Forget Ad Avoidance, Growth of Digital -- TV Holding Its Own

Medium is Still Most Effective Ad Vehicle, Study Finds

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Marketers who are siphoning dollars out of their TV budgets may need to reconsider that strategy, as a new study suggests that the good ol' idiot box is still the most effective advertising medium.

'How I Met Your Mother'
'How I Met Your Mother' Credit: CBS

According to new research by the marketing analytics firm MarketShare, TV remains the most efficient vehicle through which to drive consumer purchases, out-delivering digital media (display and social), print and radio. Automotive and telecom particularly favor TV; at similar spending levels, both categories enjoy a six-fold sales lift on TV versus online.

Commissioned by Turner Broadcasting and Horizon Media, the study gauged thousands of marketing optimizations by top advertisers over a five-year period (2010-14). That TV's effectiveness has held up during such a radical proliferation of digital media—when the study began, 50 million tweets were sent each day; that number has since metastasized to 500 million—should be of particular interest to marketers.

"When you stop and think about all the technology that emerged over that period of time, it's remarkable that TV hasn't suffered an erosion in its effectiveness," said Eric Blankfein, chief of Horizon's WHERE Group, who added that the study "busted the conventional wisdom about the relative efficiency of digital versus television."

Despite the seismic impact digital has had on everything from consumer behavior to media planning, TV's value proposition practically has gone unchanged. According to the MarketShare study, TV's effectiveness in driving sales dipped just 1.5% between 2012 and 2014, whereas online's lift suffered a 10.3% decline.

Obviously, as a TV programmer (its roster of ad-supported cable networks include TNT, TBS, Adult Swim, truTV, CNN and Cartoon Network), Turner has a vested interest in proving that TV is a better buy than anything else out there. But as Mr. Blankfein said, Horizon is, by its very nature, media agnostic.

"We don't have any skin in the game," he said. "It's not a matter of pushing more clients into TV. The media mix is dependent upon a number of factors, and a lot of our clients are heavy in digital…and that works for their particular needs.… This is all about gaining a better understanding of the role media plays in conversion."

As one might expect, TV didn't run the table on the categories under consideration. For example, a plan that incorporates radio, online and print will likely ring up more retailer cash registers than even the most judicious national TV campaign.

For marketers investing in TV, MarketShare advocates a shift away from sports. The study suggests that a more efficient plan would reduce the current allocation of TV dollars tied to high-CPM live sports by nearly a third. As with most TV-related issues, this is all about getting more bang for the buck.

"We would never question the value of sports, but we're always putting them into perspective for our clients," Mr. Blankfein said. "Sure, there's low ad skipping and delayed viewing, but at the same time you have to think about the limits of your creative assets. How often can you repeat a message over and over again before you plateau?"

And of course, even if 18 million people see your ad, is it worth the expense of, say, an NBA buy, if your product isn't likely to curry favor with a pro hoops audience? A half-million-dollar investment for 30 seconds in the Cavs-Warriors series may not be such a good call if you're trying to move HurryCanes or Poligrip.

"We've got to be smart about scale and trying to reach the right people in the right place," Mr. Blankfein said.

Speaking of smarter media, even the robots who handle automated buying aren't necessarily Mensa candidates. When MarketShare analyzed programmatic buys in online video, the priciest inventory generally delivered the lowest returns on investment. "If you look at the group where the ad dollars were high, the ROI was pretty low," Mr. Blankfein said. "It's sort of ironic, given that these video ad networks are supposed to provide a more targeted environment."

As much as linear TV deliveries are being eaten away at by online media, the study suggests that a radical reduction in TV spending can have a deleterious impact on ROI. Per MarketShare's modeling, a telecom brand that moves 20% of its TV dollars into online display can expect to see its sales drop 7%, largely as a result of its diminished reach.

The MarketShare study was devised as a means to highlight the efficiency of TV, which is forever being undermined as rivals tout the precision targeting capabilities inherent in digital. (Also not helping matters: digital is cheap enough for clients to feel like they're getting a real bargain.)

Howard Shimmel, Turner's chief research officer, characterizes the study as something of an educational tool. "As an industry we pay so much attention to average ratings and we don't talk about the effectiveness of the media enough," Mr. Shimmel said. Reach is important, but the opportunity to bring the consumer down the sales funnel is more important."