Sales and Marketing

Where is Television Going?

The secret to advertising success used to be simple. All you needed was a creative idea, a clever tagline and a big enough budget for a TV ad.

Marketers & Clients Rethink Their Approach

By Justin Braun

The secret to advertising success used to be simple. All you needed was a creative idea, a clever tagline and a big enough budget for a TV ad. But even tech-challenged businesses know those days are a distant memory. The digital revolution and ubiquity of the Internet has forever changed the nature of communication and, in turn, the global marketplace as a whole.

More and more, consumers are able to control how and where they get their entertainment and information, leaving some businesses scrambling to keep up. In response, companies faced with shrinking budgets and increased competition are turning to the still-new frontier of digital marketing.

“Clients who come to us for marketing solutions don’t even mention traditional TV anymore,” said Kim Isemann, executive vice president of TWsquared, a boutique PR, marketing, creative and business development firm. “It’s too expensive and difficult to track and even harder to target.”

 

Digital Devouring Live TV

Ever since the VCR was rolled out in the 1970s, each next big technological advancement has spelled the death of its predecessor. Thanks to a phenomena known as Moore’s Law, which observes a doubling in computing power every two years, the pace of technological advancement isn’t slowing down anytime soon.

Every new iteration of communication and entertainment platforms and systems has created new opportunities for consumers to discover content and an even more fragmented market for businesses. It started with the early web and AOL, which was followed by Yahoo! and Google. Then came the time-shifting, with DVR, HD DVD and Blue-Ray. Next, new mediums including satellite radio and next-gen game consoles offered consumers even greater nontraditional entertainment options. Now with Facebook, YouTube, Netflix, Hulu, Apple TV and Amazon Prime Instant Video, anyone can access any content at any time without the need for cable service or even a TV.

“Never before has the viewer had more control and more skill at navigating this evolving ecosystem of devices and platforms for content discovery,” wrote Nielsen SVP Insights’ Dounia Turrill, in her Total Audience Report published December 3, 2014. “Declines in traditional TV viewing have us all searching for the audience.”

Nielsen’s Total Audience Report indicates that Americans aged 18 to 24 watch four hours less of live TV per week than they did last year. Over the last three years, Q3 TV viewing by 18 to 24-year-olds has dropped by almost six-and-a-half hours a week, or 27 percent. For the same time period, the demographic’s digital video viewership (Netflix, Hulu, Amazon Prime, etc.) experienced a 54 percent increase. But these trends don’t just apply to Millennials; live TV viewership declined for all surveyed age groups (except the 65-plus demographic) while digital video consumption increased by 55 percent.

Overall, the report finds consumers are still watching some TV but are spending an increasing amount of time watching digital video on their personal devices. It’s this shift that has turned broadcast advertising on its head.

“More and more, clients are coming to us for advice on how to find their audience again,” said Neil Romaine, strategic marketing director of the Watuaga Group, an Orlando media buying agency with whom TWsquared works closely. “Digital is king and if you’re not using it, you’re missing out on important ways to reach your customers.”

 

Digital Refines Reach, Requires Investment

Romaine says it’s neither the low cost of digital nor the high cost of traditional broadcast advertising that’s driving the change—businesses who use online video content to market to customers find the production costs are relatively similar for traditional and digital broadcasting. What’s driving the change is digital marketing’s ability to reach consumers with greater precision.

“Advertising on traditional broadcast media restricts your target audience to within the demographics of the program or publication,” Romaine said. “Plus, the consumer’s response to a call to action is not immediate.”

With digital advertising, on the other hand, a customer can take that action immediately. For example, an auto dealership can use the direct response model of a digital ad to prompt a prospective customer to make an online reservation to test-drive a vehicle. For clients putting on events or shows, the call to action is to purchase a ticket. “These clients want to save their customers a step in the sales process,” he says.

Using digital, Romaine can reach a specific audience with targeted messages. This is what many of his clients desire. Marketers are increasingly being held to trackable standards. Digital tactics allow them to do a better job of tracking where their money is being spent and how effective it is. “Our clients are looking for less branding and more tactical results,” Romaine said “They’re looking for a specific and immediate action from the audience or customer.”

These tactics are already becoming mainstream. According to a study by ThinkVine, which surveyed 200 senior-level marketers, most believe their digital marketing expenditures will soon exceed their traditional media spending. Responding to growth in the sector, Romaine continues to refine the media packages he presents to clients. “A lot of times we’ll talk our clients out of the more traditional online content like video ads on HULU or Netflix,” he said. “The Internet is so massive that clients don’t have to utilize the big players like that to capture customers. We’re driving them toward reaching the right person no matter what site they’re on.”

The biggest benefit for companies investing in digital marketing tactics is digital’s flexibility and depth of measurement. “Our clients are astounded by the detail of insights they receive from their digital marketing reports,” Isemann says. “Every interaction a consumer has with digital marketing assets are tracked. We’re able to go into the analytics to determine consumers’ locations, how they found the ad and what they did afterward. Based on consumer response to digital ads tracked in real time, we can change messaging, content, call to action and visuals, all with incredible speed.”

This inherent flexibility of digital is a game-changer. Completely different from traditional TV (and all other traditional forms of advertising, for that matter), which does not allow for edits or changes after ads are broadcast, digital lets marketers act on the insights gained from their measurements to adjust their tactics on the fly.

 


This article appears in the February 2015 issue of i4 Business.
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i4 Business

i4 Business

I4 Business magazine has become one of the most trusted voices for and about the Central Florida business community. Each month through our print and digital platforms, we provide access to meet, to learn from and to learn about some of the incredible entrepreneurs and business leaders, along with economic trends that are shaping our region.

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