MediaWave Actionable Insights and Industry News for Media Professionals
Woman standing in front of a wall of TV screens.

The New TV – A Marketer’s Heaven. Have Marketers Been Misled by the Digital Advertising Industry?

May 2nd, 2019   ||    by Gary Milner

At this year’s NAB Show in Vegas, Bob Hoffman, the author of four Amazon #1 selling books about advertising, gave a talk lamenting the changes in the advertising business. He started the presentation by asking what the results of the digital advertising have been. He stated, “The results have been tens of billions of dollars of ad fraud, corruption and kickbacks (although that was probably around prior to the internet), FBI investigations, bots, hundreds of millions of devices loaded with ad blockers, privacy nightmares, security breaches, election tampering, secret files about us in the hands of people we don’t know that exist, the degradation of journalism and the disdain of democratic government and the public. Other than that, it’s been *** great.”

The essence of his view is that brands haven’t been built online, TV is better at building brands and he had a nostalgic wish to the great days of TV and TV advertising. He said TV advertising isn’t dead, which during the internet advertising boom was heralded many times, but it did not happen, it just stalled.

Arguably this is all true, but money follows consumer behavior. As consumers read content online in growing numbers, shopped online (researched and bought) and communicated online, the money followed the audience.

In the end, TV audiences declined, view time from 265 minutes a day in 2009 to 215 in 2019, the number declined by 10 million viewers and the only growth age group was the 50+ market, with all other groups declining, younger groups with the highest loss. So, advertisers moved money to the growth areas. The ones that that still spend run the risk of over frequency on select audiences (older groups).

So, what were the growth areas that drove online advertising?

  • Internet usage went up 70 million from 2010 to 2019
  • Mobile phone internet use grew 110 million in the ten years up to 2019 (everyone has a smartphone, almost)
  • 140 million broadband home subscriptions arose from 2005 to 2018

This resulted in the ad pie changing, a $150 billion total ad business in 2010 became $238 billion in 2019 with dramatic changes in share (online from 16% to 54%), TV from 40% to 29%, although the absolute money amount grew, and magazines/newspapers shrunk from 25% to 6% (half the ad revenue in 10 years).

There is no denying the power of the TV to drive a brand but with eyeballs going elsewhere and shopper behaviors changing, the ad spend morphed and grew into digital.

All that happened was the golden age of television  coughed and sputtered, it did not die.

So what next?

The existing TV ad business will digitize as smart and connected TV’s become the access point for big screen watching and others enter the TV ad space (Netflix/Amazon). Even today Amazon is running static entry screens on Fire TV devices that turn into video for Marvel and Disney movies.  This is TV advertising, just different from days gone by.

$66 billion of digital spend today (half of all digital) is video and display. Some of this will morph into digital TV spending as part of a digital consumer journey from the top of the funnel to sales. This is maybe why Facebook is so keen on Watch as it knows brands may start to shift money as TV digitizes.

What is left of the ad pie is search (40%). Some of that will become voice search that drives video ads and continue to pick up organic growth.

The net is that the second phase of the golden era of TV ads will start, based on audience targeting, less waste, higher CPM with the measurement of outcomes.

What this will need is integrated teams, smart creative executions linked to analytics and automation to stamp out inefficiencies. Companies like Videa  are pushing the envelope to drive that in the local broadcast TV ad business along with other tech partners.

So, Bob may lament the good old days, but they may be about to return. The industry is morphing, access to the consumer is now possible directly without intermediaries (cable, satellite, local broadcasters) and technology can deliver creative cross-device by user, all tied to an online purchase.

A marketer’s heaven.

*all statistics in this article were as published by eMarketer, 2019

Tags: , , ,

Share this page:

Share on Facebook Share on Twitter Share on LinkedIn Share via Email
arrow_upward