TV Stands Firm, as Online Falters

Pre-tax profits; revenue streams; advertising spend. Yes, we’ve reached that time of year again when the TV advertising industry swells with financial results.

The figures gleaned from such reports can be and often are extremely illuminating, providing those working in the industry with year-on-year patterns in spend and delivery.

However, your attention may have been piqued by one key finding from the latest wave of such profit proclamations; an insight completely out of sync with the general attitude exhibited by media commentators over the past year. The ‘incongruity’ in question is that, despite regular articles and soundbytes from analysts suggesting that TV is on its knees – with online the tormentor holding a shiny blade to its throat – Q1 of 2015 delivered an unprecedented 11.5% of YOY growth, whilst the rate of growth achieved by online has slowed by 6.8%.

Online Advertising Flaws Exposed

Digital advertising is suffering particularly from an increased incidence in ad blocking – with 39% of UK adults and 80% of laptop users having downloaded and used such software as of 2015. This trend is also migrating to mobile and tablet devices, with 19% of users on each platform avoiding display ads; in total, the rate of digital ad blocking rose by 70% year-on-year during 2014. Ad avoidance is becoming such an issue for YouTube that the website is believed to be toying with the idea of creating an ad-free subscription-based version of its service. Others are trying to ban the creation and use of ad-blocking software altogether, a fight destined to a futile fate.

The general consensus is that the issues being experienced by internet advertisers are a result of poor planning and execution, a growing concern in the online sphere that has seen many brands gravitating away from the medium. This is a particular issue for digital news publishers, which have seen their advertising revenues drop by an alarming 7.8% year-on-year.

We are acutely aware of the value internet marketing can carry for brands, but we would also argue that online works best when acting as a supplement to TV. Issues arise when it is utilised as the core component of a strategy. With mobile and the app revolution changing the face of the World Wide Web, it appears publishers and agencies are struggling to keep up, with the current digital options available to advertisers failing to correspond with the mobile user-experience of convenience whilst also falling short in terms of engaging content.

TV Sponsorship Flexes Its Muscle

As online sits on its stool catching its breath, in the other corner we have TV advertising bouncing energetically, gloves slamming together in anticipation of the next round. Buoyed by the growing popularity of TV sponsorship, product placement and advertiser-funded programming, TV is offering brands more attractive options than ever before.

TV sponsorship has proved particularly influential in maintaining TV’s momentum. Research from Thinkbox shows that brands who utilise TV sponsorship see their brand frame increase by up to 10%, with the evolving capacity to integrate branded content within the UK’s most popular TV shows allowing brands to form positive associations with fans of such programming.

TV sponsorship is becoming increasingly effective as a tool for new businesses, particularly those online, with the scope and visibility afforded through it proving crucial as a fame builder prior to larger, wider campaigns. The close relationship between TV and online from a dual-screen, immediate response point of view further improves the effectiveness of sponsorship, boosting brand awareness and consequently online search, traffic and sales.

One further factor in TV sponsorship’s growth is the fact that brands are now getting considerably more value for money than they were a decade ago. Now, businesses buying a sponsorship package are not only securing a spot in a TV show, but also takeovers of entire web pages and additional inventory on other platforms – representing a new cross-media-platform approach called ‘bundling’. This is despite the fact that sponsorship pricing continues to remain consistent; in essence, you’re paying the same rates, but receiving a lot more for your coin.

TV advertising stands firm

As for linear TV – the core at the industry’s centre – the news is just as positive. With better quality programming generating higher audiences and more advertising revenue – some of which then goes back into the programming – the appeal for TV advertisers continues to grow. Additionally, innovative new technologies such as Sky Adsmart continue to rise in popularity.

In the last twelve months 70% of Adsmart’s business comprised of advertisers new to the market, whilst last year Guerillascope’s hyper-targeted planning itself attracted 52 new brands to the fray. With a record 800 new or returning (after a hiatus of at least 5-years) businesses launching TV advertising campaigns last year, it is becoming clear that the benefits of TV for both new advertisers and established brands are becoming more apparent.

The swelling number of advertisers augurs well for the future of TV, but what about that pesky issue of ad avoidance? First, 67.5% of all TV viewed by UK individuals is still live, with 10.0% attributable to time-shifted viewing. Of those watching on playback, research from the Hub Entertainment Survey shows that 60% do so because of the convenience that comes with being able to watch their favourite shows in their own time, with just 37% citing the avoidance of TV adverts as their primary motivation.

And should a viewer skip your TV spot, Guerillascope does not charge a penny. We’re able to identify ad avoidance by the fact that an impact (view) is not counted unless said viewer has watched at least 10-seconds of it; if they fast-forward the schedule prior to this magic number, nothing is logged. Granted, not every TV advertising agency will apply this level of detail to minimising your costs, but we believe this is just one of the ways we can make the platform more effective for advertisers.