THE OPTIMISTIC CASE FOR TELEVISION

February 3, 2016

WHY AD BUDGETS SHOULD RETURN TO TV A few weeks back (1/6) we ran a summary of the 2016 advertising forecast from veteran analyst Jack Myers (pictured) forecasting a strong 6.7% jump for Broadcast Network TV, 2.4% for Cable Networks, Spot Broadcast TV up 12.5% and Local/Regional Cable up 11.3%. Those are some pretty hefty numbers—and, while including related digital business for the TV companies, are based primarily on growth in the legacy TV business.

Business Insider also took note of Myers’ bullishness and quizzed him on why he is confident that this year will bring “the beginning of a longterm trend of marketers returning to legacy media.” That’s obviously a contrarian view to the widely held belief that all advertising is rapidly shifting to digital platforms.

Not surprisingly, Myers says it comes down to ROI—return on investment. He told Business Insider there is a growing body of evidence that the target audience, reach and awareness of ad campaigns has been on the decline for the past decade, which has negatively impacted ROI. From the point of view of the marketers, he says, “Their analyses point to the best solution being a reinvestment in television first, followed by out-of-home, radio and to a lesser extent print.”

We would chime in that consumer package goods (CPG) companies have been leading the charge to increasing digital advertising at the expense of television budgets, even though research available publicly indicates that digital is particularly poor in ROI performance for CPG. Sure, Mondelēz has had one digital hit for Oreos—which we would note was already a well-established brand—but there’s no indication that either Mondelēz or Procter & Gamble has yet found the “secret sauce” to make digitalonly campaigns work as well as linear TV.

Of course, Digital’s biggest selling point is targeting—and the resulting ability to count each and every exposure, usually with a fairly accurate demo attached to it. In a commentary on Media Village, which is part of Jack Myers’ M y e r s B i z N e t ,marketing consultant Steve Grubbs of Second Act Media laments the pitfalls of “efficiency first” buying strategies. Yes, the scientists using big data have instilled some much needed purchasing discipline, he says, but they have turned a blind eye to the failures of automation—“such as over-delivering frequency at the expense of reach.” Grubbs found hope in the decision by PepsiCo to disband its marketing procurement team and turn the responsibilities over to individual brand managers.

“Cost savings do not equal more impactful advertising,” Grubbs notes. Maybe the tide is shifting again, as Jack Myers suggests. The ultimate objective for marketers is to sell stuff—and TV still does that better than any of its competitors.

 

Source: CableSpots

 

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