If you’re thinking about where to allocate your marketing budget when it comes to TV and digital ads, then it’s time to look to the future. A winner is emerging, but it’s the ad model itself that’s seeing the most important changes.
Where Do We Consume?
This is the big question, isn’t it? Where do people actually experience content, through digital offerings or television? Ad spend tends to follow building trends, but for concrete results, we need to know where the people are. The sticking point, of course, is that “we” and “the people” have many different consumption habits based on location, age, income, profession and more.
So when making your ad spend decisions, spend at least a little time defining your target audience and perhaps drawing up some customer personas to use. For example, younger consumers tend to focus primarily on digital channels with relatively little interest in TV at all. Older customers are usually the opposite. Those in-between can vary and are typically loyal to both certain types of TV content as well as trusted online channels.
The Turning Point: Digital is the Inevitable Winner
Let’s follow the money: Which is currently bigger, digital or TV? Based on the most recent research, digital is finally triumphing over TV ad funding in a clear, unavoidable fashion. Reports by Magna Global show not only that TV ad sales are particularly weak in the United States, but that digital ad spending has edged ahead of TV for the first time.
The reason that budgets show such a significant shift isn’t that hard to parse. Mobile buyers have become so common that they are taking over consumption models and diverging with 72 percent of digital ad spending set to be on mobile by 2019 — and it’s worth noting that 90 percent of a consumer’s mobile time is spent in apps. After all, it’s easy to use a mobile device while watching TV, so why spend money on both marketing channels when only one will ultimately reach the consumer?
Marketers are still getting more bang for their buck with digital content as opposed to TV commercial prices, and have a lot more choices. For an average popular TV show, a brand may get one 30-second commercial bit. That commercial will probably be ignored or skipped over, especially by younger audiences. With digital advertising, that same brand can compose multiple tweets, comments, tie-ins, videos, and reviews about that TV show, link them to the excitement of a new episode, and have them available for weeks to an ongoing audience. It’s easy to see why digital ad spending has gained so much favor, and why this year or next, TV advertising will have to rethink how it works and who it’s reaching.
Being ultra-targeted in your approach to channel selection will be how more business gets done. So if you want to see which channels top brands allocate their media budgets to, request a Winmo trial.
Looking to the Future
Think of the digital vs. TV question as a short term issue: eventually, it won’t matter anymore. The convergence of digital and TV has already begun – we’re seeing it in the exclusive content produced by Netflix, Hulu, Amazon, and others. We’re also seeing it in YouTube video channels, social media videos, live TV streaming through Vue or SlingTV, and much more. Soon there won’t be a difference worth measuring between TV ad spend and digital ad spend. We’re already seeing shorter and more social media-friendly ads on network TV apps, and everything from pop-ads to product placement is seeing plenty of experimentation.
This is just the start. The traditional commercial is dying out, and the new ad models that replace will be used on both digital and TV channels – if you can tell the two apart by then.
Some of the above information has been updated since the writing of this article. The exclusive content mentioned above has evolved as predicted. Netflix and Amazon together now spend more than $10 billion a year on content with the depth of content to continue to explode in the coming years. Sixty-one percent of young adults across the nation claim the primary way they watch TV is through streaming services like Netflix and HBO Go. According to sourceknowledge, by the year 2021 TV ad spend will make up less than a third of all marketing budgets. Digital, however, will account for more than half the budgets. TV ad spend is on the decline, and reported a fall of 7.8 percent to $61.8 billion last year, the steepest drop outside of a recession in the last 20 years according to sources.
As always, in order to stay updated on industry shifts and gain the ability to reach key decision makers, request a Winmo trial today.