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Why TV Advertising's Precision Must Evolve

Last updated: January 18, 2021

Why Tv's Advertising

Why Tv's AdvertisingTelevision advertising has been a mainstay of marketing campaigns around the world ever since the first television advertisement was aired in 1941. Television advertising quickly became king due to its ability to reach massive audiences while using audio and visual technology to deliver a marketing message. However, much has changed about the world of marketing since the 20th century—namely, the advent of digital and mobile marketing.

Since the explosion of personalized marketing methods like mobile, television as an advertising medium has been criticized as a laggard. Mobile and online advertisements are capable of advanced attribution, allowing marketers to shape their campaigns in real time for optimal success. Meanwhile, television advertisements are much more difficult to attribute. Marketers often must wait until their campaign is finished before they can begin to approximate how vital their television strategy is to achieving conversions. This poses a huge challenge for offline media optimization.

In today’s multiscreen environment, using a unified marketing measurement method complete with accurate attribution methods is an absolute necessity. To respond to this demand, television advertising must become much more precise and measurable. Otherwise, television will risk continuing to lose major ground to mobile and online ads.

Losing ground to mobile ads

graph visualizing advertising expenditure by mediumCredit: Warc’s Global Ad Trends Report

Mobile ads are on the cusp of supplanting television ads in terms of ad spend in several critical markets. According to Warc’s Global Ad Trends report, by the end of 2019, global mobile ad spend will overtake TV completely. Worldwide, organizations spent $138 billion to reach mobile users in 2018. In 2019, that number is expected to grow to $153 billion. There are two major contributors to this: the ubiquity of programmatic advertising and up-and-coming 5G networks.

Programmatic and automated mobile ad spend is becoming the norm, much to the glee of many marketers. This is because programmatic advertising is simple to attribute using multitouch methods and is extremely efficient. Out of all digital display ad spend, 63 percent was automated in 2018. In 2014, that number was only 35.3 percent. These stark figures become even more significant when considering the explosive growth of mobile ad spend in general.

If automation is significantly affecting the rise of mobile ad spend today, then 5G will likely shape the future of mobile advertising. 5G will strive to increase the speed and responsiveness of wireless networks, which will permit significant growth in the amount of data transmitted over wireless systems.

Telecommunications companies are still investing in 5G, but experts are currently predicting that about 18 percent of the world population will be on a 5G network by 2024. The impact that 5G technology will have on marketing is not fully understood yet, but experts predict it will quicken communications and allow for greater use of media on the go—for example, downloading a full-length HD movie on a 5G network could take less than 10 seconds!

With so many amazing benefits either readily available or on the horizon for mobile advertising, the threat to television advertising is bigger than ever. However, that does not mean that television ad spend is an unwise investment. It means that television will need to adapt in order to stay relevant in the face of mobile challengers.

TV needs to update—or risk obsolescence

When it comes to effectiveness as a marketing channel, television risks being overtaken by competing mediums. Traditional live TV is under the most duress, as it is threatened by an increase in consumer interest in “cord cutting,” or abandoning cable television in favor of alternatives such as subscription video streaming. Year over year, subscription rates for traditional television are decreasing. However, some age groups are more loyal to television than others. For example, only 20 percent of people over age 50 would consider dropping cable television completely. Alternatively, 42 percent of people between the ages of 18 and 34 are open to cord cutting. This means that for some markets, the efficacy of television is already faltering. It’s no wonder that half of television industry professionals in the United States are concerned that they cannot keep up with industry changes.

Despite this looming threat, television advertising is still worthwhile since it reaches a large audience. This makes it a leader when it comes to top-of-the-funnel marketing efforts. Unfortunately, TV is falling behind when it comes to real-time measurements of campaign performance and the ability to target customers using person-level data. These pressures are forcing some broadcasters to put their heads together and create a more successful experience for marketers. Currently, marketers are demanding a single measurement source for every platform—a tall order which has yet to be completely filled.

Offline media optimization requires attribution

 Before a single measurement system is available for television advertising, broadcasters must implement an effective attribution method. Attribution is extremely valuable to marketers, with two out of three marketers agreeing that marketing attribution has become a bigger priority when managing campaigns. This is because marketing attribution seeks to ascertain the strengths and the impact of an advertisement on the overall success of a marketing campaign. When done in near real time, attribution won’t just help measure marketing ROI on a campaign—it will help marketers actively manage ROI.

It’s not simple to attribute marketing success to television advertising. As previously mentioned, television is typically used for top-of-the-funnel marketing efforts. Consequently, it rarely is credited as the final touchpoint. Since many attribution platforms are biased toward the final touchpoint, television’s effectiveness in a marketing campaign is being undersold.

Using unified marketing measurement for success

While most marketers are fully aware that each of their campaigns has a variety of touchpoints, they still have difficulty prescribing partial credit to each exposure in order to accurately measure campaign performance. This is why a unified marketing measurement approach that uses multitouch attribution models is paramount to properly attributing success on TV platforms.

By using unified marketing measurements, marketers will be able to more accurately attribute lift in branding to the correct form of media. They will be able to determine which audience segments are converted and attribute customer engagement to the relevant television campaign exposures. For example, research has shown that television advertisements account for a 36 to 48 percent lift in retail website traffic and a 10 to 15 percent lift in foot traffic at big box stores. That can translate to significant success for a marketing campaign—but many marketers unwittingly ignore these significant results by focusing too much energy on final touchpoints.

graph displaying how TV advertisements effect website visitorsCredit: Wayfair Technology Blog

Some online video streaming platforms have come out ahead of broadcast television with approaches that utilize unified marketing measurement. For example, Hulu recently introduced attribution software that allows marketers to measure business outcomes and get greater ROI on their ads. Their tool matches an advertiser’s customer data to Hulu’s campaign exposure data, giving greater insight into when customers saw ads and what sort of impact those ads had. More often than not, these television advertisements caused a measurable lift in branding initiatives.

Final thoughts

It should be abundantly clear to marketers that despite the lack of quantifiable information, television advertising is still very effective. However, for television advertising to stay competitive in the modern marketing environment, advanced attribution capabilities must be made available. These attribution insights should be quantifiable and available in near real time in order to achieve offline media optimization. While attribution challenges are apparent with television advertising, the future of real-time attribution in television broadcasting is rife with opportunity.

Written by Marketing Evolution