Why the future of advertising on TV is bright
Linear TV was once the dominant medium of choice within marketing, with mass reach delivering by far the best return on investment for Brands. However, a lot has changed with the rapid behavioural shift to social video, subscription video, and OnDemand TV luring more and more people away from traditional linear TV.
How advertising effectiveness on “Linear” TV is declining
In 2019 a report from marketing and media consultancy Ebiquity, they concluded that TV was fast approaching a tipping point after which the medium would likely lose its ROI advantage over other channels. The report projected that the shift in viewing behaviour would continue its rapid spread to older demographics. Here is a view of the changing behaviour of consumers TV viewership in the UK among 16-34 year-olds:
Ebiquity produced a second report early this year comparing the predictions from the 2019 study with the reality of the TV market throughout the last year. It showed that TV audiences had shrunk more quickly than they had predicted and the coverage gap compared to previous years had increased further. This data was so different from their initial prediction it led Ebiquity’s analysts to revise their predictions for 2022.
The data shows that the same ad shown in 2018 will impact 60% fewer teenagers, 50% fewer 18-24 Y.O and 1/3 fewer 35-44 Y.O by 2022. Added to decreasing reach, advertisers face the additional challenge of media price inflation. As audiences shrink, it becomes more expensive to reach the same audience.
TVNZ’s Forecast Series recent data pulled from their daily TVNZ Market Tracker reinforces this trend in New Zealand. All People 16-24 are engaged with online formats for 64% of their video media time and for All People 25-34 it’s 53%. Linear TV increases for 25-34 Households with Children as we expect these households are watching more day time television than non-Parents. See TVNZ graph below.
Personalised Advertising via SmartTV / Connected TV’s Arrives In NZ
What both these reports and other media usage data are clearly showing is that linear TV is on its way out with every new SmartTV sold.
Utilising other mediums like CTV (Connected TV) is the clear way forward.
New Zealand is moving in the right direction towards maximising CTV exposure, with TVNZ & TV3 recently making it possible for ads to be placed dynamically into their live streams which opens up a new supply of video inventory and scales up 1:1 video targeting opportunities even further.
Indications on the future of TV suggest that before we know it, linear TV could be phased out all together.
Ebiquity 2019 report – TV at the tipping point.
Ebiquity 2020 report – Mind the Gap
TVNZ – Dynamic Ad Insertion
Similar in-house reads:
Fuel Agency – Media Consumption Trends in Local Government