2016’s Lessons: TV is as Strong as Ever

With the new year we thought it useful to look back at advertising lessons learned during 2016.

A Rosy Forecast for TV. You’ve probably seen plenty of summary articles. So let’s start with something unique – what we can learn from the effectiveness of Atomic’s campaigns at driving sales impact. After all, we do a bit of a rare thing for advertising – we evaluate our work for it’s ability to drive sales at the store.

Crunching the numbers, we found something that many might find surprising: Looking at store sales, our 2016 campaigns delivered as much impact per dollar spent on TV advertising as they ever have.

Let me repeat that: TV was as effective as ever in 2016.

This might come as a surprise to those confronted by all the hype about new digital baubles. But 2016 was also a year for re-setting things based on marketing truth. Some key examples:

  • Few “innovations” around advertising turn out to live up to the hype. For example, remember the headlines about streaming the Olympics? Well, it confused “stream” with “average viewers per minute”. Once adjusted to compare with traditional TV, it turns out the streaming numbers were not very significant. Here is an article by Mark Ritson working through the numbers.
  • Bob Hoffman (the AdContrarian) has played a pivotal role digging into the fraud that plagues digital advertising. It’s at incredible levels for ALL types of digital work, including digital video. Here are a couple of good links about online ad fraud AND about video fraud.
  • Mark Ritson is a marketing professor from Australia who has done some excellent work on digital claims. Let me highly recommend this video suggesting digital video is a ‘tsunami of horsesh*t’ . Ritson sees digital as just another part of marketing and we should get back to making smart marketing choices. (He is also highly entertaining.)
  • The Millennial Myth has been debunked. Here’s a great discussion of debunking by Shann Biglione of Publicis in China.
  • The Double Jeopardy challenge for brands has become prominent again based on Byron Sharp’s book “How Brands Grow”. This challenge was first postulated in the 1960’s. It says, generally, that brands grow fastest by growing their customer base of light buyers rather than chasing the most loyal. This reminds us why TV is such a powerful growth medium – because it reaches this wide base.

Low Cost of Entry for Digital ALSO Pairs with High Net Cost Along with the truth that TV is as strong as ever, it’s getting clearer that impact of various digital options is over-blown. Truth is:

  • Digital doesn’t deliver more for less.
  • It is popular for the cheap (low risk) cost of entry.
  • But that also means digital tends to deliver less impact at a higher cost.

For just one look at this, Coke CMO Marcos de Quintos reports in AdAge that Coca-Cola’s data showed its investment “returning $2.13 for every dollar spent on TV, compared with $1.26 for digital.”

What about the future? All indications are that TV will remain equally powerful for the forseeable future.

That said, what we mean by the term “TV” is shifting. Today, when someone refers to TV, they may mean one, or all, of the following:

  • Traditional linear TV: live watching via cable or satellite.
  • Time shifted linear TV: TV recorded on a DVR for later viewing.
  • Streaming cable feed: Watching a streamed feed (with ads) on a mobile device.
  • OTT (or one of an entire alphabet of other streamed services): Watching via a device like AppleTV or Roku.
  • Streaming TV Shows: This might be Hulu, or many other networks that put their programming up for viewing (CBS, NBC etc.).
  • Programmatic TV: Sometimes, a fancy version of online video. At other times, it’s a way to sell local cable inserts at rates higher than DRTV.

From visiting with colleagues throughout the TV business, traditional linear, and time shifted TV continue to dominate – by 90% or more. And that’s where ad dollars are best used.

Will the TV world change more dramatically? Maybe. But based on experience in other traditional mediums, the new innovations will end up with solid, but minor, market shares. (Ebooks have stabilized at around 25% of book sales for example.)

And all this means that 2017 should be another banner year for companies who rely on TV to drive demand for innovative products.

Copyright 2017 – Doug Garnett – All Rights Reserved.

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