The term, traditional advertising, has only recently entered media industry vocabulary. We use it today to describe advertising on linear TV, but for decades linear TV advertising was the only TV advertising available. There was nothing traditional or non-traditional about it. It was your only choice of TV advertising, period.
This kind of advertising is a very straight forward, predictable system. Media buyers know what rates they have to pay to reach different audience sizes, and ad spot lengths are standard. It’s become familiar and relatively risk free. But the last 10 years have brought a world of change to the TV and advertising industries. Consumer preference, influenced by advancing technology (and vice versa), has driven a decade of evolution in TV. The result is a diverse spread of TV viewing and advertising options. Each new option has been either more versatile, technologically advanced, or targeted than linear TV advertising. And as new methods continue to emerge, linear TV advertising further fits into its moniker, traditional TV advertising.
I need to clarify, though, that traditional does not always mean of lesser quality or value. Another post in our blog describes how linear TV advertising can meet some campaign goals better than any other medium. So when I say traditional, I mean long-established, familiar, and proven.
This post reviews some of the biggest recent changes—events and trends—that have ultimately aided in turning “linear TV advertising” into “traditional TV advertising.”
Shift to over the top (OTT) and subscription video on demand (SVoD)
Netflix, Hulu, Amazon, and others are new options that contain attractive differences when compared to linear TV. With OTT, viewers can watch the content they want, when and where they choose. And while the three previously mentioned companies might be some of the most recognizable names in the space, networks and broadcast content creators have also developed OTT solutions.
These companies provide viewing flexibility to consumers, but more importantly they’ve engineered their platforms to facilitate targeted advertising. Online streaming services can collect a wealth of viewer data that linear TV simply hasn’t been able to capture. This translates to better targeting for advertisers and more revenue per impression for content owners. This doesn’t mean linear TV is going away. It simply represents a more progressive form of TV advertising. On the other hand, it shows how technology and consumer preference are putting pressure on linear TV to innovate and find new ways (other than spot TV advertising) to attract advertisers and stay competitive.
Digital advertising losing face
TV ad dollars have increasingly gone to digital advertising in the past few years. And yes, the shift in budgets has impacted the broadcast industry. But it has also helped drive broadcasters to look for TV advertising solutions beyond linear spot ads. Stations and networks have partnered with other industry players to offer data-rich, targeted advertising (i.e., addressable advertising).
Another trend has simultaneously helped wipe off some of the glitter digital has donned, giving the TV industry a chance to draw attention to emerging advertising options. In recent months, the ad industry has caught digital advertising companies red handed in a number of credibility-challenging cases. Two of the most notable examples this year were issues involving ads served to bots and ads shown in conjunction with inappropriate content. Big brands like P&G and Coca-Cola have vowed to cut back their spending on digital and transfer it back to TV.
A Marketing Week article quoted P&G’s CFO, Jon Moeller on the subject:
“Clearly we don’t need to be spending money that is seen by a bot and not a person. Clearly we don’t need to be spending money on ads that are placed in inappropriate places, and that’s why you see a significant reduction [in digital ad budget].”
The combined result of these digital trends is a TV industry with an increasingly diverse ad offering.
FCC ruling on large media mergers
One of the ways broadcasters are responding to the OTT and digital trends is by joining forces. Big news hit the stands in early November 2017 when the FCC loosened restrictions on media company mergers. Pending deals between Sinclair-Tribune and Disney-Fox came closer to completion with the ruling. This change in broadcast ownership rules marked the start of a new era in TV. And although some people fear the combining of these large organizations, the resulting scale will lead to advancements in TV advertising and thus make linear TV advertising seem even more traditional.
Addressable TV building momentum
The increasing success of addressable TV advertising is perhaps the biggest reason we now call linear TV advertising traditional TV advertising. Addressable TV is the TV industry’s response to OTT and digital competitors, and the rate of its adoption hinges, in part, on media companies’ cooperation, like the pending mergers mentioned before.
The addressable landscape is still in its infancy but it’s growing. Addressable TV is gaining undeniable momentum, evidenced by the recent need to distinguish between it and “traditional TV advertising.”