For years television advertising was considered the pinnacle of marketing. Companies that could afford television advertising found themselves gaining more traction than their competitors.
Many felt that the ultimate achievement in marketing was to buy a spot during the American Super Bowl final. Certainly, the 30-second slot (which costs $US5 million) enables you to reach over 100million viewers.
But Super Bowl viewing has reduced in each of the last three years. The 2018 match-up had the lowest ratings since 2009. And sports is one of many genres of traditional television that is losing its viewers.
There has been a huge exodus away from traditional television watching in recent years. Back in the 60s, there were 4 channels and a radio – Now there are thousands of channels, audiences are becoming less fragmented and companies are now paying far more to reach fewer people.
And this has led to a dramatic increase in digital ad spends. In fact, in 2017 digital advertising spending rose to $209 billion globally, whereas TV ad spending fell to $178billion globally. Influencer marketing spending, in particular, has been forecasted to grow to $10 billion by 2020, as a result of the changes in consumer habits, which will be outlined in the following article.
The Change in Television Viewing Patterns
The rise of streaming platforms and time-shifting technology has had a tremendous effect on viewing patterns. While sports fans may still keep their cable and satellite subscriptions, many people now prefer to watch uninterrupted programmes and movies on Netflix, Amazon Prime or on other streaming networks. Many consumers even prefer to spend their time on social media, which has led to the rise of influencer marketing as a formidable marketing strategy.
It is hard to tell just how significant an effect streaming has because the streaming networks don’t release their download statistics, but the effects are noticeable on the traditional television networks.
One “rough” comparison we can make is comparing Amazon Prime’s The Grand Tour with BBC’s Top Gear. There are some comparative figures from 2017 that are available because of the rivalry between the two programs. Episode 1 of Series 24 from Top Gear received 2.8 million overnight viewers. As is the norm, viewing numbers fell for subsequent episodes.
Although there are no official statistics for The Grand Tour, research company GfK reported that 2.3 million people streamed the first episode between its release (on 18th November 2016) and December 31st, 2016.
Although these two figures are not strictly comparable, they do make it clear that a considerable number of people chose to download The Grand Tour – many of whom probably did not watch the traditional free-to-air broadcast of Top Gear.
Brands are beginning to notice the definite shift in peoples’ viewing habits, as people make a move from traditional television to digital.
Even Traditional Networks Acknowledge the Change in Viewing Habits
Let’s be honest. Most of us still watch television programmes at times. But far fewer of us watch them at the time they are broadcasted.
From an advertiser’s point of view that is important. People tend to bare their teeth and accept ads during live broadcasts. When they delay their watching, however, they often fast forward through commercials, bypassing them.
Traditional networks have tried to change to meet the change in viewing habits. They have added +1 stations along with online options to remain relevant and keep an audience engaged. Many companies have also changed the types of ads they make.
Notable Statistics About UK Viewing Habits in 2017
Thinkbox recently assembled their Thinkbox TV Viewing Report 2017. Thinkbox is the marketing body for commercial TV in the UK, so they naturally want to promote television advertising. However, their report contains some eye-opening statistics relating to how our television viewing habits have changed. Although Thinkbox disagrees with the notion that traditional television advertising is dying, we definitely have changed the way we watch traditional television.
They observed that 74% of people have access to a TV recorder now (compared with 18% in 2007). Although it wasn’t mentioned in the report, you would assume that this figure would have been higher in the heyday of VHS.
73% have access to Broadcaster Video-on-Demand (BVoD) – and this figure is multiplying quickly. There was no BVoD in 2007, and only 30% of people had access to it in 2012.
According to their 2017 findings, people still watch 3 hours 49 minutes on average per day on a TV set. However, there is a significant difference between adults who watch 3 hours 49 minutes, 16-34 year-olds who watch 2 hours and 7 minutes and children who watch only 1 hour 29 minutes on average per day of broadcast content. In all cases, these numbers have dropped over the years, but at a higher rate for the younger audiences.
On average, people spend 56.4% of their viewing time watching live TV. They spread the rest of their time across playback TV, broadcaster VOD, and the vast variety of other types of video. YouTube accounts take up 9.1% of adult’s watching time. Again, figures are different for younger viewers, though. 16-34 year-olds only spend 33.1% of their viewing day watching live TV, and they spend 22.1% of their time browsing YouTube.
Streamers Rarely Divulge Their Statistics
One problem we encounter when trying to build the big picture of the modern television environment is that the major streaming companies don’t disclose their viewing figures.
Nielson tried to build a method to “best guess” Netflix viewing numbers, although Netflix says the Nielson figures are wrong.
Netflix has disclosed viewing figures for a few Netflix Original shows. House of Cards and Fuller House both averaged about 4.6 million viewers each in the USA. While these numbers are small, compared to traditional television audiences, they still indicate a sizeable number of people opting to stream without ads. And it must be remembered that viewers have a whole library of programmes to choose from when deciding what to stream. At any moment in time, Netflix viewers, for instance, browse between different programmes and movies. Traditional TV viewers are restricted by the programming offered on a finite number of channels.
Will Smith’s movie, Bright, was reportedly watched 11 million times in the days leading to Christmas 2017. Netflix also released viewing figures for the premiere of Stranger Things Series Two. 15 million people watched the first episode in its first week online.
This lack of transparency makes it difficult to determine just how much people opt to stream TV over watching traditional television. Anecdotally, quite a few viewers opt for ad free-streaming over traditional reality television, and this must become more common as people replace their television sets with Smart TVs with Netflix and other streaming services built-in.
Are Traditional 30-Second Ads Still Relevant Today?
While Fox, CBS and NBC may be able to charge $5 million for a 30-second Super Bowl ad slot, the format is slowly becoming less relevant. The Financial Times reported in October 2017 that “the 30-second television ad has been dethroned”.
They observed that the modern consumer no longer has the viewing span for a 30-second commercial. Hence 30-second ads now account for less than half of US TV commercials. This compares to 2014 when 61% of all TV ads were of the 30-second variety.
In fact, by 2017 36% of all US TV ads lasted 15 seconds, and 5% played for just 10 seconds.
YouTube has even noticed the decline of the 30-second ad. It removed the option of placing an unskippable 30-second pre-roll ad at the start of YouTube videos. Brands can’t just place their traditional TV ads at the beginning of their online YouTube content.
However, YouTube is happy for people to place 6-second unskippable ads on the front of videos. 21st Century Fox’s Fox Networks Group is rolling out the same 6-second format on their traditional television networks and digital platforms.
Influencer Marketing – The Perfect Solution
Now, all these findings suggest that consumers don’t want to watch adverts of this sort anymore. Platforms are becoming more aware of it and brands are becoming more aware of it. They’re reducing the length of their ads, in order to keep their audience’s happy. What makes influencer marketing more appeal to brands, is the fact that influencers are able to easily introduce brands to consumers in a more authentic, less-forced way that translates into conversions.
Influencer marketing allows brands to still reach their desired target audience on a mass-scale, the audiences are more targeted and the results are a lot more measurable than traditional television advertising. And this explains why more and more brands are turning towards influencer marketing.
Television Advertising Needs to Better Market Itself
Ironically for an industry focused on selling as many goods as possible, traditional television advertising struggles to market its own sustainability. As we have seen, traditional television and the advertising that goes with it is not entirely dead yet. Down yes, possibly irrelevant to younger viewers, definitely, but not dead!
Yet television networks and advertisers seem to struggle to get their message across. Much is written about the potential death of television advertising. There are a lot fewer marketers (such as the people at Thinkbox), who try to argue that television advertising still has an integral place as part of the marketing mix.
Yet, as much as we love influencer marketing, and can see how it works for most brands that attempt it, we can still see that traditional television advertising still works for specific target markets. Why else would brands happily fork out $5 million for a Super Bowl slot?
Video Watching by the Younger Generation
As much as the television networks like to push the fact that their business model is not yet terminal, there are still problems with regards to Generation Z. Our youngest generations just do not like traditional television.
Thinkbox may have tried to de-emphasise the viewing habits of children and teenagers, but it is clear. They spend substantially less of their time watching traditional TV, both live and delayed than any of their predecessor generations.
An incredible 1,325,000,000 people use YouTube, and they watch 5 billion videos on the platform every day.
35% of YouTubers are aged 18-34. YouTube reaches more 18-34 year-olds (and indeed 18-49 year-olds) than any US cable network. In an average month, 80% of all 18-49 year-olds watch YouTube.
comScore and YouTube surveyed 2,940 YouTube fans in 2016 about their video engagement. Unsurprisingly the group was skewed in favour of Generation Z. They were asked about their viewing habits.
comScore asked them to name their preferred video provider – 35% stated YouTube, compared to 19% who opted for traditional TV.
The Millennials surveyed stated a preference for binge-watching. 37% claim to binge-watch daily, compared to just 14% of “old” people, aged over 35.
One very notable trend was that the Millennials surveyed stated a preference to watch videos uploaded by people – rather than those uploaded by brands, companies or institutions. This gives a good indication of how vital influencers are for spreading a brand’s message to any younger target market. There is little point in a brand merely uploading their television ads, even short 6-second ones, to YouTube. Original content uploaded by influencers will be far more effective.
Why is influencer marketing effective with a cynical generation? We recently looked at the Psychology Behind Marketing with Influencers, which explains how influencer marketing is so powerful.
So, is Traditional Television Dying or is the Traditional Audience Changing?
Several things are clear from the statistics:
- Overall, fewer people are watching traditional television live.
- Although they are increasingly moving towards digital, older generations, who grew up watching traditional television, still tend to do so. They have changed their behaviour to some extent, for instance watching +1 channels, watching Pay TV, and recording programmes to playback later.
- Generations X and Y have changed their viewing habits to a greater degree than Baby Boomers. They watch television over a broader range of devices. They spend most of their time on YouTube, Instagram and other social platforms. However, they still spend a lot of their video-viewing time in front of a television, either watching it live or delayed.
- Millenials / Generation Z have developed entirely different viewing habits from their parents and grandparents. They spend much of their time selecting their own viewing experiences. Their biggest celebrities come from YouTube, Instagram, Musical.ly and the other online platforms. They still watch some broadcast TV, but substantially less than their elders.
So, businesses looking at the effectiveness of television advertising need to think carefully about their target audience. There is still some value in creating television advertisements if you are targeting traditional older people. If on the other hand, your target market is more youthful, you really need to think about how you can best reach them. Generation Z, in particular, has little time for traditional television advertising. They consider watching ads on television as old-fashioned and want more control over their viewership.
Michel Wedd, a professor at the University of Maryland’s business school, summarises the new world of television advertising well. He told The Financial Times, “People are not passive consumers of advertising. They determine whether this is relevant to them and whether they are willing to process it or not.” Brands need to think about this carefully before they decide to spend millions on their next 30-second TV commercial.
Television adverts may still have their place, but their targeting capabilities, their effectivity, and their measurability are clearly not comparable to influencer marketing.