The Golden Age of TV Advertising?

It’s folly to dispute the fact that technological innovations and changes in societal behaviour have created new avenues and opportunities for media engagement. What can be argued, however, is the extent to which this has impacted on the effectiveness of TV advertising.

Business as Usual

According to research from Thinkbox, the average UK individual is now watching 1-minute less TV than in 2004, demonstrating how viewing has remained consistent. Of the 4 hours 20 minutes of audio-visual content the average UK adult (16+) views per day, 67.1% of this remains live TV, with just 8% attributable to online audio-visual content from YouTube and other platforms, 4.5% to downloaded or streamed content, and 3.8% for TV or film on DVD and Blu-Ray.

Online VOD content and Playback TV accounts for just 16.1% of daily viewing, with the average adult still watching 45 TV ads a day, again indicating a decade-long consistency that dispels the hysteria around ad avoidance.

The rise of subscription streaming services – most notably Netflix – has been positioned as a key catalyst in TV’s demise, yet the fact is, according to Ofcom’s annual Communications Market Report, only 16% of UK homes have a subscription. With Amazon Prime and Now TV included, this figure rises to 22%.

The Age of Online Viewing?

It is important to note that the decline in traditional TV viewing can be more keenly felt in certain age-groups. Adults aged 16-34, for example, are now watching 59 minutes less TV a day compared to a decade ago, with a greater penchant for online streaming and short video content evident. When trying to engage such groups, we strongly advocate the implementation of integrated strategies that synergise traditional TV with complementary online marketing content as a means of achieving incremental reach.

Yet conversely, the average minutes of viewing per UK adult aged 45-54, 55-64 and 65+ have increased by 4 minutes, 30 minutes and 35 minutes respectively. In total, 92.4% of the UK population is reached by TV every week – compared to 92.2% in 2006, whilst 37% of adults cite their TV as the media device they would miss the most – more than any other, including mobile phones and laptops.

Adding to the Arsenal – Not Subtracting from it.

Various agencies and online publishers have called on advertisers to reallocate sizeable portions of their TV budgets to online platforms if they’re serious about reaching demographics such as 16-24s and 25-34s. Whilst we understand their motives, we do not agree.

Our view – and that of the television industry – is that the likes of YouTube should be a supplementary source of incremental reach when engaging said age groups, not a substitute for traditional TV. Reducing investment in television only nullifies the key penetrative force behind online response; despite TV viewing being far lower among 16-24s and 25-34s, let’s not forget that it still accounts for 50% and 61% of each age group’s daily audio-visual content.

Why Fix What's Becoming More Effective?

Research from Mediacom illustrates how a third of all ad-driven sales derive from TV advertising. Additionally, Thinkbox asserts that, for every £1 million spent on TV, £4.5 million is accrued in sales. With the likes of QR codes, apps and other technologies like Shazam shortening the journey from TV to website even further, the future shimmers with promise for TV advertisers.

Additionally, the assumption that a new approach is needed ignores the targeting advancements in the traditional TV advertising market, with advertisers now able to reach audience groups at an unprecedented level of accuracy, specificity and cost-efficiency.

Many forecasts of TV’s demise and online’s rise also fail to mention the increasing prevalence of ad blocking technology, the mismanagement of targeting, the protection of data, the lack of focus on creative quality, unrefined measuring standards, and the fact that, according to new research from Meetrics, only 52% of online ads served in the UK are ever seen, some way behind the likes of the US, France and Germany.

We’re not belligerently against online advertising; quite to the contrary, with one eye permanently fixed on enhancing the reach and precision of our targeted strategies, we see it as a valuable tool for certain brands when pursuing incremental reach within certain audiences. Yet it is at its most effective as an integrated supplement to total media packages.

The Commission Incentive

It is perfectly logical that digital agencies will seek to promote the benefits of this developing ad platform. However, with a greater number of media agencies – which generally cater for TV, online, print and outdoor – also attempting to shift the focus to TV’s supposed fall from grace and digital’s triumphant rise, the influence of commission and fee-based structures cannot be ignored.

The TV advertising market is based on a regulated, standardised commission structure. Conversely, no such frameworks currently exist within the digital sphere, meaning agencies theoretically have the freedom to practice arbitrage. You don’t have to be an expert to see how such agencies are incentivised to push the merits of one channel ahead of the other.

Amid growing concern over the lack of clarity rife in the digital sphere, it is clear that a stronger framework is required.

Conclusion

The key finding from 2015 is that TV remains in rude health. With a record Q1 YOY growth of 11.5% already under its belt, the UK TV market is predicted to rise by 8.4% this year, with 2016 also set to be a huge year in terms of televised sporting events and new programming commissions. Though mobile usage is also poised to rise considerably, the dual-screen trend of ‘media meshing’ is expected to grow with it. Ultimately, TV’s connectivity with other media channels continues to grow stronger, which can only be of benefit to advertisers.