For the past 75 years, TV advertising has been the undisputed champion of the ad industry. It has sight, sound, motion, scale and measurability—and it plays on a screen that is a permanent fixture in the middle of nearly every living room in the Western world.
Brands have long spent more on TV advertising than any other format. A lot more—$37 billion dollars more in 2015 alone. According to eMarketer, TV buys represented 37.7% of all ad spend in 2015, or approximately $69 billion.
But while TV ad spend has continued to increase incrementally year-over-year, campaigns exclusively using traditional planning methodologies have seen a decline in actual reach.
In 1980 being on three networks meant you could reach about 50% of the U.S. TV audience in any given part of the day. Now, according to Morgan Stanley, that number is closer to 15%.
Why are traditionally planned campaigns falling short on audience reach goals? Fragmentation. Fifteen years ago social networks such as Facebook, Twitter and LinkedIn didn't exist. In fact, the iPhone has just been around since 2007. It feels like a lifetime ago, but it has only been nine years.
The creation and explosive growth of these channels, formats and devices have changed the way audiences are consuming media, and television is at the center of that disruption. Therefore, we must reframe the way we think about TV as a medium and how we plan for it.
Despite diminishing returns, few would contest the significance of linear TV in the modern marketing mix—or the need to invest during the upfront. But brands must start thinking differently about how to use the magnum medium to its full potential. When you begin to analyze TV campaign performance using big data, it brings focus to questions such as: How much should you actually spend on TV? Which networks and channels make the most sense in the context of your brand's goals? And at what frequency should you optimize your campaigns?
Using cross-screen planning software, advertisers can analyze past TV campaign performance, investigate the impact of future TV dollars—including upfront buys—and shift spend across less obvious TV properties or alternative screens to smooth frequencies and gain back the incremental audience reach that has slowed over the past decade.
We recently ran a media plan via our cross-screen software against a traditionally planned buy with an investment of $10 million dollars. We found that the cross-screen planning software outperformed the siloed TV and digital plans both in terms of CPM efficiency and total unique audience reached across six different demos. Among some of the audiences evaluated in the research, the CPMs for the traditional media plan were more than double those of the cross-screen plan.
As big data is increasingly used to inform ad spending, the industry will begin to see a shift in the way advertisers allocate budgets, especially as it relates to earmarking dollars for the TV upfronts. If, by using intuitive cross-screen software, we can make audience data more actionable and optimize plans by executing thousands of scenarios across hundreds of thousands of potential touch points in a matter of seconds, we can truly begin to focus on addressable audiences no matter the format, device, screen or channel.
About the Author
Taylor Schreiner is an online research veteran with over a decade of experience in online and offline marketing measurement. He came to TubeMogul after leading research efforts at Yahoo, Twitter and LinkedIn. His experience ranges from Big Data, to global qualitative research, to insights products, and spans the full breadth of online media as it has evolved from search and display to content marketing, programmatic, social and video.
In his current role, Taylor is focused on helping advertisers and agencies understand the full value of programmatic video in their media strategy.Taylor holds a BA from Amherst College and an MBA from UC Berkeley's Haas School of Business.
About the Sponsor
TubeMogul's advertising software enables the world's largest brands to streamline their global, cross-channel advertising from a single platform. By improving transparency and leveraging real-time data, our platform offers holistic planning tools, analytics and insights across television, video, display, mobile, social and other brand advertising and direct response initiatives. With flexible, customizable features and vendor agnostic integrations and API capabilities, TubeMogul's software powers the advertising layer in a complex marketing stack. To read TubeMogul's cross-screen white paper, click here.