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Performance Advertisers, TV Isn’t Dead Just Yet
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For years, experts have been predicting the death of TV advertising and blaming it on the rise of digital. In fact, sometime this year, digital ad spend is expected to surpass television for the first time, accounting for 38.4% of total media ad spending in the US compared to TV’s 35.8%. eMarketer anticipates that TV ad spend will continue to grow by just about 2% every year, while digital will grow by more than 15%. Naturally, mobile counts for a huge chunk of that growth.

If advertisers made decisions solely based on market trends, it’d make sense to drop the deadweight of TV and allocate their entire advertising budgets to digital. But just because TV ad spend is slowing down, doesn’t mean the channel should be ignored. The year-over-year figures for TV, and the Super Bowl especially, are staggering. The trouble today is that many marketers place too much faith in digital, missing the power of TV and the whole reason why commercials exploded in the first place.

Take the Super Bowl, for example. Why do companies like Wix.com and Supercell -- typically performance advertisers looking to boost user acquisition on digital -- bother paying $5M for a 30 second spot? (Now Top Games is in the running, too.)


Because the goal is scale. There is no audience segmentation, no hyper-targeting based on location and behavior, just pure unfiltered eyeballs. In other words, there’s opportunity to
create new users who might not have otherwise come in contact with your brand, rather than simply convert the same users who have seen your ads on their Facebook feed over and over again.

The case for the Super Bowl

If advertisers use regular television distribution -- not addressable TV technology that makes television segmentation possible, they have an opportunity to get their product in front of all sorts of demographics, not just the handful of smartphone users who algorithms promise are high-converting. By prioritizing scale instead of quality, brand advertising on TV lets marketers unlock user bases they might not have access to.

Last year, the Super Bowl audience was the third largest in history, averaging 111.9 million TV viewers and 1.4 million additional viewers per minute streaming it on CBS.

That’s 100 million conversations (or more - word of mouth is powerful) about strange, funny, heartbreaking, or even plain horrible advertisements. TV has the power to propel brand messaging into pop culture. Always’ #LikeAGirl Super Bowl ad in 2015 is a classic example. Typically, an Always ad on digital would be targeted towards women of a certain age. But the Super Bowl ad was wildly successful across various segments of society. Adobe said the ad scored the most social buzz during that year’s Super Bowl.


On a similar note,
Skittles told Bloomberg this year, “our goal is to be one of the most talked about ads during the Super Bowl. The most eyeballs are on during that game.” Clearly, conversation is becoming the go-to KPI for television advertising.

This is because, in contrast to performance advertisements, which might be so targeted that two friends might not even see the same ones, TV commercials are all-encompassing and encourage dialogue among a large group of people.

Half the puzzle

Digital, on the other hand, is designed for just the opposite. Today, while scale is an important KPI for performance advertisers who chase installs and new users, the need for quality -- or users who will continuously engage and eventually pay out -- often takes precedence. This is why performance advertisers run campaigns with measurement in mind, using metrics like LTV to calculate, evaluate, and track their campaigns, because doing so guarantees better ROI.

The catch is, when done properly, this practice can be extremely limiting. By advertising to a defined set of users, whether it’s users on a specific medium like mobile or desktop, or simply users who like casual games, performance advertisers inevitably constrict their user acquisition pool.

P&G, for example, the biggest advertising spender in the world, scaled back on targeted Facebook campaigns in August 2016 after finding it had “limited effectiveness.” P&G’s CMO told the Wall Street Journal, “we targeted too much, and we went too narrow." But the household goods giant didn’t cut their Facebook spend, they just optimized it - using the benefits of digital to enable growth rather than hinder it.

After all, digital is not only more precise, but can also have a more immediate effect and is often more affordable than TV. Just about anyone has the money to fund a digital ad campaign. Adweek found that for 1 Super Bowl ad (which goes for about $5M nowadays), you can buy 370 million display video impressions or 800 million impressions from banner ads. In comparison to TV, digital gives marketers affordable scale.

In addition, digital lets marketers measure - an important part of the ad spend process. It’s much more difficult to measure ROI and other important KPIs on TV than it is on digital. With digital, marketers know in real-time how well their campaigns are performing, letting them optimize on the fly.

What is multi-platform advertising?

The best practice then is to combine TV and performance advertising. This way, advertisers get both high scale and word of mouth, and targeted campaigns that drive home the message to relevant users. This is what's called multi-platform advertising.

Last May, an Accenture study commissioned by ABC found that without multi-platform TV advertising (linear television and long-form online video content together), standalone digital ROI declines by 18%. They dubbed it a “halo effect,” attributing the increased ROI on search, display and short-form video advertising to multi-platform TV’s long-term benefits on driving incremental sales.

Accenture said “most marketers look at an average ROI in the short term … But there is this lasting impression that happens beyond year one that currently most marketers don’t give credit to.” Specifically, the combined impact of the second and third year after the television campaign is 1.3 times the impact of the first year.

By combining both TV and digital advertising, marketers can leverage the best of both worlds -- the scale and long-term “halo effect” of standalone television, and the increased targeting and measurability of performance. Going forward, with more performance advertisers like Supercell and Top Games getting into the Super Bowl, we can expect more marketers to understand the benefits of a multi-platform approach to advertising and follow suit.

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