Unlike the crystal clear picture streaming through your favorite online service, the lines between traditional brand advertising and direct response have never been more blurred. Both, however, face the same challenges, in an ever-changing media landscape that evolves as fast as the devices we consume with.
With the explosion of digital offerings paired with traditional linear TV, there is no shortage of content as we enter a new fall TV season. The sheer volume of available programming advertisers have to choose from is staggering, which makes the need to quantify strategic decisions even more important in the age of “Big Data.”
Decision making in the world of analytics is now driven by aggregated response and customer data, leading to a true hybrid approach. A high level understanding of how the sands are shifting in the market will serve buyers and agencies well as they as they evaluate more granular opportunities in the coming year.
More content equates to more impressions. A recent Nielsen projection for the upcoming season estimates there will be 119.6 million TV homes in the U.S. market; a 1.2 million increase in households from the National Television Household Universe Estimates from the previous ‘16-‘17 season. While accounting for “cord-cutters” in the process, these new estimates lend weight to the messages coming out of the TV upfronts this year that – despite the decline in linear ratings – overall viewership is at its highest level to date. Understanding and quantifying the shifting marketplace will be imperative for buyers and agencies as they evaluate national TV opportunities in the coming year. Take the NFL, for example: TV ratings were down in 2016 and yet CPMs in key demos are on the rise this year. This is due in part to major gains seen by the networks amongst adults 25-54.
We Need to Talk About Netflix – The Rise of Digital Doesn’t Mean the Death of Linear TV
Over half of adults in the U.S. say they have Netflix in their household, according to a recent study (Leichtman Research Group). Regardless of all the attention these streaming services garner, linear TV isn’t going anywhere in the immediate future, but the changing viewing habits of consumers does need to be considered when planning for clients. Despite the $1 billion (billion with a “B”!) in total marketing expenses Netflix intends to spend this year, the biggest percentage of overall TV viewing is still commanded by traditional TV networks;viewers just may not be parked on the couch at 8:00PM to watch their favorite shows as they have been in the past. Buyers can take stock in that people will eventually find their way to that programming now via DVR, On-Demand, or through a digital platform. The new consumption habits of viewers today are here to stay, as is the current TV landscape. Marketers willing to adapt to these changes to more finely target their preferred audience will ultimately rule the day.
In an effort to avoid being left behind by the likes of Amazon, HBO and Hulu, networks like AMC and FX are following suit and doing away with ads in their new offerings (much to the chagrin on media buyers everywhere). With new deals in place, Comcast customers will have the ability to access these network’s programming sans advertising via on-demand and streaming, all for another additional monthly fee ($4.99-$5.99) tacked right onto their bill. What this means for buyers is the continued dilution of the available media offerings in the marketplace. As we look down the road however, the prevailing thought within the industry seems to be that a shift like this, which provides a small but immediate challenge to the behemoth known as Netflix, will serve to strengthen these ultimately ad-supported networks as they aim to drive audiences towards their most viewed and critically acclaimed offerings.
The explosion of à la carte offerings in the media world has transformed the industry landscape. Advertisers should rest assured that their audience is still out there, and discerning marketers will need to adjust in order to reach their targets.
Let us start planning how to gain more market share.