Digital Ad Spend Shifting Back to TV

Digital ad spend shifting to TV

Ad dollars are a limited resource in very high demand. For ages, TV comfortably controlled the market. Then digital advertising arrived. The first banner ad went up in 1994 on HotWired. And the banner ads never came down. Digital soared over the next 22 years. In 2016 digital claimed a total of–hold your breath–$72.5 billion. Last year total TV ad spend was $71.3 billion–the first time TV has fallen behind digital.

Don’t unpack your digital bags yet, though. The industry has taken a step back this year and is realizing digital might not be as invincible as we made it out to be.

Here’s a roundup of some of the recent industry voices on the subject:

Big brands trust TV over digital

“Some of the world’s biggest advertising spenders are fed up with the digital supply chain and are yanking digital dollars from ad campaigns to put them towards TV,” writes Lazaro Gamio in an Axios article.

Gamio shares highlights from an interview with the chief brand officer of Procter and Gamble (the largest ad spender in the world) Marc Pritchard in his piece titled, “Retro alert: The ad spenders ditching digital for TV, radio.”

From Axios:

Marc Pritchard … tells Axios that some of his biggest brands, like Tide laundry detergent, have seen better performance results in market tests on TV than digital. “The major issues in digital is that the supply chain still has way too many touch points in it and it lacks transparency,” says Pritchard.

Digital companies give ad spend to TV instead of using their own digital platforms

The irony is thick here. Some of the biggest digital ad sellers turn to TV when they really want to get widespread attention. Michelle Clancy of Rapid TV News argued this point in her article, “TV ad spending translates to big digital benefits.”

Citing a VAB report, Clancy points out that the five largest tech disruptor companies, i.e., Facebook, Amazon, Apple, Netflix, and Google, collectively spent nearly $1.4 billion on TV advertising in 2016.

“For brand-expanding public companies like these, the report found that revenues spiked after they launched a TV campaign or sharply increased TV spending,” Clancy writes.

Check out the whole VAB report.

Why a digital brand would turn to TV

Why ad spend shifting to TV

To take this thread a little deeper, MediaPost columnist Jeri Smith explores the “why” of big digital corporations directing ad spend to TV in his article, “Why Tech Giants Like Google and Amazon Are Spending Big On TV Ads.”

What’s remarkable is that Google is one of the most prominent TV spenders. The company built on digital advertising seems to know something about TV advertising that other brands don’t: In many cases, there’s just no substitute for it. … This doesn’t mean digital can’t contribute, of course. It can work, but the environment is cluttered, and it’s easy to spend money in ways that don’t deliver.

According to Smith, TV can simply reach a mass market in ways digital cannot. It’s the key to engaging the upper marketing funnel.

“When you’re a tech company that needs to appeal more broadly than ever before, TV delivers higher ROI than any other medium,” Smith claims. “You can only make so much money on people who already know your brand. To reach everyone else, you need TV.”

Finding a realistic balance

Digital is not going to go away. It’s still an effective advertising platform and advertisers will continue to get results from it. But I think this post shows that the hype around digital is dying down a bit and advertisers are realizing that they can’t ignore the power of TV, especially as TV begins to offer addressable ad options at scale. At the end of the day, a good advertiser recognizes they can’t do without either TV or digital. The challenge, which deserves its own post another day, is finding the right balance between the two.

Brittany Sudlow
Brittany Sudlow
Demand Marketing Manager
Brittany has years of both marketing and sales experience. Her marketing experience has been focused on advertising, content, business development, and brand management. Outside of work, Brittany enjoys trying new food and watching football.