Commentary

TV Advertising Has A Marketing Problem

  • by , Featured Contributor, January 25, 2018

If you follow the trade publications in our industry today, you know that TV is dead in the U.S.

Everyone is cutting the cord. No one watches scheduled linear TV anymore. Millennials have never seen a TV remote control, let alone operated one of those elusive little contraptions.

Google’s YouTube now has the kind of scale that we haven’t seen since the days of "M*A*S*H."

And the only places where advertisers can actually reach big audiences are Google and Facebook, with most hoping that Amazon will step up as a major ad player soon and turn the digital duopoly into at least a three-way fight.

Right?

TV advertising has a marketing problem.

For decades, TV networks had to market to their advertisers. TV media has always been a supply-constrained market, and agencies were relied on to make sure the money kept showing up. No need to insure that advertisers, their bosses and their shareholders were aware of TV advertising’s unmatched benefits: massive scale delivered fast; deep emotional connections with consumers; sales-driving impact; incomparable pricing.

Then, the internet dawned — and for the past 20+ years, online folks have been shouting from the rooftops about the power of digital, sticking slick data-loaded reports and dashboards in everyone’s faces and calling out all naysayers as luddites, certain to be fired if they kept investing in a media channel as outdated as television, where the main audience demo is “65 to dead.”

Industry people find it incomprehensible when I tell them that “Judge Judy” delivers more audience advertising minutes every day than all of the videos on all of YouTube across all of America all day. Why are they so surprised? More than 10 million people on average watch “Judge Judy” during every minute in the show, including the eight or so minutes of ads shown each half hour.

How many people do you know who watch eight minutes of YouTube ads every day? It takes a lot of non-skipped, six-second pre-rolls to match all of those minutes.

Plus, “Judge Judy” isn’t alone. “Wheel of Fortune,” “Jeopardy” and “Family Feud” deliver similar numbers day in and day out. And if you start analyzing prime-time shows, and games from sports leagues like the NFL, NBA and MLB, “Judge Judy” pales in comparison.

Is America really cutting the cord, when Pew numbers show that 90 million of us don’t have broadband at home? The broadband-less population is not evenly distributed. It’s about 50% of those 65 and older. It’s almost 50% of folks in Missouri.

Ah, but it’s all about reaching millennials these days, right? According to Nielsen data, 18- to 24-year-olds watch significantly more linear TV than they do digital video, and a much higher percentage of TV ad time versus digital video. Incredibly, they watch more linear TV today than my cohort (those born in the early 1960s) did when we were their age. Seem hard to believe? Actually, most homes then only had one TV, and few TVs were in dorm rooms.

Maybe TV’s not as dead as it seems.

What does the TV industry need to do? It needs to up its marketing game. Agencies aren’t carrying the water with clients the way they used to. After all, they have clients who have drunk the duopoly Kool-Aid.

TV companies need to win with the numbers: Total reach. Daily Reach. Cost per reach point. Sales impact, short-term and long-term. Emotional impact. Cost efficiency.

TV advertising has great stories here. They need to be told.

Fortunately, we’ve seen strong thought leadership these past years from ThinkBox in the U.K., and lately by the Video Ad Bureau in the U.S. But we need more.

This is the time when TV advertising needs to work for its supper. Just “answering the phones” won’t yield the price normalization (increases) that TV deserves, relative to comparable digital media products. Run-of-network premium digital video prices are 3-10X higher than run-of-network national cable. How many sales claimed by search and social companies’ attribution solutions were actually influenced by TV?

 Is the TV industry ready? What do you think?

19 comments about "TV Advertising Has A Marketing Problem".
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  1. Rocky Kurland from The Magazine Guys, January 25, 2018 at 4:46 p.m.

    If only the people running print would shout their story from the roof tops for their media as well! Both have their own benefits, as does digital, but it seems the people buying the media want the fast,hip and easy way out. When the products advertised realize that a balanced approach is the best approach they will see sales up, marketing budgets increase and peace within the media world once again! As it is the digital world controled by Darth Vader rules and will continue too!

  2. Neil Ascher from The Midas Exchange, January 25, 2018 at 4:50 p.m.

    Love it when you write these Dave!

  3. Dave Morgan from Simulmedia replied, January 26, 2018 at 7:07 a.m.

    Thanks Neil!

  4. Tracey Scheppach from Matter More Media, January 25, 2018 at 4:54 p.m.

    PERECTLY WRITTEN. I pray people read the whole aritcle and don't stop at the fourth paragraph as that is certainly the naritive people are hearing. Come on TV lets get our shit together and get into the fight...the future is at risk...we can do it. 

  5. Jack Wakshlag from Media Strategy, Research & Analytics, January 25, 2018 at 5:42 p.m.

    Brilliant. This is exactly what we used to do and the TVB does it well. Your voice was always welcome.  I remember the day I was asked to compare YouTube to TV and CBS. You were there. The audience was shocked. They thought I was lying. They didn’t understand the difference between uniques and average audience. This confusion is still prevalent.  Anyone in marketing should know the difference. Brands grow when their marketing delivers reach.  TV is good at that, as is YouTube and Facebook. They can all deliver reach and if you do it wisely, you can minimize excessive frequency. But once again we are hearing people extol frequency. Just the other day I read an article that said a frequency of 9 is optimal. What nonsense. Optimizing on cost per point over cost per reach point wastes more money and doesn’t work in the end. As the brilliant Erwin Ephron noted years ago, based on tons of data, frequency is the crabgrass that come with any schedule. You want as little of it as posssible.  Thank you for this piece. 

  6. Dave Morgan from Simulmedia replied, January 26, 2018 at 7:10 a.m.

    Exactly Jack! The audience was shocked by the comparisons. Digital has great metrics related to targeting and intent and impression-level tracking, but it's rarely compared apples to apples to TV. We need concerted ground-breaking, fact driven research and evangalism to get TV advertising front and center again.

  7. Paula Lynn from Who Else Unlimited, January 25, 2018 at 7:03 p.m.

    Marketing is selling to advertisers rather than helping advertisers sell to consumers sounds like a winner. Why deal with the peons ? It is another reason why management is so poor all the way through and so many media companies run so poorly and bleed money.

  8. Ruaidhri Mag Fhloinn from TVadSync, January 26, 2018 at 7:03 a.m.

    The truth is that TV needs to show how it belongs in the new, connected, measurable world of digital. The ongoing growth of connected and Smart TV ownership is the big opportunity here. Cross-platform, cross-media campaigns are optimal and TV can be combined with online campaigns in a way that fulfills the potential of both. TV has always been best as an emotional primer, and digital so often as the conversion opportunity. Blending the two is how both (not just TV) can show their true strengths. Brand managers and marketers (as well as agency planner and buyers) need to recognize that, in a lot of ways, TV and desktop/mobile are made for each other.

  9. Dave Morgan from Simulmedia replied, January 26, 2018 at 8:16 a.m.

    Ruaidhri, there is no question of the extraordinary, un-tapped power of better coordinating and sychronizing TV and digital advertising. For sure. It's why we have seen so many e-commerce companies built through the power of TV advertising, such as Expedia; Dollar Shave Club and Chewwy. However, it is not accurate that TV needs to show that it even belongs in the new, connected, measurable world of digita. It does that every day at scales that eclipse any digital advertising channel. This is why in the world of TV advertising, demand to buy ads exceeds supply (thus, the Upfront). In the world of digital advertising, supply exceeds demand (thus, most digital ad spots areen't bought until the millisecond before the ad delivery occurs).

  10. Jack Wakshlag from Media Strategy, Research & Analytics replied, January 26, 2018 at 8:17 a.m.

    It’s precisely such thinking that is the problem. TV shows it’s value in the huge number of hours of usage. It needn’t check all the boxes needed to be an addressable vehicle to be important. It delivers unmatched reach that when ignored is problematic. It will be a long time before smart tv technology makes tv even better than today. But for it remains the dominant form of video consumption, and its death largely exaggerated. . 

  11. Ed Papazian from Media Dynamics Inc, January 26, 2018 at 8:23 a.m.

    Regarding the discussion of reach vs. frequency, while "excessive" frequency can be wasteful, there is no way to strictly define this as it applies to various advertised products and competitive brand sets. For example, when Erwin originally contended that the ideal R&F goal should be attaining a 70% reach per week with a one frequency----clearly an unattainable goal from a media buying standpoint-----he also stated that such an advertiser should do this every week. Since most ad campaigns ----with specific brand positioning strategies--extend for long periods--like several years or more, the result of buying a 70% weekly reach with a single "expoure" every week would be a huge amount of potentially redundent frequency---or "crabgrass".

    As for the "evidence", it was based on 70-80 aribitrarily selected brands---mostly packaged goods---using set usage to determine "ad exposure" and UPC scanner findings to monitor sales. What it showed was that households "exposed" a single time in a week were more likely to buy an advertised brand than those exposed two or more times, but the latter were also above par when it came to buying. Also, the effects of prior exposures were not considered. How many of the single frequency homes had been exposed to the ads the previous week, or before that---and how often?

    When it comes to frequency one has to consider how often consumers make a buying decision for a product ---its purchase cycle----and what the competitive brands are doing promotionally. Also important--perhaps vital---is the type of sales pitch you are making. Is it very complicated---hence it requires more frequency----or is it mostly a very basic claim, that everyone will get after a few exposures. Even in the latter case, you can't just hit a consumer twice and think your job is done. People forget ads---or relegate them into their subconscious, so you need to remind them with added frequency, especially if rival brands are spending heavily against you.

    While I, too, have a problem accepting that a 9 frequency is the "optimum" for ad campaigns---as if this should apply to all products and services ---I also can't accept that anything more than a single exposure is "wasteful"---which in the context of a campaign's total life makes no sense. If Erwin were here I believe that he would agree with me as he was referring to a specific and very short time frame---a week.  There is evidence suggesting that viewers who have seen an ad a number of times recently---past week---- start to pay less and less attention as more "exposures" are laid in during the same week, however, if the ad exposures are stretched out over longer intervals, the redundency is less of a factor and avoidance rates diminish. In short, how you schedule your frequency---in extra heavy, short term doses or extended over longer periods---is an important factor that media planners must consider.

  12. Dave Morgan from Simulmedia replied, January 26, 2018 at 8:40 a.m.

    Ed, excellent points! Thanks so much for jumping in. There are two things that are changing in the TV ad world that are coming into play now. One, set-top box predictive, data-powered planning systems can now help us build optimized TV schedules across dozens of networks with "ralatively" well controlled frequency. It's far from perfect, but it's getting easier to deliver big reach TV campaigns - tens and tens of millions of reach over a week with 1or 2 times frequency and only very modest deviation form most freqeuncy and least frequency. Two, with impression-level matching at the household between TV set-top box viewing data and CRM-based purchase data (retail point of sale, credict card, loyalty card), we now have much better understandings of the short-term sales effect from TV at the incremental frequency level. Having evaluated hundreds of campaiigns with this kind of data, we have seen Erwin's contentions come true. At the incremental impression level, +1 reach always drives more sales than +1 frequency. Incremental frequency close in time to purchase does continue to deliver postive impact, but almost always less than the impression delivered to that person/household before it. And, exactly to your point, "optimal" frequency varies dramatically according to the product being advertised, as well as the offer, the person, the context of the media, etc.

  13. Jack Wakshlag from Media Strategy, Research & Analytics replied, January 26, 2018 at 2:10 p.m.

    Correct as usual Ed. You are also correct that there is value to the second, third, etc. exposure. Of course there is, but almost always less value than the first. If the objective is to maximize profits, it also means that schedules should be funded until the cost of advertising is equal or greater than incremental profit. Are we trying to make more money or just by the media with the highest ROI?  We leave profits on the table if we focus only on cpms and ROI. 

  14. Neil Ascher from The Midas Exchange replied, January 26, 2018 at 2:45 p.m.

    Thank you Ed.  Where have all of the serious media research directors gone?  I don't think planners get trained with this type of insight any more.  Too bad!

  15. Dave Morgan from Simulmedia replied, January 26, 2018 at 2:52 p.m.

    Excellent point Jack ... in digital, so marketers and agencies track incremental lift and provide incremental funds deeply into the ROI curve. In TV, not so much anymore, which is ironic is it is now so much more trackable at the person/impression/ROI level than it has been historically.

  16. John Grono from GAP Research, January 26, 2018 at 5:44 p.m.

    Great article Dave.

    You have summarised TVs strength in four words "massive scale delivered fast".

    And when you consider you can do that "with just one ad" instead of the millions of ads online requires that is the unique strength of TV that all marketers need to be aware of.

  17. Ed Papazian from Media Dynamics Inc, January 27, 2018 at 3:33 a.m.

    Jack, one thing to consider regarding the various frequency levels. When a person "sees" one ad in a week as opposed to two or three ads in a week, this is not necessarily the viewer's first exposure to the campaign. In fact most likely this is not the case as the one-time viewer in a week has probably been exposed to the same ad three, five or ten times in previous weeks and all of these have cummulative effects. In professor Jones analysis of the  70-80 brands he used set usage to define OTS--"opportunity to see"---which is not a measure of ad exposure. Everybody seems to forget this. So, if we think about what really happened in those homes who were "exposed" only once in a week, in reality, half or more of the consumers living in those homes didn't see the ad at all. Yet these homes out performed those "exposed" to more than one ad, in terms of short term sales results. How come? The best explanation I can come up with is that the consumers living in the one frequency homes---who didn't see the ads---actually did see them---but previously. 

    One week is a very arbitrary time frame for evaluating the impact of extended ad campaigns and you can't ignore the cummulative effects nor can you determine which exposure was the first, sceond, third, etc for the whole campaign. It all blends together. Yes, excessive frequency can be redundent and causes campaign "wearout"  but that's why advertisers use pools of commercials and often flight their campaigns as a way of dealing with this issue.

  18. Jack Wakshlag from Media Strategy, Research & Analytics replied, January 27, 2018 at 8:39 a.m.

    As alway, you make a lot of sense. In the end, going back to Dave’s article, we both agree that TV is losing the marketing battle despite having lots to crow about. 

  19. brad berger from aim high tips, January 31, 2018 at 5:51 p.m.

    All advertising has a problem and it is called new ideas. 

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