How Advertisers Are Taking Advantage of the Changing TV Ad Landscape

How to navigate the changing tv ad landscape

The world’s first TV commercial aired on July 1st, 1941, in the New York market. It was a Bulova ad that showed before a Brooklyn Dodgers, Philadelphia Phillies game. In that short 9 or 10 second window, there wasn’t much of a goal for the ad beyond trying a new medium and reaching a large, broad audience.

Over the next 70+ years, that goal didn’t really change for advertisers. They purchased advertisements with the main focus of reaching as many folks as possible. They were managing the upper part of the marketing funnel, meaning they wanted to generate as much brand awareness as possible through that reach. In recent years though, the TV ad landscape has begun to change. And advertisers are finding ways to benefit from those changes.

A changing TV ad landscape

According to eMarketer, total ad spend for TV in 2017 will reach roughly $71.6 billion. Of that total, $1.26 billion is projected to be targeted/data-infused TV ad buying. Predictions for 2018 show that targeted/data-rich TV ad spend will jump to $2.25 billion in 2018, while the overall US TV ad market will remain relatively flat at $71.93 billion.

TV ad landscape changes

Without diving too deep into numbers storytelling, I want to point out that these numbers show a definite shift in the television advertising industry. Yes, a clear majority of TV ad spend still occurs in the yearly upfronts on an age/gender basis. But the numbers prove that advertisers have started branching out beyond traditional TV marketing.

So what’s driving the change? Fast-advancing technology.

Consider the iPhone, which came out just over a decade ago. Today, the United States has over 200 million smartphone users. And it’s not just devices that are advancing; speed and access to the internet continue to increase. In 2016, 88.5 percent of the American population had access to the internet.

These and other tech advances have driven change in the TV ad landscape. Audiences can now get their content from several MVPDs or streaming apps. Consequently, TV advertising models have had to evolve to survive. For the TV industry, evolving has meant tapping into the treasure trove of data available through internet and smart/connected devices. This TV data, in turn, has unlocked new possibilities for advertisers.

Advertisers using TV to span more of the marketing funnel

To answer the question “how are advertisers taking advantage of the changing TV ad landscape?”, we need to remember that advertising is a complex world. It has various parts that have to work collectively to create the ideal marketing campaign. This means advertising will look very different depending on what part of the funnel it’s in.

Thanks to advances in technology, the ad industry no longer has to treat television solely as an upper-funnel opportunity.

Marketing on television today has expanded to include much more of the consumer journey than ever before. Thanks to advances in technology, the ad industry no longer has to treat television solely as an upper-funnel opportunity. Data and targeting, available through devices like smart TVs, can now help advertisers reach audiences at multiple touchpoints along the marketing funnel.

Upper-funnel

There’s no arguing that the broad reach of television serves as an effective branding mechanism that plays an important role in many marketing campaigns. TV truly dominates in creating brand awareness. It also offers efficiency from a pricing standpoint when an advertiser simply wants viewers. That’s why the majority of ad spend on TV is still in broad age/gender ranges. TV as an ad medium still reaches an enormous number of people and creates the awareness many advertisers want.

Mid-funnel

Jump down in the funnel to interest, consideration, and intent. How can television accomplish any of this? This is where the benefits of new technology come into play. Brands can now leverage the power of predictive analytics to understand their customers. They can learn who’s interested in or considering a product, and who’s intending to purchase.

Television has always been a powerful ad medium given the emotions it can evoke through sight, sound, and storytelling. That’s why they call it ‘premium content.’

From there, advertisers move their analysis into targeting mechanisms such as addressable TV to manage the story of a more refined message. It’s less about branding (i.e., upper funnel goals) and more about showing appropriate creatives that can drive the consumer to perform an action. That’s where addressable advertising comes into focus. The advertiser can hone in on a particular audience target and deliver an ad specifically to that segment.

Lower-funnel

From there, it’s a short jump to actual purchase. Again, by leveraging the connectivity of televisions and thus the data generated, advertisers can run analytics to get a true understanding of the effectiveness of campaigns. Based on exposure conversion analysis, advertisers can do what they’ve been able to do in digital for years – attribute sales to television commercials. The data of course has a lot of noise. But data can be used to understand how the customer was pushed along the purchasing journey. Time series analysis can break through some of that noise by looking at time lapse between purchase/action and when the commercial was viewed, essentially creating an attribution model.

An increasingly powerful advertising medium

Television has always been a powerful ad medium given the emotions it can evoke through sight, sound, and storytelling. That’s why they call it “premium content.” With that much power, it’s no wonder why advertisers are anxious to use TV in new ways. Speaking in terms of technology, we’re in the midst of an evolving TV ad landscape, and it’s exciting to think of where we’re headed.

James Shears
James Shears
VP of Advertising
James has spent his entire career in and around television. Previous to leading the addressable advertising business at Sorenson Media, he was the GM of Advanced TV for The Trade Desk. Before that, James led the addressable and programmatic teams at Dish Network, where he launched the world’s first impression-by-impression marketplace for linear addressable advertising. A proud native of Canada, James currently works in New York City.