Sep 24, 2018
TV or not TV… that is the question
by Mike Benns - Managing Director
There is no doubt the quality of TV dramas has increased massively in recent years... the production values introduced by the likes of Netflix, Amazon and Google has forced traditional networks to rethink their budgets and up their game.
The BBC in particular, has scored two brilliant goals in recent weeks with Killing Eve and Bodyguard doing particularly well in the ratings. Whilst this is great news for viewers, it is not good for marketers trying to reach a mass audience through advertising. To emphasise this point, Vanity Fair, on ITV at the same time as Bodyguard, has delivered extremely disappointing viewing figures.
Of course, it’s not just the sort of TV that’s affecting reach to a particular audience, it’s the way that this content is being consumed. Online and ad free subscription services are killing traditional network TV… or at least forcing them to rethink. Killing Eve, for example, was released as a box set on BBC’s iPlayer platform as soon as the first episode was aired.
By the way, lovely piece of media buying by the BBC taking over Vauxhall tube station, the closest to MI6’s HQ, for the launch of Killing Eve.
I’m always a big believer in looking Stateside when it comes to spotting media trends. Particularly with this week’s news of Comcast being successful in the takeover of Sky, so I was interested to see that every May, for one week, TV networks invite advertisers to New York City for an annual bonanza of presentations and parties, that are meant to dazzle marketers and loosen their purse strings.
During the days, new shows and top talent are pitched followed by lavish evening affairs where marketers can eat lobster rolls and grab selfies with network stars. The event kicks off weeks of negotiations, with networks aiming to get advertisers to commit to billions of dollars in spending for the year ahead.
But beneath all of this, the networks are also navigating a serious advertising upheaval. Ratings are on the decline, especially among young people, some of whom don’t even own a TV. It’s hard to keep up with the many devices and apps people now use to watch. Plus, as mentioned, there is a host of material from the tech companies competing for viewers’ attention, including Google’s YouTube, Facebook and Netflix. It all adds up to a tricky situation for broadcast TV.
Advertising on TV has long been the best way for marketers to reach a large number of people at one time. And it is still a formidable medium. But cracks are beginning to show.
In the US, national TV ad sales peaked in 2016, when they exceeded $43 billion, according to data from Magna, the ad-buying and media intelligence arm of IPG Mediabrands. Sales fell 2.2 percent 2017, and the firm estimates that they will fall at least 2 percent each year through to 2022.
TV is still a good value for plenty of advertisers. Pharmaceuticals and personal care products are increasing their presences on TV. But the combination of rising prices and falling viewership is giving some brands pause for thought.
The hottest shows on TV networks — which command the highest ad prices — are attracting older viewers, which is a challenge for brands that want to reach millennials and teens. For instance, 2018’s top-rated show in the US, the revival of “Roseanne,” has a median viewer age of 52.9 years.
A Generational Gap in How Americans Consume Content
Here’s how many hours per week younger and older Americans are spending on different platforms.
Live TV includes playbacks within seven days. TV-connected streaming devices includes viewing through Roku, Apple TV, smartphones and computers.Game consoles includes time spent playing and watching content. Smartphone video viewing is specific to video-centric sites and apps like Netflix. By The New York Times | Source: Nielsen Total Audience Report, Q2 2017
Google’s YouTube, on the other hand, is popular with much younger viewers and the brands are so eager to reach those viewers that they have been willing to continue advertising on YouTube despite some of the issues it has faced around ads appearing on videos containing offensive content.
Brands love digital advertising because it gives them the ability to target ads based on their own lists of customers and profiles like “first-time car buyers” or “people who like foreign travel.” And they want that kind of capability on TV, too. Indeed, four competing media companies in the US — NBCUniversal, Turner, Viacom and Fox — have worked to standardise the language and some of the data sets that they use, hoping to make it easier for brands to buy cross-platform advertising with them.
Those opting out of traditional TV packages are watching Netflix and videos on Amazon Prime. As networks navigate these changes, they are moving to reduce the number of ads they show. Ads, after all, make money, but they also annoy viewers. Last year, the average number of commercial minutes during an hour of broadcast TV was 13.6, according to Nielsen data.
Both NBCUniversal and the Fox Networks Group have said they will trim the total time of commercials shown during some of their shows; Fox has announced a goal of reducing ad time to two minutes an hour by 2020.
So if there are fewer commercials, how do companies market their products?
Ralph Heim, vice president of media and sponsorships at Sonic Drive-In, said he was intrigued by several of the new data targeting products for television ads. But he remains concerned about how the announcements on limited ads fit with a declining audience.
“They’re trying to create a more premium advertising experience for advertisers, and they’re hoping that people will pay more,” even though the audience is smaller, Mr. Heim said.
He added, “At the end of the day, you’re following the eyeballs, right?”
If you found this article interesting then please click here to subscribe to our monthly newsletter.