Marketers Lose Confidence in TV Advertising

An interesting report has appeared on Advertising Age regarding the lack of confidence that advertisers have in traditional television advertising. A recent TV and technology survey conducted by the Association of National Advertisers and Forrester Research has reportedly found that “two thirds of the C-level-executive respondents said they are watching the medium closely, up from just half two years ago, and 87% of respondents said they were going to be spending more on web ads in the coming year”.

Advertising drives the television industry, meaning that if media buyers opt to spend in other forms of media, particularly in emerging forms of online media, it seriously destabilises the economic foundations of the industry. It has long been the belief of Televised Revolution that we are watching the dying days of the television format as we know it. With less money being spent in advertising, production costs are set to reduce, meaning that we will see a rise in the amount of cheap and generic programing on offer from the commercial broadcasters. High quality televisual drama will continue as it will simply find other forms of distribution (digital downloads, DVD/Blu-Ray, etc) and then likely find life repurposed on subscription television.

Driving the desire to minimise television broadcast spend is the belief reported by 62% of respondents that traditional TV advertising has become less effective over the past two years. Undoubtedly, this is due to the recent viewer drop-off as competition for consumers has increased with competing media forms (such as game consoles, the Internet, DVD, and digital downloading of traditional TV content).

Of course, how advertisers will seek to reach the consumer during the move toward new distribution models is of interest.

Eighty-seven percent of advertisers believe branded entertainment is the key to TV advertising in the coming year, and 65% of them are eager to try ads in online TV shows. And emerging technologies continue to lure marketers looking to experiment. Forty-three percent would like to try interactive TV ads; 55% are interested in ads embedded in VOD; and 32% would like to try ads attached to the set-top-box menu.

Much the same way as advertisers irritated web-surfers in the early days of the Internet with pop-up advertising and other irritants, expect to see advertisers stumble frequently as they experiment with the best ways to interact with the consumer.

Australian broadcasters have been slow to adapt to the new media environment that we’re rapidly moving toward. It will be interesting to see how successful they will be in retaining their profit margins as traditional television media buying subsides.