“On TV And Video” is a column exploring opportunities and challenges in programmatic TV and video.
Today’s column is written by Matt Nitzberg, chief growth officer at ThinkVine.
For the first time outside a recession, traditional television ad sales are expected to decline this year, according to the Interpublic Group’s Magna Global. In the US, digital will overtake TV as the top advertising category in 2016, with almost $68 billion in sales compared to $66 billion for TV.
This trend marks a major turning point for advertisers that has been years in the making. TV ad spending is going down as consumers opt to watch streaming video and other digitized replacements for linear TV. Unless advertisers change their approach to digital media buying, the move to digital TV will put many high-impact branding opportunities on their media plans at risk.
The rise of display advertising over traditional print 10 years ago was a missed opportunity for advertisers. Unlike magazine ads, digital display advertising started as a highly measurable advertising channel, which enticed “performance” advertisers before brand advertisers.
As advertisers prepare to spend more of their budgets on new forms of video, they must remember to spend for maximum impact like they do on TV. If, instead, they focus on maximum savings or reach as with display advertising, video advertising will follow the same unfortunate path as display.
Focus On Top-Of-Funnel Metrics
The combination of low prices and high measurability often leads brand advertisers to allocate too much to inexpensive digital channels, which only encourages publishers to create more low-priced inventory.
As more TV goes digital, there is a risk that this trend could actually accelerate. Imagine a media planner looking at the low price and “engagement” metrics of a so-so digital video spot compared to the high price and relative lack of metrics of a high-quality linear TV spot. With price and some metrics (apparently) favorable in the short term, the digital video spot and more like it will get a larger share of media spending.
If no one is thinking about how that digital spot could create a better brand impact, a large share of the media plan could end up on low-quality digital video that might be relatively inexpensive, but not very effective for brand goals.
Demand High-Impact Opportunities, But Be Prepared To Pay
Once the right goals are in place, brand advertisers can focus on the right types of digital TV to buy, and should be willing to pay higher prices for higher impact.
The easiest place for brand advertisers to start improving the brand impact of digital video is with clutter. Brands should demand uncluttered video experiences for their viewers, but they will have to adjust their price up accordingly.
One benefit of digital video and other forms of addressable TV is that advertisers can target specific audiences with more relevant messages. This is great if the actual experience is high-quality and captivating, but good targeting can’t make up for poor experiences.
On addressable TV, targeting a specific audience is actually more expensive than standard rates because the price includes a high-impact placement with targeting. On digital, targeting is often done on inexpensive channels, such as RTB exchanges, and media buyers are biased to seek low prices. Brands should consider a default to the combination of high-impact and targeted ads which would be more expensive, but also more effective.
Fragmented digital video doesn’t directly replace branding opportunities like the Oscars, the Super Bowl or even prime-time TV, which are already losing their luster as consumers scatter across video channels. Advertisers must work with media companies to create broad advertising messaging opportunities across channels that can achieve scale.
In China, many online ads are bought for a certain time of day across channels. This practice more closely mirrors TV advertising and could be an important tool in the advertiser’s toolbox as they look to brand on digital video.
As viewers continue to go digital, advertisers should dictate the advertising experience that they can buy from their publisher partners. Advertisers must optimize for brand impact rather than for cost savings as TV goes digital now, or lose the opportunity in the future.
Follow ThinkVine (@ThinkVine) and AdExchanger (@adexchanger) on Twitter.
