While there are many unexpected findings in the new report from iSpot on the state of television advertising during the first weeks of the Covid-19 lockdowns, there is one stat that stands out from the rest: 25.6% more brands (1,247 of them) ran ads on TV in the four week period from March 14 - April 12, 2020 than in the same window during 2019.
That data point is even more conspicuous than this one: ESPN is still generating a sizable audience despite the absence of live sports.
Indeed, that advertising data represents a fairly massive increase ,and its left many wondering ... well, how?
It’s easy to assign the bump to newly open inventory, caused by the loss of sporting events and to the overall drop in pricing in general as brands in categories like travel drop out. But it’s unlikely that those 1,247 brands showed up en masse—if nothing else, TV commercials take weeks to concept, cast, shoot and edit.
Rather, television advertising has been opening up to more brands over the past year for a variety of reasons.
1. The Rise of CTV: The ability to target smaller audience segments makes connected TV (CTV) ads more cost-effective, especially for local advertisers. Better still, companies like MadHive have figured out how to combine CTV buys with local linear buys to achieve incremental lift. These buys can also be made programmatically, and thus appeal to advertisers who are familiar with digital advertising.
2. DTC Advertisers Find TV: Many DTC advertisers are discovering TV, having more or less maxed out their Instagram audience. On a macro level, they realize too that TV allows them to feel bigger and more important, more like a mainstream brand than an unknown niche brand the user has been savvy enough to discover. This is key in that, while being that trendy niche brand may have been critical to their initial success, most have dreams of taking on the big players and dominating the market themselves. They realize that in order to achieve that, TV is a must.
3. Digital Disenchantment: The Four Horsemen of the Digital Ad Apocalypse: Fraud, Viewability, Brand Safety and Ad Blocking Software continue to run rampant. And while brands are not abandoning digital, they’re looking to hedge their bets. TV offers them a brand-safe environment where ads are always viewable, ad blocking software is not an issue and fraud, while growing, is still nowhere near the level found on digital. In addition, TV allows them to run image and branding ads rather than pure direct response. There’s also an emotional connection—as many in the television industry have been pointing out, people who have trouble remembering a banner ad they saw 20 seconds ago can easily remember TV commercials they saw 20 years ago. That makes TV advertising much more effective.
4. Better Measurement: New methods of TV measurement, from ACR data from smart TVs to multitouch attribution (aka business outcomes) have allowed brands to gain deeper insights into who is watching their ads, what actions they have taken and how to optimize their ad buys based on their intended goals. While this sort of measurement has long been available on digital, its emergence on TV has reset expectations about the value of TV viewing data. For brands that cut their teeth on digital, the availability of these types of metrics makes the switch to TV all that much easier.
5. The “Pivot To Video”: Yes, it was even a joke on BoJack Horseman, but the “pivot to video” that many digital brands made meant that there were usually ads on those short form videos. Which meant that many brands that were only advertising on digital already have video ads, which they can easily turn into TV commercials without incurring additional cost. (TV commercials can be costly.) It also meant that the marketing team was familiar with how a video ad was created and what the metrics on digital looked like, two skills that made it easier for them to decide to experiment with TV.
As the ad-supported TV universe continues to expand, we are going to see even more brands on TV. The ability to target consumers on linear TV as well as on-demand, whether it is via Project OAR, Nielsen or the MVPDs will mean that even more brands are able to run ads on TV.
The fallout from the pandemic should accelerate this as well—with more people at home watching TV than ever before, the opportunities, especially with proper targeting, to reach consumers on TV will get many more marketers to take the plunge.
The likelihood of a tight economy will favor ad-supported services as well, especially free ones, and so we should see an expansion of available inventory, which should serve to bring down CPMs while affording opportunity to reach new audiences.
If networks and platforms are smart, they will work to make the experience better for these new advertisers and their customers by shrinking ad loads considerably and experimenting with new interactive ad formats.
At this point, the game is theirs to lose.
Alan Wolk is the co-founder and lead analyst for media consultancy TV[R]EV
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