Digital Ad Agencies Sour on TV, Turn to Online Video

RocketFuel-Digital-Agencies-TV-and-Online-Video-Perceptions-July2013Digital ad agencies believe that the effectiveness of TV advertising is on the decline, and are making a move to online video, according to a survey conducted by Rocket Fuel among 149 digital agency professionals, the majority of whom directly authorize media spend. 8 in 10 respondents plan to spend more on online video this year, even as 60% recognize there are serious barriers to shifting money from TV to do so. Chief among those barriers? Building reach (58%) and prior budget commitments (56%).

Other challenges cited by those who agree that there are serious barriers to shifting TV funds into digital video include: agency coordination (31%); converting video assets to online ads (30%); and brand safety (23%).

Nevertheless, 42% of respondents claim to be moving from TV to online video this year as part of the planning process, echoing similar reports from recent research.

It’s not hard to see why when looking at how these agencies perceive TV advertising’s effectiveness. According to Rocket Fuel’s study, 7 in 10 believe (top-2 box score on a 5-point scale of agreement) that consumers avoid TV commercials much more than they did 5 years ago, and just 17% feel that TV advertising is just as effective as it was 10 years ago. In fact, just 12% feel that advertising on TV is more effective than advertising with digital video. That appears to be a far bolder assessment than offered by other agencies.

The respondent sample may have something to do with these results, of course: it’s not that surprising that digital agency professionals want to focus on digital channels. And indeed, among the 40% of respondents who either make media recommendations for or purchase TV ads on behalf of their clients (i.e. actually have experience with TV), the perceptions were a little less negative. (For example, 27% believe that TV advertising is as effective as 10 years ago, compared to 17% of respondents overall.) Still, as the researchers point out, even these respondents generally do not hold a bullish outlook on TV advertising today, despite signs that spending on TV is alive and well, and that it continues to be a highly influential medium.

Other Findings:

  • 69% of the Rocket Fuel respondents indicate that their brand/client wants to engage in more online video advertising.
  • 57% agree that their brand/client wants to look at TV and online video as part of a single holistic campaign strategy.
  • 61% are considering a programmatic buying solution.
  • Only 1 in 10 believe that if their commercial is viewed on TV, it works just as hard as it did 10 years ago.
  • Building reach is the greatest barrier to online video, according to 79% of those who buy TV.

About the Data: The survey was fielded nationwide during the first 2 weeks of 2013. Respondents were evenly distributed by gender and roughly distributed according to US census data for age, though with a younger skew (56% were aged 25-44).