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TV Screen Still Most Valuable for Advertisers

Television advertising is the most powerful medium for advertisers to drive consumer purchases, according to the recently released Purchase Funnel 2017 study.

According to the report, television advertising is the most important influencer, from initiating awareness of a product or service all the way through the purchase decision-making process, to the actual purchase. Interestingly, this holds true across age groups, including hard-to-reach, cord-cutting millennials.

The study was commissioned by the Television Bureau of Advertising, the trade association for local broadcast TV stations, but conducted by the GfK AG research firm. It covered six categories (automotive, banking services, furniture, bedding/carpet, legal, medical and QSR/casual dining) and 20 different media across five phases of the "purchase funnel," i.e., awareness, interest, visit, consideration and purchase.

It was based on an opt-in panel of 3,000 US respondents aged 18 years or older who were exploring the purchase of each of these products and had been exposed to advertising across different media. Forty-six percent of consumers picked TV as having the "strongest influence on their decision," with just 3% picking social media.

Almost two thirds (62%) of respondents selected TV as "the strongest driver of their awareness about a product/service" while 65% said that TV advertising influenced their social media searches.

That helps explain why the upfront advertising market this year went so well, despite falling ratings and pay-TV cord-cutting. Upfront ad sales totaled $19.7 billion in 2017, up 5.9% over 2016, according to researcher Media Dynamics. That's a new record, exceeding the previous high of $19.2 billion set in 2013.

The key to the TV's advertising effectiveness is apparently related to the lean-back experience offered by it. A study conducted last year by Hulu & Kantar Millward Brown -- and quoted in a recent study from FreeWheel -- found that "exposure to the ad message in a living room setting produced the highest lift for aided awareness and brand favorability compared to exposure on desktop and mobile."

The report, entitled The Promise of OTT, is from FreeWheel Media Inc. , a digital advertising management company owned by Comcast, and is focused on advertising in online streaming services. It found that video streams to OTT devices such as Apple TV, Roku and Amazon Fire (which display the video on the TV screen) were the most likely to be viewed.

In fact, 98% of viewers of advertising on OTT devices viewed the ad completely. Other digital devices were also very effective with tablet viewers completing 91% of ads viewed, smartphone viewers completing 86% and desktop viewers completing 84% -- but OTT devices were the highest.

FreeWheel also found that viewers of streaming video on OTT devices were more likely to be younger and more affluent than the average TV viewer, and therefore more attractive to advertisers. Based on their analysis of Nielsen data, FreeWheel found that the median age for OTT viewers was 31, while the average for traditional television was 54. Their median annual household income was also about $10,000 higher. And FreeWheel found that these platforms are well suited to reaching the elusive millennial demographic, with 75% of ads reaching viewers between 18 and 49, and 56% driven by those between 18 and 34.

FreeWheel noted that ratings for prime-time TV viewing have dropped 24% between May 2013 and May 2017. But viewing of video during prime-time on OTT devices has grown steadily, supplementing live TV viewing. As such, advertisers can use advertising on OTT services to make up for lost viewers on live TV channels without losing out on the ad effectiveness of the medium.

As with any transition, it's increasingly difficult to identify and isolate trends in the digital video landscape. Behaviors are changing for sure, and there is a clear shift towards online streaming and away from traditional broadcast and pay-TV platforms. But it's also apparent that viewers of all ages are still viewing TV, and the TV screen offers some benefits to advertisers that other media are still not able to match. For content owners the best strategy is to try to deliver across screens and reach consumers wherever they can, while still maintaining their presence on linear TV.

— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation

Phil_Britt 8/2/2017 | 10:17:54 AM
Not a Surprise Televidion is "stickier" than other media. Impressions from social media, just like the messages on Facebook, Instagram, etc., quickly fall into the back of one's memory. But television ads stick there for a long time, like Apple's 1984 ad with the "olympian."
danielcawrey 8/2/2017 | 1:05:39 PM
Re: Not a Surprise Television advertising is still effective because for the most part, people still have to watch through them. With Youtube and other video ads, consumers are often able to only watch snippet or even skip through. I would argue that was a bad precedent to set for web content. 
kq4ym 8/10/2017 | 12:04:41 PM
Re: Not a Surprise Although I'm sometimes skeptical of the numbers in the surveys claiming this and that, TV has traditionally been the best value for most ad buyers due to the numbers of eyeballs and the lower per eyeball cost to an advertiser compared to other media. Whether that may change slowly over the years remains to be seen as competition for ad buyers gets more robust.
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