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The Quandary in TV’s Advertising Evolution

The Quandary in TV’s Advertising Evolution

“There are two kinds of fools. One says ‘This is old, therefore it is good’; the other says ‘This is new, therefore it is better.’” Dean Inge

Nowhere in business is it harder to walk Dean Inge’s fine line than with TV. So here’s a quick snapshot on where TV stands in all its forms: old and new.

Traditional TV and DRTV. In today’s market, standard TV advertising continues to be the most effective – and cost effective — means for making big things happen in omnichannel markets. And while there has been some erosion in TV viewers, the majority lost are not TV’s core audience. Most cord cutters are young and have struggled to afford basic cable or, if older, are those who watched the least TV.

What about new advertising options? New video advertising media and formats are abundant, but  how do each perform?

  • Online Video. Online video isn’t a game changer because even after making the video you are faced with the challenge of getting viewers to see it. And that takes advertising, viral campaigns, or something else. So while online video can deliver CPOs, it won’t drive national results at retail.
  • YouTube: YouTube pre-roll ads are a staple for many DRTV companies. They deliver decent CPOs but anyone using them needs to be prepared for low conversion numbers.
  • Social Media Video Ads: Social media doesn’t offer lots of options. Google and Facebook get roughly 75% of online dollars and account for ALL recent online spending growth. Still, DRTV marketers have been able to deliver some decent CPOs on Facebook.
  • Online Video Display Ads: With careful ad placement, video display ads can deliver good CPOs within smaller budgets. Unfortunately, online advertising formats change constantly in a fight for consumer attention and against ad blockers.
  • Programmatic TV: I’m quite skeptical about programmatic. The implication is that you can “address” individual consumers at their TV sets. Except you can’t. TV sets, when addressable at all, are only addressable by household. That has left programmatic TV, for the moment, selling discounted TV time – with less negotiating options and at higher rates than DRTV.
  • Streaming TV w/ Pre- or Mid-Roll Ads: Streaming online or through set-top boxes has replaced some traditional TV viewing. Most streaming companies now offer pre-roll and mid-roll ads. This area is worth watching. But we also need to push for more realistic rates since streaming has yet to deliver CPO power for DRTV.

The Challenge: Dean Inge puts in perspective what I’ve observed for some time: DRTV is changing and will change more than traditional DRTV marketers would like. But new forms of TV aren’t as effective as promised and standard DRTV won’t go away.

In part, these new forms of TV face serious challenges:

  • Apart from online video, they work best with short ads. Yet DRTV’s strength has been those longer formats that are critical for new, innovative products.
  • DRTV reaches out and creates your next generations of buyer. But the new forms rely on targeting that loses your broader audience.
  • While each new format delivers results, none are effective enough to be the basis of a large omnichannel campaign.
  • At present, the new TV formats often make more profit for agencies than for clients. So clients need to be wary about promises that seem too good to be true.

This post previously appeared in the DRMA Voice Newsletter, March 2017 edition.

Copyright 2017 – Doug Garnett – All Rights Reserved

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