Why Doesn’t TV Just Die Already?

June 29, 2011by hiebing2021

Why Doesn’t TV Just Die Already?

It’s fun to talk about new technologies and explore their new advertising opportunities. As marketers, we’re some of the earliest adopters of these technologies. So it’s easy for us to imagine a world where everybody gets to consume the media they want, when they want it, and on the platform they choose to receive it. After all, we were among the first to buy DVR’s, iPads and smartphones.

We know the media landscape is evolving and our clients are anxious to take advantage of it. We know that every year the mass aspect of mass marketing continues to dwindle, as TV ratings continue to decline, print circulations continue to drop, and banner response rates continue to dwindle. So why would anyone buy advertising on television anymore?

Well, we know that they are. The Broadcast TV Upfront marketplace just wrapped up taking in 4% more money this year than last. That is $9.2 billion that was spent across five networks for 75%-80% of their anticipated audience during the 2011-2012 broadcast season. Those networks received double-digit price (CPM) increases for the audience they had available to sell, with CBS commanding 14% increases. The cable networks got their share as well, selling another $9 billion, 12% more than last year for roughly half of their upcoming inventory. Television will be more than a $30 billion national industry next year, and that’s before local buys. Why is there such demand for TV advertising (nationally and locally), when there are so many other ways consumers are consuming video today? Mainly, because there just isn’t anything else around like television.

Video combines sight, sound and motion to emotionally engage us in ways that no other medium can, and television is still how U.S. consumers consume video. Nielsen just published its latest “Cross-Platform Report” for 1st Qtr., 2011, essentially with the same data that last year was called the “Three Screen Report”. Year-over-year, Americans again increased (by 22 minutes) the amount of time they spend watching television the old fashioned way. Despite all of the claims of cord cutting, 91% of Americans are still paying for television to be delivered to their home. On average, people (ages 2 plus) in the U.S. watch 35 hours and 37 minutes of television per week. They watch another 2 hours and 25 minutes of time shifted TV through DVR’s (skipping about half of the commercials). While they are using the Internet on a computer for about 5 hours and 43 minutes per week, they are still only consuming about 33 minutes of streaming video this way, and about 7 minutes of video on mobile devices. Now, these are broad population averages, and small pockets of consumers are spending significant time watching video on these new technologies, but even those lightest TV viewing groups are exposed to some television advertising. In aggregate, television is still the best place to deliver your video (TV) commercials.

Moreover, TV is easy to buy, and we know what we are getting for our clients money. We can buy it nationally on broadcast or cable networks. We can buy it locally through stations or cable interconnects.

Buying streaming video ads is a little murkier. National buys are possible on Hulu or the major network websites, but Hulu is not well structured for specific spot market buys. Beyond Hulu, there are several different online ad networks that can sell streaming video impressions, across a wide range of “content partners”, as long as I am not too specific on what kind of content I want to be associated (or not associated) with. They can “geo-target” your geography, but they cannot guarantee that they can deliver the number of impressions you buy for each market in those markets; they just don’t have the inventory to do that yet.

We continue to monitor these opportunities, and they’ll be interesting to buy, someday. Sooner or later we’ll have to wade into these murky waters, particularly as we want to reach the younger age cells in urban markets that are more rapidly adopting their viewing behavior to these new technologies. But these new opportunities are still very niche and while television remains so ubiquitous, their growth will come slower than you might expect. Television will continue to survive for quite awhile yet and smart marketers will continue to leverage its unique reach potential.

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