If you’ve been a marketer for the past five years you have almost certainly been sucked into the ongoing debate about the death of TV as a channel and as an advertising medium, and its imminent replacement by digital video, ostensibly from YouTube and Facebook, aka the digital duopoly.
Well, things have not quite turned out as predicted. Despite hundreds (yes hundreds) of articles predicting the death, decline and general apocalyptic end times for TV, the big stupid screen from the 20th century is still very much turned on.
The latest data from BARB/Thinkbox for the first half of 2017 does not appear to show a medium in terminal decline. The indomitable reach of TV continues to hover around the 90th percentile. Over the last 10 years the average amount of daily TV viewing has remained remarkably constant at around three and a half hours.
Yes, younger people watch less than older people and that figure has declined slightly. Yes, some of that TV is now taken up with time-shifted viewing and video-on-demand channels like Netflix. But the dominant paradigm of free-to-air commercial TV does appear to be relatively healthy. In 2007 the average viewer was exposed to 40 TV ads a day; that figure now sits at 43. Reports of the death of TV advertising have clearly been exaggerated.
I will pause at this point for those of you of a digital persuasion to question the probity of BARB, the accuracy of Thinkbox and the impartiality of your humble columnist. I know you think there is some kind of plot to present TV as a healthy medium and, based on your own experience of watching no TV in your own home (n=1), you reject BARB data (n=11,500) and remain convinced that TV is “pretty much gone”. My advice is stop reading now, because this column is only going to make you even madder in the paragraphs below.
That relatively stable situation for TV viewing is supported by the estimates of ad spend in the UK. Newspapers, magazines and direct mail have suffered annual double-digit declines since the ascent of the digital duopoly and arrival of mobile advertising. But investment in TV advertising has continued, relatively unaffected, throughout the digital decade and maintains a stable and significant share of the advertising pie. While journalists and tech publications were constructing a narrative of terminal decline for TV, its audience numbers and the advertising figures have told a very different story.
If we look back on the past five years, the relationship between TV and digital video presents itself as a three-act play.
Act 1: Tomorrow’s World
With the advent of digital video and the opportunities to advertise within it, the initial rhetoric was one of imminent death for traditional TV and its rapid replacement by a superior technology. Both Facebook and YouTube pointed to the fact that they attracted significantly larger audiences to their sites than the big cable and network stations in America and claimed they were already “bigger than TV”.
“We are talking about Facebook now as an evolution because of the amount of scale we have built and the fact that we can have targeted reach,” explained Facebook’s Carolyn Everson in 2013. “Those are very important terms to a marketer.”
In many ways, the incredible reach of YouTube and Facebook combined with these companies’ voracious appetites for growth make video a natural target for advertising income. The more granular targeting advantages of digital merely serve as the final cherry of differentiation on top of the cake. But if the digital duopoly was right to boast of their audience size and granularity, they were wrong to ignore the unfortunate media context that surrounded their newly created digital view ads.
It turns out that television is, quite by accident, a very fertile place for advertising. Consider the audience. ‘Often reclining and frequently exhausted’ might not sound like an ideal psychographic state for persuasion but a lack of activity on the part of the viewer ramps up the likelihood of them watching ads.
The audience for digital might be billions wide, but the window of opportunity for digital video is often only a couple of seconds deep.
True, a lot of these commercial messages are lost to zipping, zapping and the irresistible siren song of the downstairs shitter. But many of these program breaks results in ad watching at regular speed, for the full duration, and with complete attention. My best estimate, which tallies with the work of others, would be in the 35% to 40% range, though this varies significantly by time of day, room population and a host of other so-called exogenous variables.
Compare that with the jumpy, multi-screening smartphone user who is swiping and scrolling their way through a kaleidoscope of different channels while riding the bus to work. There is a reason why Procter & Gamble thinks its average digital video is garnering 1.7 seconds of attention and why Facebook is spending millions to persuade advertisers that two-second views of digital video can drive sales.
The audience for digital might be billions wide, but the window of opportunity for digital video is often only a couple of seconds deep. Add to this the problems of muting, viewability, bots and a series of highly irregular metrics and things did not quite emerge as many predicted back in 2012.
None of which is to say that digital video is not a decent tool or that it is unworthy of client investment. But it became clear that digital video presented on existing digital platforms was never going to be a straight swap for TV ads. If anything, the technology was much closer to digital display or even digital outdoor on your phone than the 30-second epic TV ads that it originally hoped to displace.
Act 2: Grandstand
The realisation that inserting anything remotely resembling a TV ad into YouTube or a Facebook feed was a tantamount to trying to bang a TV-shaped peg into a round digital hole kick-started a new approach.
Clearly what was needed to make digital video advertising work was the kind of involved programme context and relaxed audiences that TV was enjoying. Very quickly it became apparent that sport was a natural fit. Major events were frequently offered up for auction and could be purchased by the highest bidder.
Handily, many of the major sporting codes were concerned that young people were likely to lose interest in their offering if TV was the only way to consume their games because – rumour had it – the youth of today no longer watched TV. Best of all, sporting audiences were likely to tune in, relax and potentially offer the kind of stable media context where targeted audiences would potentially watch longer digital video advertising.
At first sight the digital streaming of sporting events appeared to represent a genuine opportunity. ESPN had reported an audience of more than 100 million viewers for the World Cup in Brazil and many thought the Rio Olympics would represent a watershed moment in which younger demographics and increasingly digitally savvy audiences would opt for the free digital coverage over the old-fashioned TV offerings.
Buoyed by these insights and worried about a lack of millennial viewers in the future, the NFL, which runs American Football in the USA, signed up Twitter to livecast its Thursday Night Football games on its platform in late 2016. Initial coverage in the press, which remains on hand at any point to confirm TV is dying and digital its replacement, suggested that Twitter’s first broadcasts had been a big ratings success. Two million tuned in for the first game and live sport was declared a “kingmaker” for Twitter.
The reality, however, was very different. In fact, that whole digital shift for sporting events turned out to be almost total pants. Yes, ESPN managed an audience in excess of 100 million for the World Cup but that was only if you used the stupid digital view metrics that renders anyone after three seconds as part of the audience for the rest of the month.
When Nielsen helped turn this number into a regular per-minute audience in the manner that TV audiences are estimated, the number dropped from 100 million to about 300,000 viewers, or 7% of the total World Cup audience. Not bad, but hardly grounds for a revolution.
Similarly, despite all the promotion and expense that various TV companies committed to in their digital coverage of the Rio Olympics, the audiences remained pitifully small. In the US NBC admitted only 3% of its coverage was watched digitally; in Australia the number was 2%.
And it was an equally disappointing story for Twitter and its NFL coverage. The quoted audience of two million was, once again, a stupid digital view measure. Turned into a TV metric the average audience barely made it past 265,000 viewers.
The next wave of digital video appears to confirm the ancient adage that if you can’t beat a medium, you should join it.
Not bad until you set it against the 14.5 million people who watched the game on TV. And while 70% of those 265,000 viewers were indeed millennials, a significant proportion of the significantly larger TV audience for the NFL game was in that age range too. The NFL reached approximately 15 times more millennials on Thursday night via TV versus Twitter.
But the most amazing statistic from Twitter’s brief foray into sports broadcasting was the cost of its advertising. While NBC was offering 30-second sports at its usual price of $550,000, Twitter offered their 30-second ads for $250,000. That might look a bargain until you factor in an audience that was more than 50 times smaller than TV. Advertisers lined up to pay 25 times the CPM to place their ad on Twitter versus on TV.
Disappointed by the outcome, the NFL moved on this year and signed a new digital deal with Amazon Prime. With bigger marketing muscle and more than 50 million viewers in America signed up for Prime, the hope was that this time digital audiences for Thursday Night Football would finally bloom. The audience did increase by 50% over Twitter in 2016. But the 391,000 who watched the game last Thursday was once again dwarfed by the 15.4 million tuning in on TV.
Act 3: Till Death Us Do Part
It’s now clear that TV will not simply be replaced by digital video. If anything, the last 12 months have seen a reaffirmation of the power of TV ads to drive the “long game”, as ad effectiveness experts Peter Field and Les Binet would call it, and build distinctiveness and brand image. Faced with this more durable foe and its stubbornly flat share of advertising, digital players are clearly opting for a new approach.
Rather than the aggressive replacement of TV, the next wave of digital video appears to confirm the ancient adage that if you can’t beat a medium, you should join it. Various partnership models are now in play in which digital aggressors and TV incumbents partner up to offer a hybrid model of television content and digital advertising.
Google is the most notable partner in this new approach. You may have noticed that CBS launched yet another new Star Trek series last month. You might even have caught the first few episodes on Netflix where it airs in the UK. But in the US CBS’s biggest new series of the year aired only its first episode on TV. After that all the remaining episodes of Star Trek: Discovery will be exclusively aired on CBS All Access, the station’s pay per view digital channel. And Google is handling all the digital ads that appear during the series’ run.
CBS is not the only one partnering with Google. It has also recently signed deals with a host of other TV networks to deliver ads in their digital streams, including Bloomberg, AMC, The CW, BBC America and Lifetime. The addition of supplemental search data makes Google a superior partner to work with to provide digital advertising.
The big question for CBS is whether moving Star Trek: Discovery from a TV platform that delivered 10 million live viewers and five million time-shifted viewers for the opening episode, to an online platform that hopes to reach four million subscribers by the end of the year makes financial and strategic sense.
It’s a growing issue for digital broadcasting. Offer the content through both TV and digital channels, and TV will outshine the digital alternative. Even ITV’s Love Island, which offered ‘must-see’ TV to millennials across both TV and digital devices, still racked up 72% of its 2.8 million audience from TV viewing.
But attempt to push the viewers to a digital only offering and the digital views might increase, but in nothing like the numbers that TV can deliver. Despite an enormous marketing push and a budget of £160m, Jeremy Clarkson’s Grand Tour on Amazon Prime only managed to pull in a third of the audience that usually watched its less promoted predecessor Top Gear on BBC Two.
Clearly TV stations must evolve a digital offering while digital proponents like Google are increasingly appreciative of the content, audience and platform that TV can provide. Rather than digital killing TV, perhaps the two will meet in the middle.
Of course, the other important issue for TV companies is whether partnering with Google for digital advertising will provide a suitable hybrid model for a successful digital future, or a Trojan horse that finally allows TV’s digital nemesis to get into the game and start making money at broadcasters’ expense, leading to their ultimate extinction. As one nervous TV executive told Business Insider last week: “You’ll have to consider whether you want to partner with a company that wakes up every morning trying to kill you.”
As Bob Hoffman, the famed Ad Contrarian, often points out, TV is not dying – it’s having babies. That metaphor might be a little premature for the current situation, but it’s clear that TV and digital have started dating after playing hard to get for the last five years.
The big question is who, if anyone, is eventually going to get screwed as a result.