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4 Reasons Linear Is Set for Increased TV Advertising Spend

August 23rd, 2018   ||    by Susan Kuchinskas   ||    No Comments

As the tech revolution rages on, linear television remains a constant. Pronounced dead more than once, plain old TV remains relevant, and viewership is even growing in some instances. While OTT and streaming video have the shiny-new-thing luster, an increased TV advertising spend is already here among some advertisers.

Media agency Magna recently revised its forecasts, according to Broadcasting & Cable. While it previously expected spending to decline by 0.2 percent, it’s now looking at an increased TV advertising spend of 0.2 percent, totaling $43.5 billion in 2018.

Magna is far from the only entity that sees traditional television commercials poised for continued growth—as well as change.

Rolling With the Times

Streaming continues to grow in popularity, but it certainly has not replaced linear TV. Streaming is more of an incremental addition to people’s viewing, according to Nielsen. Nielsen found that, among adults who did stream video, 93 percent also watched traditional TV. Moreover, on any typical day, 47 percent of those streamers only watched linear television.

Here are four reasons why linear television still draws viewers—and why it deserves an increased TV ad spend:

Live TV: Live events like the Olympics and late-night shows like Saturday Night Live, as well as local news, are an important draw for viewers. Some live shows, such as The Bachelor and The Voice, create in-the-moment buzz, with fans chattering on social media as they watch. Savvy marketers incorporate elements of the shows into their commercials, keeping that buzz going through the breaks.

Elections: Local and national elections depend on traditional television advertising to gain the reach they need. The Hill reported that the Democratic Senatorial Campaign Committee has reserved $30 million for TV advertising in six states during the run-up to midterm elections, with more spending to come.

Effectiveness: The old saw about marketers not knowing which half of their ad spending worked is no longer true for television. Examples of increased TV ad spend come from 50 young, digital-native brands tracked by the Video Advertising Bureau. Its study of these brands, across categories from food and travel to auction and personal finance, found that they collectively spent over $1.3 billion on linear TV in 2017. This was an increased TV ad spend of 98 percent, year over year.

The reason: TV ads were quite effective in driving traffic to these brands’ websites, providing on average an 83 percent lift in their unique website traffic post-campaign.

Brand safety: Another reason to expect an increased TV advertising spend is that it offers brands the safety that they can no longer expect from programmatic digital advertising. That Magna forecast mentioned that concerns about their brands appearing alongside questionable digital content, as well as the continuing inability to truly understand digital ROI, have kept big consumer brands loyal to traditional TV.

TV, Evolved

The effectiveness of TV advertising is getting another boost with the advent of what MarTech Today calls “advanced TV.” Advanced TV refers to the convergence of linear television with streaming video delivered through OTT platforms and digitally enabled connected TVs. The article notes that even more households are becoming addressable via their cable and satellite providers. This convergence, along with programmatic buying tools for linear television spots, allow marketers to target ads based on data and trigger campaigns based on local events or weather conditions.

This shift is well underway. New research from Videa’s Change Management survey shows that the TV advertising industry is ready and eager for change.

The survey of 174 participants, comprised of both media agency and TV station members and advertising reps, found that 91 percent were personally enthusiastic about trying new technology that is intended to create change in the TV advertising industry. Additionally, 84 percent cited their organizations were enthusiastic about new tech.

Automation is an inevitable part of this evolution, according to 88 percent, with 72 percent saying their organizations were at least somewhat likely to implement automation solutions.

Automation, including programmatic buying of TV spots, makes the buying process more efficient. It also allows for better targeting and reporting, making an increased TV advertising spend more effective.

Our take: Television is not dead, and neither is TV advertising. They’re firmly fixed as part of the future of entertainment and marketing.

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