Moving 15% of TV Dollars to Online Video Said Increasing Reach at Lower Cost

IABNielsen-TV-Online-Video-Budget-Reallocation-Feb2013A new study [pdf] by the Internet Advertising Bureau (IAB) and Nielsen, supported financially by Microsoft Advertising and Yahoo, argues that shifting ad budgets from TV to online video can enhance campaign reach at lower cost. The study examined 18 real TV schedules across key advertiser verticals, finding that a 15% reallocation of TV-only budgets resulted in a 4.2% increase in reach at an 11% lower CPM. But while that 15% reallocation figure might seem innocuous enough, if every TV advertiser immediately followed suit, the online video ad market would instantly grow sevenfold.

That calculation is based on full-year 2011 figures, the latest full-year figures available for both markets. Online video advertising has probably grown faster than TV advertising since then, but the $69.5 billion in US TV advertising (data provided to MarketingCharts by Kantar Media) in 2011 dwarfed the $1.5 billion in digital video advertising (according to the IAB), so it’s unlikely that online video’s growth rate would alter the picture much.

Meanwhile, the study also finds that shifting TV ad budgets to online video also made campaign reach more effective, with that duplicated reach generating a lift in general recall (+15%), brand recall (+33%), message recall (+45%), and likability (+40%). One wonders if the researchers would find similar results if they compared duplicate viewing on just a single source – it’s not a flight of fancy to imagine that viewers exposed to the same ad repetitively would have higher ad recall (although increased likability might not ensue.)

Nevertheless, the study indicates that the sequence of viewing matters, with ads viewed online first and then on TV being most effective. And while a skeptic might point to this study being released shortly after Nielsen announced its decision to include online video viewing in its TV ratings system (as discussed here), Nielsen has been arguing for the TV plus online video combinationsinceĀ at least 2010.

About the Data: For the study, Nielsen conducted a comprehensive analysis of 2011-2012 census, and survey-level TV and online data deployed from the following Nielsen solutions: Nielsen Cross-Platform Homes panel, a single-source opt-in panel measuring TV and online behavior; Nielsen VideoCensus/Video Analytics census data; Nielsen TV/Internet Fusion Data; Nielsen Brand Effect surveys measuring resonance of TV and digital ads.