One of the most telling analyses to come out of the Big 3 year-end 2021 advertising forecasts was this chart (see above) pushed by GroupM to illustrate its analysis of the share of ad budgets going into digital media vs. TV for big advertisers vs. the overall advertising market.
The analysis, which varies somewhat by country, shows an overall consistent pattern that the world's largest brands still budget significantly higher percentages of their ad spending in TV than the overall advertising marketplace. And with the exception of China, TV still is the largest share of ad spending vs. digital among the biggest brands.
"If you look at the U.S. here," GroupM Business Intelligence Global President Brian Wieser said pointing to the chart during Monday's UBS Media Week ad forecasting panel, "the typical large brand is allocating something close to 50% of their budget to digital. They're allocating something like 50% of their budget to television."
"The entire U.S. advertising market," he continued, "is 64% digital and about 25% television."
Wieser noted that similar patterns exist "in every country on earth" because "the typical large brand is big enough to make use of television.
He also noted during the presentation that GroupM analyzes the total advertising market for each country based on media company ad revenues, which in many cases reflect smaller advertisers, as well as newer "digital endemic" and direct-to-consumer ones that may be allocating most of their budgets to digital.
Speaking about the disproportionate share of big brand ad budgets still going into television, Wieser quipped, "That doesn't mean for a second that they should be in television."
He noted that looking back over time there has been a clear "incremental shift" of their budgets into digital, but that it mostly has come out of other analogue media -- especially print and out-of-home -- "but it's a very incremental shift."
Wieser did not predict how long TV would maintain its hold on big brand advertising budgets, but he noted the medium will be challenged in its ability to "achieve reach and frequency goals" as more of consumer viewing shifts to big streaming platforms worldwide.
Strange stats, Joe.At least regarding the media mixes of "big spending" brands. According to the release and it would seem, the chart, your typical "big" brand spends about half of its media dollars in digital media and half on "TV". Which leaves just about zilch for radio, magazines, OOH, newspapers, etc.
That said, we at Media Dynamics agree about large spending brands being very heavy users of "TV". The reason for this is that most brands which spend $10 million or $25 million or $50 million per year on media are primarily in the branding business and most are national spenders, not local marketers. Sure, their sales promotion arms engage in search and direct response activities as well as other promotional ploys, but the TV portion of their spend is primarily devoted to selling the product/service category and, most important, selling the brand. By way of contrast, digital media dominate the spending of millions of small, often local, brands---with ad budgets of $1 million or a lot less.
In short, the overall media spend tallies, which lump everything together, paint a very deceptive picture of how branding ad dollars are allocated by medium and, accordingly, of how the various media are perceived by different types of advertisers. About 400-500 corporations, representing, perhaps, 5000-9000 individual brands account for 90%+ of national TV ad spending and most of these regard "TV", whether it be "linear TV" or "addressable TV", or CTV or AVOD, to be their most powerful mode of communication for branding purposes. Many do not feel the same way about most forms of digital media advertising---video being an exception. Moreover, it's unlikely that these assessments are likely to change in the near future.
I agree with Ed here but, as a former media Exec it is important to keep track of demand for ad time. An increase in the number of advertisers for TV is what will most likely produce the growth linear nets seek. Unless they can find ways to engage more brands, with offerings like addressability, they aren't likely to get the prices they'd like.