TV commercials air nationally and large swaths of the audience are exposed to any given commercial
By Kavita Shenoy
It’s no surprise that brands increase their ad spend during the holiday season. Last October, BARC reported that ad volumes were up 13% over four weeks and 25% from October 2019. What was encouraging to note is that 22% of advertisers who contributed to this increase were new advertisers.
Television advertising has historically been driven by a stable base of 700-800 advertisers, with most of the advertising space being bought up by FMCG companies. New advertisers on television are an encouraging sign of confidence in the medium. Television is not just an old advertising format.
While digital advertising is definitely cutting TV ad spend money, the common perception today is that TV advertising is dying. This is clearly not true. Television advertising space has traditionally been pre-sold to large consumer and retail companies in advance. From the looks of the current top 10, that definitely hasn’t changed. E-commerce saw extraordinary 97% growth despite Amazon, among the biggest spenders, remaining flat on spending year-over-year. The conclusion is that there were many more e-commerce brands joining TV to drive category spending this year.
Who are these new advertisers and what do they earn on television? Since these are new advertisers, it is assumed that these are new businesses, most born on the Internet. Internet based businesses revolve around the user being less than a few clicks away from finding their services. These companies rarely have a brick and mortar version of their services. For example: UrbanCompany, Uber, Swiggy, Meesho, Myntra, etc.
Common wisdom today says that digital channels are a cheaper and more efficient way to deploy marketing money. The general marketing framework of born-on-the-internet businesses is to stick with digital as the easiest way to get potential customers to click on their app or website to try out their services and products. On the other hand, even for older companies new to TV advertising, going digital is much more profitable.
Second, the convenience of switching creatives, the ability to experiment to understand ad effectiveness, and the promise of specific audience targeting are big advantages in favor of digital marketing over TV advertising.
And finally, creating a TV commercial is a long production process and buying advertising space is not a very accessible proposition.
These are all common arguments in favor of digital advertising. However, there is still a lot to be said about the benefits of television. On the one hand, it promotes trust and credibility and ensures brand safety. What better token of credibility than being in the company of big, trusted brands like Tata, Hindustan Unilever and Reckitt?
Trust, credibility and brand safety are three issues inherent in the structure of the Internet, and therefore in digital advertising. Brands struggle to control the environment in which their advertising appears, putting their brand values at risk.
And contrary to popular opinion, digital advertising can actually be expensive. The cost of advertising is inversely proportional to the granularity of the targeting parameters chosen, compounded by the fact that only small sets of audiences actually see a hyper-targeted ad.
TV commercials, on the other hand, are broadcast nationally and large sections of the audience are exposed to any given advertisement. Even though TV is inherently seen as expensive, untargetable and unmeasurable and within the reach of only “big brands”, the scale of reach is definitely a winner for this medium. are as good as getting a 7% CTR on a hyper-targeted, A/B-tested, and dynamic creative digital campaign.
With connected television (CTV) looming on the horizon, these conflicting sentiments are set to change. CTV is the convergence of TV and digital in which content is broadcast via an Internet-enabled TV or set-top box, bringing together the best of TV and digital, especially in terms of advertising. CTV viewing is on a significant growth trajectory and will grow by 31% in India and 82% globally in 2021. [India CTV Report 2021- MediaSmart].
Television networks in the United States make CTV the centerpiece of their initial pitches. This trend has resulted in a significant increase in CTV’s initial ad spend, which accounts for one-third of all CTV video ad spend.[E-marketer CTV Report 2021]
For new advertisers looking for large-scale reach, jumping on the traditional TV advertising bandwagon today just to get a VIP pass to the next CTV wave might not be a bad idea. .
The author is founder and CEO of Voiro. The opinions expressed are personal.
Also read: How conversational marketing is the need of the hour for brands
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