Commentary
TV Is The Worst (And The Best) Advertising Medium
- by Maarten Albarda , Featured Contributor, May 14, 2021
The world is slowly showing signs of normalcy, and as we move toward summer, we may also watch less content on the big screen in our homes. During the height of the pandemic, we gobbled up mountains of content across streamers, on-demand, on CTV, and what not. But it’s likely this trend will be affected going forward by all of us going outside, maskless and fearless, empowered by being vaccinated and knowing one in two adults (roughly) are, too.
The smallest of screens, our phones, are probably least affected as a result. Always on and always there, the phone will continue to serve as the go-to drug to fill any short void in our daily lives with a video snack.
The biggest of screens, cinemas, might see a form of revival because of the pent-up demand to enjoy movies with all the impact of big-screen sound and vision, fueled by a number of potential blockbusters held back for when the world would arrive to the point where we now (almost) are.
But that big screen in your living room and/or bedroom, coupled with all the streaming options you signed up for? Well, that may see some downtime.
Ratings have already plunged, and not just for former ratings champions like the Oscars. Sports is down, as are most regularly screened TV shows. Streaming and CTV have massively grown in share and attention, as well as share of spend on all these services.
Meanwhile, we are entering the upfronts, where the ratings are down and the prices are up. Whaaaaat? That’s right, TV remains the one medium where you get less for more every year, guaranteed. First that was defended by changing the program ratings to a rating+3, adding the additional viewers from the first three days after the original broadcast. Then that became a rating+7.
And now nobody knows exactly how to defend the ratings decline and price increase anymore. So the argument is rightly shifting to where it should have been all along, which is dissecting TV’s effectiveness versus all those other screen options.
It’s here that TV continues to outshine most everything else. Per a new summary document prepared by The Global TV Group, TV clearly demonstrates its superior effectiveness. From study after study across the world, from Australia to the U.K. to Germany to the U.S., TV is found to be more effective, driving better ROI, higher short-term and long-term sales, brand effectiveness and more.
This is exactly what advertisers should care about, and what should influence their budget allocation. It is exactly what agencies should spend time analyzing so they can help guide a marketer’s investment across screens.
Alas, TV is not sexy. Instead, marketers and their agencies want to discuss how to participate in the podfronts (yes, that is now a thing!). They debate how much money to allocate to Clubhouse vs Twitter Spaces, and how much should be spent on YouTube Shorts, the TikTok competitor.
My plea is this: Invest where your audience is and where you know you can generate meaningful impact, instead of making assumptions about where you think, hope or dream they are going to be.
Maarten, TV is not the only place where costs keep rising but you get less each year. That applies to most of the products or services that advertisers promote in their ad campaigns. It's called inflation. When you buy a box of crackers or a bottle of shampoo or a new car and compare what you get for the money with what you got and paid ten years ago for the same product you will see exactly what happens with TV. Now you pay more---because the manufacturer's costs have risen and these are passed on to the consumer----but you get the same or less. TV advertisers understand this as they face the same issues in their own marketing operations---how to balance higher costs with how they price their wares to the consumers and still make a profit. Invariably, the solution is to give less relative to what the consumer pays.
As for advertisers using TV more effectively---by which you refer to the way TV or alternative forms of TV/video time are bought, I happen to agree with you. But there is a huge disconnect in the advertising system between the CMOs and agency big wigs and the media function. Generally speaking, the former believe that brand/product positioning strategies and "creative" are the major priority and they pay little attention to the numbers heavy media planning/buying aspect. This is the only explanation for their lack of interest or action---in reforming their time buying practices. They don't understand what might be gained by changing their ways and nobody is trying to convince them otherwise. It's a sad state of affairs.
@Ed writes "...you will see exactly what happens with TV. Now you pay more---because the manufacturer's costs have risen and these are passed on to the consumer----but you get the same or less."
Could not disagree more. Production costs have gone down dramatically and the product gets worse on TV. You get less for more.
TV is not held to the same high standards as digital formats. Agencies and marketers are demanding less of TV and more of digital - arguably because most agencies are not staffed well enough to move millions of dollars into digital platforms and TV is just an easy way to move massive amounts of $$$ with less effort.
The industry needs to redefine "watching TV" and agree on standardizing evaluation creiteria regardless of the distribution method. The experience watching Netflix or YouTube or Amazon Prime or Twitter video on a 55" TV is no different than watching NBC or Discovery - the exception being that the OTT platforms offer more content with fewer commercials.
Dan, if you think that the costs of TV program production have declined tremendously you must be thinking about the cost of home made videos posted on YouTube---not the kinds of content that any self respecting TV network---or station, for that matter---puts out. I can't imagine where you got that idea from.
As for the lazy agencies putting their clients into "TV" as opposed to digital---because it's so much easier to buy "TV" that's a standard and totally wrong belief which I have heard for decades from the advocates of other media---magazines being a prime example. The reality is that the agencies do exactly what their clients want them to do when it comes to media selection---not the other way around. And, in case you didn't know it, the agencies eagerly jumped on the digital bandwagon when they saw the very high fees that digial media was earning relative to traditional media. The basic problem is that your national TV advertiser isn't some local small fry who doesn't know very much and tolerates all of the BS that goes with digital media---the huge buying and ad distribution costs, the lack of reach, the absence of independent third party audience verification, fraud, lack of ad visibility, a major part of the audience protecting itself with ad blockers, having a programmatic buying system buy time or space next to offensive content, etc. etc. Over the past five years many national TV advertisers have given digital a long, hard look. What they saw was great potential but a totally broken system---so they continue to alocate 60% or more of their ad spend to "TV" and only a fourth of that to digital. Don't blame the agencies for that. And, by the way, national and local TV isn't as easy as you think to buy.
Agree to disagree, Ed. We create content and work with production partners the create content for major TV networks and the costs have come down substantially over the last decade.
Regarding your comments on digital, you couldn't be more far off on the majority of your points with fraud, distribution costs, lack of reach, third-party verification....all sound like problems that were addressed over a decade ago. if you personally are running into those issues, I would question who you choose to partner with.
Finally, call it a philosophical difference. If you feel that "agencies do exactly what their clients tell them to do when it comes to media selection," that is too bad. Along with other agencies that we have been fortunate to work with, we see our clients as partners. We see ourselves as an extension of a client's team. We challenge our clients to think differently. If agencies are just doing what their clients tell them to do, it's no wonder so many traditional agencies are struggling. Anectodaly, I've had several media directors tell me that it's "easier" to move TV money around than take the time to educate and debate media mixes with clients. Doing what's easy doesn't mean it's what's best.
I've been buying and selling media (national and local TV and radio too) for over 20 years - I never said it was easy - but I stand by my statement that the inudstry has become complacent by not forcing Nielsen to implement better technologies while doing a better job of educating itself on digital solutions.
In closing, if you are paying more for productin now than you were 5 years ago and you think digital is fraught with high costs and deception and lack of reach, and that agencies exist to do what their clients tell them to do, I will just leave it at we must be working in two different worlds.
Dan, it does seem that we live in two entirely different media worlds---one of us seems to be from Mars, the other from Venus. Let's leave it at that. Cheers.
Ed, you are incorrigible.
Michael, it's not a question of not being willing to listen or fighting the facts. It's more a question of what are the facts?