are doing a good job.
Really great points Ed. Yes. The cultural change will be the hardest for the industry to accept, and might not happen because of that.
Excellent points Dorothy. There is no question that IPG Mediabrands and a number of other agencies are making big investments in tools and systems to optimize their TV media spend. However, if you analyze that thoussands of national campaigns that run every month for their actual reach delivery at teh person and impression level, they almost all exhibit decling reach over time, in spite of the face that TV overall can still deliver the same reach that it has for many years. Without question, much of it is a result of the issues that Ed raises - separation of planning an buying, upfront buys, allocaiotn to brands, ego buys. You continue to see very little, if any, precition buying in cable networks numbers 40-100 and in overnight and daytime dayparts, all of which can add very meaningful reach. It may be a rather broad and scathing brushsgtroke, but the post-cmpaign data proves it true. I am hoping that we as an industry fix it before we lose client budgets for the wrong reasons.
Thanks Henry. I think that there is no question that we're seeing more daytime and overnight viewing as a result of both employment issues and changes in how people live and work in their lives, in addition to the heavy retiree viewing mentioned by Ed. There is no question that much of the daytime viewing is my younger folks as well. Net. Net. TV can now deliver big audiences in all day-parts.