How TV advertising can help you become top dog

TV today has more to offer than ever before, not least because this growing medium remains at the heart of popular culture and advertising effectiveness, through great content and expanding technologies. But not everyone - in particular those whose job it is to focus on the balance sheet - may appreciate the enormous benefits TV advertising can bring, both in the short-term and the long-term. Too often, marketing activity is looked upon as a cost rather than the business investment it is, and it’s fair to say that TV advertising is the most common target of this accusation. Short-term budget-cutting in the name of the bottom line can ruin longer-term profit and brand value.

A small book with the big numbers on TV

TV really can help you become top dog - as you may have seen in Thinkbox’s new TV ad featuring the talented rescue dog, Harvey - particularly when integrated with other media and marketing activity. This new handbook provides answers to the most common questions raised about TV advertising by its sceptics. This evidence, reproduced here, should help equip you with the ammunition you need to secure new or increased investment for this transforming component of your marketing mix.

1. What is ‘TV’?
2. How much TV are we watching?
3. Why is TV viewing growing?
4. How is TV proven to work?
5. When will I see the effects of TV advertising?
6. How accountable is TV advertising?
7. TV’s expensive isn’t it?
8. What is the impact of cutting TV advertising?
9. How much TV do young people watch?
10. How has the multi-channel era affected TV audiences?
11. Isn’t TV advertising declining as money moves online?
12. Is fast-forwarding through ads an issue?
13. How is TV embracing new technologies?

1. What is ‘TV’?

Top

This sounds like an odd question with an obvious answer but you’d be surprised how many people don’t quite know the answer. The trouble is that some people don’t realise that TV has a much wider existence than the programmes you watch on the set in your living room or bedroom. The best explanation is to say that TV, television and telly are the default words that people use for professionally made, immersive, audio-visual content – whether viewed on a TV set, on a mobile or on a computer screen.

It’s best to try and avoid confusing TV with ‘video’, which consumers tend to use when they mean either amateur, user generated audio-visual content or chunks of very short-form audio-visual content (like a music video). All TV is a form of video, but not all video is TV.

2. How much TV are we watching?

Top

According to figures from the Broadcasters’ Audience Research Board (BARB), the average TV viewer watched 28 hours, 15 minutes of linear TV a week in 2010, the first time the daily average has broken through the 4 hour mark since records began. This was an increase of 2 hours, 4 minutes a week on 2009.

Commercial TV channels (i.e. non-BBC channels) accounted for 63% of linear TV viewing. During 2010, the average person watched 17 hours, 41 minutes of linear, commercial TV a week, an increase of 1 hour, 4 minutes a week on 2009. In the last ten years, commercial TV viewing alone has increased by 1 hour, 41 minutes a week.

These figures do not include TV viewed on devices other than TV sets (laptops, smartphones, tablets etc.). BARB does not currently measure this additional viewing as part of its normal standards, but has been separately monitoring viewing on devices other than TV sets mostly via the web since 2005. Its data suggests that there is an additional 1% of TV viewing via other devices, 2% for 16-24 year olds.

But let’s not get greedy. We think that these record figures probably represent the peak for linear TV viewing; it is unrealistic to expect linear viewing to continue to grow indefinitely. Also, with digital switchover approaching completion in 2012 one of the fuels for the recent growth in viewing will disappear. Longer-term, on-demand is coming to the TV set and when everyone has on-demand TV fully integrated into their TV sets, it is reasonable to think it may impact on linear viewing. That will lead to more TV viewing overall and the desire to watch TV live won’t diminish, but more of it is likely to be on-demand.

3. Why is TV viewing growing?

Top

Reasons why linear TV has been growing include:

• Choice: greater choice of TV to watch as more households switch to digital TV (93.2%, according to Ofcom Digital Progress Report Q1 2011);
• Technology: New TV technologies (such as digital TV recorders) enhance the TV experience and magnetise viewers to TV sets;
• Consolidation of viewing: on-demand TV services send people back to the broadcast schedules. 89% of people watch on-demand TV mainly to catch- or keep-up with missed broadcast TV (source: Decipher/Thinkbox);
• Social TV: viewers are making ‘live’ TV viewing even more must see by sharing real time opinion online via social media like Twitter and Facebook;
Quality: excellent TV programming and a wide variety of channels which cater for most tastes.

4. How is TV proven to work?

Top

Most of us intuitively know that the biggest, most famous and most successful brands are TV advertisers. But, there is also plenty of hard evidence showing that this is not just a coincidence.

There are several impartial research studies which prove that TV advertising is at the heart of the most effective advertising campaigns. The IPA, which is the body representing all types of ad agency in the UK, proved that campaigns which include TV are 35% more effective than those without TV at delivering large business effects, and that TV is more effective now than it was 20 years ago.

Furthermore, Pricewaterhouse-Coopers undertook a 10 year econometric analysis of over 700 brands in 7 markets and found that, on average, a £1m increase in TV investment yields a £4.5m increase in sales, the highest ROI of any medium.

And the UK’s Direct Marketing Association (DMA) found that when TV is added to other response-gathering media it improves their performance dramatically; print response rises by 92%, Direct Mail by 96% and, most impressive of all, online responses increased by 164%. Google supports this finding and says that TV advertising’s effect on search is instant and very visible.

Click here to see the supporting evidence

5. When will I see the effects of TV advertising?

Top

TV does work immediately – but it also works over the long-term, delivering a double benefit. A recent Thinkbox study with MediaCom, looking at the influence of TV on short-term response, found that 43% of all campaign-driven responses across a broad group of their clients were generated by TV, way ahead of the investment share on TV. Furthermore, they found that the web is now the response channel for TV ads, having overtaken phone a couple of years ago; this fact is also responsible for a great deal of misattribution of TV’s effect on other media.

TV works and it works fast. This immediacy has always been the case but, thanks to the spread of the internet, acting on TV ads is easier than ever and we can now see TV’s immediate effect in real time as it unfolds online.

All TV ads are now response ads – even those that don’t set out to be. Thinkbox’s joint research with the Internet Advertising Bureau (IAB) found that, as a result of seeing a TV ad, 57% of people agreed they have conducted an online search; 36% agreed that they have visited a brand’s website to find out more because of a TV ad; 28% had searched the net to find out where to buy the brand; and 21% had purchased online.

Effectively, the take-up of home broadband and increasing laptop ownership has brought the High Street into the living room and made TV a point of sale medium.

Click here to see the supporting evidence

6. How accountable is TV advertising?

Top

TV viewing is measured by the most rigorous media research contract in the world. BARB (Broadcasters’ Audience Research Board) measures viewing on a minute by minute basis, for every individual separately (both geographically and demographically represented by 5,100 households and 11,400 individuals). If anything, BARB under-records how much TV is watched because it only measures in-home viewing to TV sets; they estimate that total TV viewing is about 6% higher than their published numbers show.

Time-shifted viewing is only included up to seven days following transmission; about 25% of time-shifted viewing occurs after that but is not counted and is therefore free. Fast-forwarded ads are also not included in BARB numbers and hence are also free, though they do have value.

However, the accountability that reallymatters is TV’s effect on a brand’s business. Because TV doesn’t have a return path (yet), it’s importantthat advertisers employ rigorous econometric analysis to understand the contribution that all their marketing makes rather than just using superficial response analysis, like the number of Google searches.

TV advertising makes things happen – and instantly. Online search metrics show us the instant spike in search that TV ads produce. But very often TV doesn’t get the credit for the effect it generates. TV ads work best with other media, partly because they capture the response generated by TV advertising. The response might come via a print ad with a unique phone number, a direct mail shot with a coupon or, increasingly, a whole range of online marketing techniques: search, emails and clickable online display. The problem with this is that responses are often attributed to the wrong medium, the capturing medium rather than the generating medium. People are confusing cause and effect, and accountability with ‘countability’.

Click here to see the supporting evidence

7. TV’s expensive isn’t it?

Top

There are several elements to this statement. The cost of reaching someone, or the cost per thousand (CPT), of linear TV advertising is no more expensive than most major media, and less than some. Because TV reaches more people more quickly than other media it is easy to justify spending more on it, because it delivers back viewers to your ads.

The cost of making a TV commercial can also seem high, though there are many examples of excellent and effective creative executions that cost tens of thousands of pounds rather than hundreds of thousands. However we now have proof that creatively awarded campaigns are 11 times more efficient at growing market share so the cost may well be more than justified by the return.

But both of the above factors should be considered in the context of the payback from TV advertising. It would be a mistake to confuse both cost and value. Because of TV’s excellent longterm ROI, TV is in fact the best value marketing investment you can make, delivering increased sales, market share, profitability and brand equity.

Click here to see the supporting evidence

8. What is the impact of cutting TV advertising?

Top

This is a high risk strategy. It may help the bottom line in the short-term but it will most probably severely damage it in the long-term. Our work with Data2Decisions showed that cutting your TV spend in half will then take you two years to recover the lost market share. Cutting TV advertising out altogether for a year will take four years to recover.

Companies that want to recover their market share within a year after a recession will need to spend 60% more on their advertising than the amount they actually saved by cutting it out in the first place.

Brands that continue to spend while competitors respond to recession with budget cuts are in the happy position of building market share at lower cost and their money goes further.

Click here to see the supporting evidence

9. How much TV do young people watch?

Top

We shouldn’t confuse life-stage behaviour with long-term trends and it is unwise to use a sample of one. Young people’s linear TV viewing has actually increased slightly over the last five years. But kids have always watched around an hour less TV a day than their parents; but this drop is reversed when they become adults.

So young people would be accurately called light TV viewers; however TV is still the medium they spend most time with. To put this in perspective, according to the latest findings from IPA Touchpoints 3 – the only singlesource research that compares all media usage using the same methodology – 15-24s spend the biggest chunk of their media time, at 42%, watching live TV; when you add in watching TV online, which is most popular among young people, TV’s share of their media day rises to 44%.

And it’s not all about time. TV is by far the most influential advertising medium for young people. Recent research by YouGov for Deloitte shows that TV advertising is more impactful than any other form of advertising, and even more so for young people.

In addition to watching TV online, young people are also the most enthusiastic 2-screeners ie watching TV with an internet enabled device to hand. This allows them to comment on TV programmes and ads as they view them, to create social media fangroups, to share their enthusiasm for TV online – and to buy products instantly too.

Click here to see the supporting evidence

10. How has the multi-channel era affected TV audiences?

Top

Commercial TV reaches over 70% of people in one day, 92% within a week, and 98% within a month. No other medium has such immense reach and it is TV’s ability to deliver this scale, and so rapidly, that is central to its impact.

The growth of multi-channel digital broadcast platforms has delivered massive choice to viewers. There are now commercial channels and programmes to suit any taste or interest. Greater channel choice inevitably means that audiences are more spread out than before, but this is a benefit to advertisers and is better deemed segmentation than fragmentation. Alongside TV’s ability to reach the majority of the UK overnight, it can now also reach very specific, niche, highly targeted groups who have chosen to watch specific channels – as well as targeting regionally, as it always has done. Multi-channel viewing has meant that TV advertising can be more accurate and cost effective. TV’s expansion is providing greater flexibility, choice and control for advertisers.

It should also mean that people are enjoying what they watch more. If a programme that used to have 10 million viewers 10 years ago now has 8 million, with the other 2 million watching a variety of other TV shows, you know 2 things: the 8 million are watching the big TV show because they really want to and not because there is no other choice and the other 2 million have found something that suits them better. That’s good for everyone.

Of course big TV events remain hugely important culturally, whether that’s an election debate, an entertainment show or major sport. They give us all something to share and talk about together, on the sofa or online.

Click here to see the supporting evidence

11. Isn’t TV advertising declining as money moves online?

Top

TV is not declining in any meaningful sense – not the viewing of TV, the viewing of TV ads, the effectiveness of TV ads, TV’s share of advertising, nor absolute revenue, which is growing now the recession is over. And online TV revenue is the fastest growing sector within online display.

The range of online advertising opportunities is growing and important but they are not a replacement for TV as the two do very different and, importantly, very complementary jobs. They are growing together. This is exemplified by how much online brands invest in TV advertising (over 70% of their investment) and how many new online brands are launched using TV.

Research from a joint study with the IAB has shown that combining TV and online advertising delivers up to a 50% increase in positive brand perception, as well as a significant increase in likelihood of purchase.

Click here to see the supporting evidence

12. Is fast-forwarding through ads an issue?

Top

Even though TV advertising is the most enjoyed and acceptable form of advertising, even we wouldn’t pretend that people watch TV to see the ads. Viewing dips at ad breaks (all picked up accurately by BARB) and if the 40%+ of us who have digital recorders are watching time-shifted programmes we all skip ads some of the time.

But these are the important numbers to remember. Of all the TV watched in the UK, 93% is viewed live, so only 7% of ads are even capable of being skipped. In fact we are watching more TV ads – at normal speed – than ever: some 2.5 billion a day, 41% higher than in 1999.

In homes with digital television recorders (DTRs) like Sky+ or Freeview+ about 13% of viewing is time-shifted. But according to the data from Sky homes, this technology encourages people to watch 17% more TV at normal speed and so any ads lost are more than compensated for. Remember fast-forwarded ads are not counted by BARB so are free, but they have been proved to have real value with about 65% of the levels of recall that you would expect from an ad at normal speed, as long as the ad had already been viewed. Given the fixed attention needed when fast-forwarding this is not surprising.

What DTRs do prove yet again is the value of great creativity, with favourite ads being rewound and watched again. Panic about ad-skipping is unnecessary but the greater emphasis it has given to producing engaging advertising is a happy outcome. And it has also boosted the value of TV sponsorship which acts as a welcome form of ‘punctuation’ to viewers.

Click here to see the supporting evidence

13. How is TV embracing new technologies?

Top

Live TV has been liberated by new technologies. Sales of flatscreen HD TVs are soaring and average screen width increases by approximately an inch every year as consumers continue to invest in technology and more sophisticated forms of home entertainment. Both the quality and quantity of TV viewing is bring driven by technology.

Additional distribution technologies have extended TV’s accessibility and desirability; Broadband is TV’s latest way to deliver TV live or on-demand, allowing easy catch-up with missed TV. Then there’s the device we actually watch TV on; anything with a screen is now a way to watch TV whether you carry a laptop, tablet or mobile. TV is a multi-platform, technology-neutral content-led industry.

New technologies also make it even easier to respond to TV ads. Firstly, the growing phenomenon of multitasking is one to be excited about. When people watch TV with a phone or a laptop nearby they can respond instantly to ads, researching products and even buying them before the end of the ad break. And then the development of broadband-enabled TV sets means that TV will have its own return path at last. Viewers won’t need to go via a search doorway to a brand’s website; they will just need to click on a TV ad.

TV technologies are improving and expanding rapidly and as a result they are magnetising viewing to the living room. The improved viewer experience plus greater choice and control alongside new technologies like HD and 3D is enhancing the quality of the broadcast experience.

Click here to see the supporting evidence

It also showed that TV is the most significant driver of revenues across a wide range of products and that TV delivers its value over a much longer time frame than other media. They found that TV campaigns were still working at about 80% of the initial level in the year following their broadcast. This effect is often overlooked, and is one of the reasons why TV’s payback is often underestimated.

And the UK’s Direct Marketing Association (DMA) found that when TV is added to other response-gathering media it improves their performance dramatically; print response rises by 92%, Direct Mail by 96% and, most impressive of all, online responses increased by 164%. Google supports this finding and says that TV advertising’s effect on search is instant and very visible.

Click here to see the supporting evidence