Digital is overtaking television, with Magna Global estimating that the relatively young medium will surpass the standard in ad spend by the end of 2017 – making this an interesting time to look at where the two channels are, where they’re going, and what they can learn from each other.
TV advertising, as we all know, has been around forever (or at least since 1941, when a 10-second Bulova watch ad aired during a Brooklyn Dodgers broadcast), and for much of that time, it was the gold standard for reaching people when and where they were paying attention. After all, it was the only game in town if you wanted to reach a particular demographic with broad reach and scale. Then, in 1994, digital advertising came around (starting with a banner ad on Wired.com), and the rest, as they say, is history. Within a scant 23 years, digital advertising is poised to overtake TV, a channel that’s been around for more than 3 times as long.
So why is digital overtaking television? Well, digital has many advantages that TV does not – inexpensive production cost, PPC means that advertisers only pay for results, campaigns can be optimized based on results, flexible budget controls, better targeting capabilities etc. mean that advertisers, particularly those with limited budget, can more effectively measure their ROI. With TV, on the other hand, buys are made based on the gross rating point (GRP) methodology, where advertisers target a specific audience with an intended frequency. This works for large advertisers and large audience segments who use statistical analysis of sales, but it’s not a feasible model of attribution for many smaller advertisers.
Another factor in the shifting spend from TV to Digital has been the shift in time spent in front of a traditional TV to computer and phone screens. That has allowed marketers to segment audiences in a way that hasn’t been possible with TV, and to reach those segments in channels where they’re truly engaged – like email. There’s also the fact that the world of television is becoming increasingly fragmented, with cord cutting, OTT services, and digital video all chipping steadily away at the foundation of traditional television.
But that’s not to say that there’s nothing that the world of digital can learn from the world of TV media buying. As Eric Berry explained in a recent AdExchanger piece, Digital attribution isn’t perfect, and a focus on reach and frequency over a target audience with assured viewability instead of only focusing on ROI metrics can create a massive digital opportunity, taking spend that would otherwise be spent on TV. In turn, there is headway being made in the realm of programmatic video and TV buying, a methodology pioneered by digital display. As more an more traditional TV players move to streaming models, the framework and implementation of programmatic buys becomes more workable.
For now, as Eric Berry of TripleLift explained in a recent AdExchanger piece, the difference ‘between media buying strategies for Digital and TV are often so large that one might be excused for forgetting that both are simply attempts to advertise effectively for a brand.’
As we move towards a new paradigm of a digital-first advertising world, however, and as technology continues to improve for both, the gap between strategies in media buying for TV and Digital will decrease, allowing for a world of more effective cross-channel marketing, one where watch commercials can live in harmony alongside display ads.