Although linear TV still accounts for the largest portion of traditional media spend, marketers are investing less in traditional TV than they once did as digital options proliferate. In fact, a recent report [download page] from Viant Technology reveals that 84% of the 500 US marketing decision-makers surveyed will be dedicating the same or a smaller portion of their budgets to linear TV advertising this year than last.
This is quite a change from just two years ago, when far fewer (57% of) respondents reported that linear TV’s share of their total budget would be the same or less than the year before. It’s possible that the coronavirus may have an impact, though: recent survey data from Advertiser Perceptions has found that linear TV is not only seeing new budget added but also has benefited from reallocation of budgets.
Here’s a look at other key points from Viant’s report:
Traditional TV Ads Declining in Effectiveness?
Part of this decrease or stagnation in linear TV advertising spend is likely due to the growing belief that linear TV ad spend is less effective than it once was. This most recent survey found that 6 in 10 respondents (59%) feel that linear TV ad spend is less effective than it was 5 years ago. When marketing decision-makers were asked the same question in 2018, only 41% believed that that linear TV advertising was less effective than 5 years earlier.
It’s worth noting that previous research from Nielsen has suggested that marketers may be holding traditional channels such as linear TV to a higher standard than digital channels even though they find it more of a challenge to measure the success of these channels with metrics such as ROI.
A majority of marketers surveyed are putting a priority on their digital advertising initiatives before they plan for their TV advertising. When respondents were asked if, from a media budget perspective, they plan their TV advertising before they plan their digital advertising, three-quarters (75%) answered in the negative while only 21% said they did.
This may be for good reason, especially considering that more consumers report subscribing to a subscription video service than to pay-TV. And the field is getting larger, with ad-supported streaming video services gaining steam. Although 7 in 10 (72%) OTT-capable households already spend time with Netflix, YouTube, Hulu and Amazon, new entrants like Disney + and Apple TV+ are making their way into households and posing even more of a threat to linear TV.
Viant found that these new entrants into the streaming scene will impact advertising plans for 2020 in various ways, such as by reducing spending on linear TV (18%), increasing investment in video overall (14%), increasing testing in CTV as an extension platform (14%), designating a specific budget for CTV (13%), increasing spending on CTV (11%), and investing in automatic content recognition (ACR) services (9%).
Programmatic Linear TV
While many TV advertisers say that linear TV advertising would be more effective if it had better targeting capabilities, this technology remains relatively nascent, and that is reflected in its adoption: 20% of decision-makers say they are making programmatic linear TV part of this year’s ad spend, although another 20% are expecting to use it in the future. Separately, while 40% are exploring using audience targeting data to enhance their TV exposure, about half (51%) will not do so.
And, although other data shows data-enabled and audience-based TV advertising, as a whole, was expected to increase this year, many advertisers are also hindered by concerns over data privacy.
Of course, measuring success is still a priority and marketers are looking at several metrics to determining the success of an omnichannel campaign, including omnichannel conversions (35%), brand metrics such as awareness and intent (31%), in-store sales (27%), in-store visits (22%) and customized success metrics (19%). Although using multiple metrics to measure success can be problematic, only about one-third (34%) agree that there should be a new single metric created to specifically measure omnichannel success.
The full report can be downloaded here.
About the Data: Findings are based on a survey of 500 marketing decision-makers at US companies, fielded in January 2020.