Four States Small Business Blog

Pros and Cons of TV Advertising

Posted by Pam Larimore on April 6, 2017 at 8:30 AM

tv-advertising.jpgAs of 2015, there were 1,780 commercial TV stations throughout the United States, more than 18 times the number of channels available in 1950 (a mere 98). It provided marketers with an average reach of 85% across adults of all age groups in Q3 2015 in the US alone, making it a powerful tool that shouldn’t be ignored or sidelined, even as digital gains more ground. To develop the best marketing strategy that leverages this medium to your benefit, you need to understand the pros and cons of TV advertising.

We just want to reiterate that at Zimmer, we believe in the value of all advertising formats. We’ve worked with a variety of clients, so we’ve seen how successful marketing strategies that cross platforms can be. This series should help provide the research you need to gain perspective and make the best advertising choices based on reliable and up to date research. Today’s post is part three in a series focusing on the pros and cons of each of the additional platforms: Radio, Billboard, Newspaper, Direct Mail, and Yellow Page Advertising. To see our previous post on the pros and cons of billboard advertising, head here or the initial post on the pros and cons of radio, head here.

TV Advertising Pros

Trust

As of 2015, at least 63% of consumers on average said they trusted TV ads, according to Nielsen. That actually peaks when you look at Millennials (67%) and is weakest among the older generations (55% for Boomers and 48% for those 65 and older). However, a 2016 survey from MarketingSherpa showed that TV was the second most trusted source when consumers want to make a purchase decision. This may be thanks in part to the credibility offered by an audio/visual medium, which we’ll touch on in a moment. Either way, this trust leads TV to have the highest efficiency for important KPIs (e.g., sales, new accounts), including four times the sales lift offered by digital.

Penetration into US Households

As of 2014, roughly 98% of households had a TV, and on average, those households had at least two TVs. About 60% of households have cable access, while 31% have an alternate delivery service (e.g., satellite). That doesn’t even account for televisions in public spaces like restaurants and bars or local stores. This means exposure to the medium is high, and with the right strategy, you can expect a reasonable amount of frequency.

Significant Media Time Spent with TV

On average, TV reaches 87% of adults in the US, and they spend about 25 hours weekly with TV, but that can vary quite a bit by generation. Younger generations tend to watch less TV (18 to 24 at a little over 14 hours weekly, 35 to 49 at nearly 29 hours weekly) while older generations watch more (Boomers at 48.5 hours weekly with TV).

Influence through a Combination of Sight and Sound

Both the senses of sight and sound affect how people form memories, and the combination of the two can improve that further. More important, however, is the brand perception you can establish using the combination of senses along with the clarity of your message. Words alone (either visual text or audio dialog) require a certain amount of space to fully describe your brand, product, or services. Video can accomplish just as much in a significantly shorter amount of time. For instance, while it might not be clear to your audience how to use a new product just by describing it, you can easily show how the product solves a problem in a TV advertisement.

Tapping a Captive Audience

Especially during live TV and certain television events (e.g., the Super Bowl), your viewing audience is a captive one. The chance of a viewer channel spinning during their program of choice is low because they don’t want to miss anything, and even some On Demand viewing options disable the ability to fast forward through limited commercial breaks. That ensures a certain level of reach, although it isn’t absolute — viewers may consider commercials a good time to get up and do something else until the program returns, and most viewers are already multitasking. However, that captive audience may be multitasking in a way beneficial to advertisers: about a third of such activities directly relate to what viewers 19 to 32 are seeing on TV.

TV Advertising Cons

Commands More Advertising Dollars

The average cost to advertise on TV in 2016 was as much as $342 thousand for a 30-second ad, up from an estimated $112 thousand for 30-second ads during prime time in 2014. According to both counts, that made TV ads the most costly (or almost the most costly) format to use. Those numbers only get higher when looking at the most coveted spots. To advertise during CBS’ popular The Big Bang Theory in 2015, you’d need to pay more than $344 thousand per 30 seconds, and if you wanted 30 seconds during the 2014 NCAA Men’s Division I on the same network, you’d need to leverage a hefty $1.55 million. The numbers just keep climbing: According to Forbes, the average cost during prime in 2017 was as much as $500 thousand, while 30 second Super Bowl ads were considered a bargain at an astounding $5 million. Furthermore, production costs associated with TV commercials can also be pricey.

Internet Enabled Mobile Platforms See Limited Adoption

Marketing is powerful, and that’s part of why you may believe that streaming digital is the overwhelmingly best choice for TV ads. This is still valuable, and it is seeing growth. However, current adoption rates are extremely low. According to MarketingCharts.com analysis of Nielsen data, Millennials that use their tablet and smartphone to watch streaming TV (including apps like Netflix and HBO Go) only spend 100 minutes and 67 minutes weekly doing so respectively, despite the fact that they’re leaders in consuming media online.

Most Time-Shift Capabilities Enable Commercial Skipping

While this is platform dependent, many of the ways viewers can watch their TV shows of choice after it’s already aired live permit them to skip ads. This may be predominant in DVR and other recorded options since viewers can simply fast forward, however, some apps can also allow users to skip ads after they’ve viewed a certain amount of it. On Demand options may vary by network and service provider; some disable the ability to fast forward, ensuring ads get seen, while others do not.

Reach and Effectiveness Diminishing Over Time

We mentioned that the trend of watching digital TV is rising among younger generations, but the reach and effectiveness of linear TV is also sinking. A previous study by McKinsey & Co. believed that by 2010, efficacy of TV ads would be a mere third as powerful as they were in 1990. Certainly, the amount of time being spent with linear TV is falling, at least with adults younger than 50. The smallest change was for viewers 35 to 49 years of age (1% less time spent YoY), while the greatest drop is viewers 18 to 24 (7.4% less time YoY), according to Nielsen data. Over the course of five years, that shift is seen as fairly drastic. In 2016, viewers 18 to 24 spent more than 40% less time with TV than they did in 2011. This is further exacerbated by severe limitations in targeting. Now, that isn’t to say TV isn’t still among the most influential platforms to use today, but it serves to highlight changing behaviors that need to be noticed in your own audience.

Limited Local and Community Influence

Unfortunately, the most receptive audiences for local and community influence is centered around newscasts. That limits the number of spots that can be effective, especially in light of flagging reach and influence during prime time (i.e., as much as 25% of the population isn’t reached by network TV prime time scheduling).

Key Takeaways

Whether you’re trying to expand your reach or build trust with an expansive audience, TV advertising can bring a lot to the table in terms of marketing, especially when you consider digital streaming options and how close TV can be to the ultimate purchase decision. However, the platform can be costly and the local influence limited. While streaming may extend its appeal, especially on mobile, TV is seeing a gentle decline thanks in part to increasing cord-cutting and never-corded tendencies in younger generations. All this means touchpoints need to be planned for carefully with an eye to audience behavior and message receptivity. Keep these tips in mind:

  • Always examine your audience’s needs and understand how they prefer to receive that message. TV can be good for specific types of audiences based on variations in how you can share your message in terms of audio and visual creative.
  • Develop creative that will keep audience’s attention as well as move your message forward. Remember, the audience sitting down for TV programming is a relatively captive audience, especially during live TV and certain types of On Demand.
  • Solidify recall by tapping into multiple forms of memory formation and linking visual information (text or images) with emotions (stemming especially from audio). TV balances audio and visual senses, which provides a unique way to reach and influence consumers.
  • Plan to buy in advance. The earlier you can reserve your ad time, the more likely you are to get an affordable cost per spot.

A quick note on radio and television:

One of the things we often get asked about is how radio compares to television. It’s important to remember that each functions differently: both provide different reach and intersect audiences at different points in their day and in their path to purchase. Radio relies on the theater of the mind, provides a higher frequency, and reaches people at all times of the day while TV gives viewers a clearer grasp on complicated concepts and offers opportunities for a richer level of creative. However, it’s important to remember that unless your advertising budget is extremely restricted, you shouldn’t necessarily be considering one over the other beyond which method will best express a facet of your message. According to a study from Colmar Brunton, on their own, radio saw an average lift in sales of 17%, while TV provides a 13% lift. However, when used together, the average uplift reached 21%. A balanced approach to using both channels may just provide the best results for your business.

Hopefully, this overview of the pros and cons of TV advertising gives you a solid understanding of what television will actually achieve for your brand. Take the time to determine where in your strategy it can serve to improve your ROI and achieve your goals. Also, be sure to check back soon for the third part of our Advertising Format Pros and Cons series focusing on Billboards. Remember, Zimmer can help with marketing techniques on any platform and enable you to develop a truly omnichannel, multiscreen strategy. Feel free to contact us today to find out what we can offer you as a media partner.

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Topics: Integrated Marketing, Marketing Strategy