TV is still king, but the crown is slipping

by Guest Contributor Duncan Southgate | April 24, 2019

Author: Duncan Southgate

Duncan Southgate
Global Brand Director, Media
Insights Division, Kantar
https://www.linkedin.com/in/dsouthgate/


TV advertising’s state of health remains the source of heated discussion and debate. Depending on the report you read, and the evidence you choose, it could be thriving, dying, evolving, or at the tipping point. One thing is for sure, our CrossMedia data finds TV’s brand building power is not what it used to be.

In his review of Ebiquity’s "Tipping Point" report, Nigel asks what are the implications of changing viewership for TV’s brand building effectiveness, so I decided to see if we could answer that question. Using our CrossMedia effectiveness database I compared campaigns assessed from 2015 onwards with those measured earlier. Among the campaigns we measured, TV’s share of paid media spend is down (from 36 percent to 33 percent), a trend that aligns well with external sources such as GroupM’s excellent "ThisYearNextYear" report.

What has been the effect of this reduced TV focus? The results are fascinating. Let’s start with the obvious, relatively lower spend means fewer people being reached and slightly less often (see the table). However, TV’s contribution to changes in brand metrics has fallen even more, down 15 percent across KPIs like awareness, image and purchase intent. And even more surprising is that cost effectiveness has also fallen against other media.


TV’s crown is slipping

Campaigns up to 2014

Campaigns 2015-2018

Share of spend

36%

33%

Average reach

70%

65%

Contributions to brand KPIs

 

Down 15%

Relative cost effectiveness index (100 = average)

76

67

Source: Kantar CrossMedia database

(483 campaigns)

(736 campaigns)


Now, TV has always been less cost-effective in building brand associations than other media, in large part due to its high share of spend, where excessive investment results in a high degree of wastage. So, if share of spend is reduced we would expect relative cost effectiveness to improve. But that is not what we are seeing. In this new analysis we are seeing relative cost effectiveness decline as share of spend declines.

golden-crown646x366

So why might this be? It is unlikely that TV creative quality is to blame, great creative still pays dividends. Rising TV costs may be part of the issue; this is certainly the case in countries such as  Germany. It’s also possible that other media are becoming more cost effective, and the rising global spend on targeted digital media contributes to this. And more multiscreen distractions are also likely to be a contributing factor.

But while the TV effectiveness trend is downward, TV is far from dead or dying. TV still generates the single largest impact of all media and touchpoints we measure. TV still allows brands to tell stories and evoke emotions at scale like no other medium. TV often acts as the engine around which a campaign is built and generates strong synergy with other media when the campaign is integrated well. And while it comes at a cost, this price tag is often well worth paying. One brand we work with increased their media budget by 60 percent to add TV to the plan and saw a 314 percent return thanks to that incremental investment. And there is reason to be optimistic about the future. Growth in programmatic TV targeting should increase TV effectiveness, as long as the opportunities aren't throttled and the related data supply chain doesn’t excessively increase costs.

So, TV advertising is far from dead or dying, but it is losing a little of its majesty. I would say the king’s crown is slipping. How would you describe TV’s current state of health? Please share your thoughts.

4 comments

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  1. Duncan Southgate, May 07, 2019
    Thanks for your comments and questions Tatiana.  Video on Demand and Online Video definitely generate a lot of marketing industry buzz and interest, but rightly so in my view.  While the majority of TV viewing is still linear, the clear trend is towards more VOD viewing across multiple devices (not just the primary TV set), and video is the fastest growing piece of the digital media pie.  So it's important that marketers optimise the balance across their total video investment (TV, VOD and OLV). The TV case study referenced came from the financial services sector, but I think the learning point is valid for most industry sectors.  The overall database learning shown here covers a wider variety of sectors (auto, financial, food and drink, household, personal care, technology, telcos etc.) and countries.
  2. Duncan Southgate, May 06, 2019
    Hi Alex, thanks for the question.  The relative cost effectiveness index is calculated by comparing share of brand contributions with share of spend.  Since 2015, we've seen TV delivering an average 22% share of brand contributions (so 22%/33% share of spend = index of 67).  That's an average across all of the brand KPIs we measure (including awareness, brand associations and purchase intent).
  3. tatiana bohmerova, April 25, 2019

    very nice accurate headline for your topic and situation with TV. I wonder, how big share is gaining online TV watching with regarding the factors like share of spend, average reach, KPI contribution, cost effectivenes... because online VIDEO, measurement and everything about online video is TOPIC...(not only in Slovakia I suggest).....

    .and last question? from what kind of market segment (telco, retail, finace, ...) was the client which inreased marketing budet by 60% because of TV and increased sale by 314%? :-). thanx Tatiana

  4. Alex Mullord, April 25, 2019

    Hi Duncan, thanks for sharing this interesting research. I was wondering how you calculate your Relative cost effectiveness index? 

    Thanks

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