Blog: In defense of TV rates

Media Experts' Nathalie Dupont on the benefits of TV campaigns, and how the process has changed for buyers looking to negotiate deals.
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By: Nathalie Dupont

Since I started my career in television over a decade ago, one phrase keeps popping up year after year: “The Death of Television.”  As someone who took a leap of faith by switching careers to dive into what I thought was an evolving industry, just imagine my surprise the first time I heard that phrase.

What the (bleep) do you mean, “TV is dead?” Why have the audiences left? Where have they gone? Will they come back?

These were just a few of the questions swirling around my brain at the time. The answer came in the form of numbers, showing a steady decline in audiences as the TV landscape experienced rapid transformation.

It’s no secret that audiences are leaving television. Research shows YOY the decline in purchasable ratings. Between a fragmented television ecosystem, changes in how media is consumed and the onslaught of OTT and streaming services, it’s really no surprise that we are witnessing such a downturn.

As to whether these audiences will return or not, my guess is no. Audiences are now accustomed to watching TV where and when they want, and OTT is too strong a force for it to simply vanish because of its non-ad supported platform.

Yet if you actually look beyond the aforementioned proof points, you will see that TV is (surprisingly) still very much alive. And from my perspective it’s not just alive, it’s arguably healthy!

  • Highest number of weekly hours spent (25.2 hours per week for A18+): check!
  • Mass reach (93% weekly reach for A18+): check!
  • Brand safety (ahem, did someone say YouTube?): check!

Study after study shows that TV still yields the most significant investment for brands. The MAGNA Global Industry Report from August 2019 shows that the TV net advertising revenues across 34 countries was $144 billion in 2018. Personal Care, Auto, and Retail were the three largest contributors to television spending and represented nearly 30% of total TV spend.

In recent years, we’ve seen brands moving investment dollars out of television (digital being one of the biggest benefactors) only to come back to TV in the end. The lack of Brand Safety on other media channels has played an important role in the return to TV. A study by CHEQ/MAGNA/IPG Media Lab has outlined how unsafe ad placement can have detrimental effects on consumer brand perception, such as:

  • 2.8x decline in consumers willing to associate with the brand;
  • 2x decline in consumers intent to purchase;
  • 4.5x decline in feeling that the brand cares about them; and
  • 3x decline in consumers feeling like the brand is “in the know”

Television offers an extra layer of protection, due to the nature of the ad buying process and the way in which commercial networks select their content. When a human is directly handing the scheduling process (be it advertising or content) there is a higher level of brand safety.

Even digital companies, along with D2C businesses, are investing in the medium. Why? Plain and simple, because they see results. Overall, TV spend by Internet-related companies is up 30% between 2017 and 2018, with Facebook, Apple, Amazon, Netflix and Google having a combined spend of $71.5  million. These are all indicators of a healthy and very much alive platform.

The benefits gained from a successful television campaign are precisely why the impact of a declining audience is so noticeable. We are at the mercy of unforgiving market conditions, as advertisers look to purchase the best programming for their brand in the most efficient way. Inventory levels are decreasing but the demand is high, causing a seller’s market.

This means that broadcasters are in a great spot right now. With no fear of remnant inventory, they aren’t as hungry as they once were. Buyers looking to negotiate for additional discounts or added value face an excruciating process (one often met with shock that media agencies would dare ask for more).

But despite the broadcasters current cushy position, we shouldn’t forget that history has proven how bullish markets don’t last – and agencies have a very long memory of who came to the table during these times.

In the long run, these market conditions have helped us better ourselves as investors. We buy smarter, we demand better from the industry by calling out its inefficiencies with measurement and reporting (still waiting on my spring posts, on that note), and most of all, we look for emerging opportunities to leverage.

Take Connected TV platforms such as Roku, with ad placements that have the look and feel of traditional television combined with the ability to reach audiences before they move to subscription-based services. Investors are now learning how best to tap into streamers in order to replenish the inventory pool and not be held hostage to astronomical rate increases.

When you cut through the clutter, the bottom line is this: Investment in television is no doubt a sound one. The medium provides proven success with brand building and awareness. There’s a reason why it was, and remains to be, the number one trusted advertising channel.

Can it do better? Definitely!

There are areas that TV broadcasters need to work on for it to remain a vibrant and effective channel. At the same time, industry leaders and investors must push for greater accountability by demanding better measurement and not settling for the same excuses. Let’s give this medium the respect it deserves by working on its outdated infrastructures, utilizing new technology, and in turn, showcasing why television truly is the best bang for our client’s buck.

Nathalie Dupont is director of television systems at Media Experts

Source for hours spent and weekly reach: Numeris PPM, Total Canada.  All locations, Mo-Su 2a-2a Fall-Winter/Spring 2018-2019, Adults 18+.

Source for Global TV Spend: MAGNA Industry Report (August 2019)

Source for Internet related spend: Think TV (Numerator Canada, Internet related sites & services category)

Source for Brand Safety: CHEQ/MAGNA/IPG Media Lab “The Brand Safety Effect (October 2018)

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