Why TV budgets continue to grow even as mobile consumption skyrockets
May 15, 2014
Coca-Cola's user-generated campaign
At the same time that big brands including Coca-Cola and Mondelez are shifting over significant portions of their budgets towards mobile, television ad spend is on the uptick, highlighting the growing need for traditional and digital advertising to work together.
Nielsen’s new “Advertising and Audiences” report finds that TV spend within the United States raked in $78 billion in 2013, up from 2009’s $69 billion. The findings underscore the importance that TV still plays for brands that are still trying to get a grasp on mobile and digital in rounded-out marketing mixes.
“Marketers for the most part are still trained to think TV-first,” said Ian Chee, chief strategy officer at MRY, New York.
“Despite the fact that trends towards mobile is clear, it’s also relatively recent compared to televisions history,” he said.
“It’s human nature to gravitate towards what we know. That’s television, a blunt tool that can still guarantee in one fell swoop a certain amount of reach for clients. There is a certain level of comfort in that for marketers whose main concern is awareness and not engagement.”
Mondelez is betting on programmatic for online video
Switching up traditional tune-ins
Nielsen’s report finds that Americans spend more than one-fifth of their time in front of a traditional TV set. On top of this viewership, the length per hour that commercials run within programming is increasing.
The renewed interest in TV advertising can be chalked up to significant price drops the past five years.
Cable TV has a slight edge over network in terms of advertising opportunities with an average of 15 minutes and 38 seconds of commercial time per hour. Network stations rake in an average of 14 minutes and 15 seconds of commercials per hour.
Broadcast TV advertising costs marketers a pretty penny though. Per Nielsen’s report, the average cost of a 30-second primetime cable and broadcast ad cost $7,800 in 2013. For a broadcast-only primetime spot, advertisers shelled out a whopping $75,000.
While the number of consumers tuning into traditional TV still appears to reach a wide group of consumers, how these users watch programming is changing significantly as many are simultaneously using multiple devices.
Even with consumers’ habits changing drastically, Aaron Shapiro, CEO of Huge, New York, said that it is not surprising that TV spend is on the uptick given that the strength of the economy has grown since 2009 when it was at rock-bottom.
“Since then, we've seen an increase in economic growth, allowing advertisers to be in a much better place to invest more heavily in TV,” he said.
“One can also argue that TV remains an effective medium to reach a mass audience despite the fact that this audience is becoming increasingly fragmented. Despite mass audiences declining over time and becoming increasingly fragmented, as long as advertisers are willing to pay for mass viewership, television will continue to rise.”
Banking on TV
Nielsen’s newest findings line up with a couple of interesting investments from Coca-Cola and Mondelēz International — both of which have embraced digital and mobile significantly the past few years — with TV-heavy campaigns.
Coca-Cola is evolving the second year of its digital-first “Ahh effect” campaign into a TV spot that pulls in user-generated content. In conjunction with the new TV spot, the soda giant is also rolling out new Web content specifically geared for mobile (see story).
Coca-Cola’s move suggests that while digital will underpin the campaign’s efforts in reaching teenagers, big-budget mediums such as TV are still needed for a more comprehensive marketing approach.
In another new example of the importance of TV in multichannel marketing campaigns, Mondelēz International’s Oreo signed its first global movie marketing deal with Paramount Pictures for the upcoming film “Transformers: Age of Extinction.” Oreo’s media buy includes television, product placement, packaging and point-of-sale materials.
Digital components to the campaign include new games within Oreo’s Twist, Lick and Dunk mobile application and YouTube ads.
Movie-themed content within Oreo's app
Mondelēz has made a big bet on mobile and digital in the past few years, evidenced by a new effort for its biggest multi-brand campaign that supports the upcoming FIFA World Cup (see story).
Therefore, it is a bit surprising that the brand continues to pour money into TV and other forms of traditional advertising.
Given that TV plays a key role in the Coca-Cola and Mondelēz examples, it is conceivable that digital is instead being funded from mediums other than TV, such as print, in these cases.
“We know that device usage is simultaneous and that the customer is impacted by many touch points across their customer life cycle,” said Jennifer Wise, analyst at Forrester Research, Cambridge, MA. “Therefore, it's possible that TV spend is growing, but is being accompanied by an increased investment in digital and mobile, as well.”
Lauren Johnson is associate reporter on Mobile Marketer, New York