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Solar panels and wind turbines tower over a grassy landscape: the power of advertising on broadcast TV

Why Advertising on Broadcast TV Is Still Powering Your ROI

June 22nd, 2017   ||    by Todd Wasserman   ||    No Comments

Advertising on broadcast TV has received a lot of criticism recently from digital marketers who are convinced the medium is about to topple. And every year, the upfronts—an event that lasts from spring to summer where marketers purchase media time against upcoming fall programming—prompt another round of hand-wringing about cord-cutting viewers, the rise of digital media, and other supposed harbingers of broadcast TV’s demise.

But the numbers tell a different story. Although digital media is catching up, broadcast TV doesn’t seem to be going anywhere. Many advertisers, realizing that broadcast TV is still a successful media, are doubling down on their broadcast buys.

A Solid Bet for Advertisers

Now, there’s no doubt that digital continues to take a bigger slice of the global advertising pie. But that pie is growing at a compound annual growth rate of 5.8 percent from 2016 to 2020, according to a 2016 Technavio report cited in PR Newswire. While TV’s share of the U.S. market is predicted to drop from 39.1 percent in 2014 to 32.9 percent in 2020, according to a 2016 forecast by eMarketer, revenues for TV advertising will continue to climb—going from $72.01 billion in 2014 to $77.17 billion in 2020.

There are several reasons why TV continues to be a solid bet for advertisers. As The New York Times reported in May 2017, media buyers believe that TV still reaches the most people of any medium—and on a full screen with sound. Compared to the web, TV ad inventory is limited and prices spike if you don’t secure buys ahead of time, which is why the upfronts show no sign of abating anytime soon.

TV Proves Its Worth

Marketers who continue to advertise on TV do so because they believe TV ads drive other forms of media, like social. A 2016 Accenture study commissioned by ABC, for instance, found that 18 percent of the return on investment (ROI) typically attributed to search, display, and short-form video is actually driven by TV. The study also found that TV advertising drives awareness, brand perception, and recall over a three-year period. Taking those factors into account, the authors of the study concluded that TV advertising has a higher ROI than digital media.

WARC has also recently supported this view. In an analysis of the most effective global campaigns of 2017, David Tiltman, head of content at WARC, notes that over the past three years, the percentage of TV-led campaigns has jumped while the percentage of social-led campaigns has fallen. “This in part reflects the changing nature of social, but may also reflect the wealth of recent research suggesting that marketers should use TV to ensure maximum reach,” wrote Tiltman.

In the past year, Pitney-Bowes released its first TV campaign in 20 years, according to AdAge. Additionally, AdAge also covered Life cereal’s return to advertising on broadcast TV after a decade-long hiatus. As Brian Wieser, a media analyst at Pivotal Research, told The New York Times, the reason TV advertising continues to thrive is that it works. Wieser compared TV to water flowing through plumbing: “You could set up a drone to take water from a reservoir and use fascinating technology and cutting-edge approaches to deliver it, but there’s a good reason we use these systems.”

And with the growth of automated buying technologies, even TV can take advantage of the future without losing its ability to produce results.

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