Why Advertising Budgets will shift from TV to Digital?!

“Marketing budgets for digital have been increasing year after year; however TV still takes the bulk of the monies. Digital is bound to see a significant jump, at the cost of TV, due to multiple reasons. “

The growth of digital’s share in the advertising pie has been undeniable.

This growth has come at the expense of most other forms of media, except for Television. TV still commands the maximum share of the advertising pie, and in fact, continues to grow.

However, this trend may change sooner than you would imagine. And multiple factors are influencing this rapid change.

At the outset, let’s understand some of the key reasons why Television has been a preferred medium for advertisers who could afford it, and also what are some of the constraints of television as a medium.

1.   Nothing beats an audiovisual format for storytelling: and for the longest of time, television was the only medium that offered a very good quality audio-visual format.

2.   Television could deliver a very large reach: you want to launch your new chocolate brand or your beverage drink or your new auto model, the one quick way of getting word out to a large audience, was by putting out a television commercial, because TV could give you a large reach, second to no other format

3.   Real-time events: in specific, live events like a cricket match or a budget speech or similar ones, had the audiovisual format, combined with a real-time unveiling of information that viewers did not know about, again leading to an attractive pitch for TV as a medium.

These have been the prime drivers towards television, for most advertisers.

As against this, the constraints of television as a medium for advertising, first of all, was it’s high media cost. You’re talking thousands of dollars for a ‘blink-and-you-miss’ few seconds of television advertising.

Secondly, the options of finding a very specific target audience were minimal. And if your options to not finding a desired target audience, was to go broad-based, and advertise on a mainstream GEC channel, the options were limited and competition to advertise, was fierce, driving the costs high.

That said, the advertiser who could afford to spend those kinds of moneys, continued to advertise on television, leading to TV remaining the top format for advertising.

While everyone in the media world would agree that digital would keep increasing its share of the pie, slowly but surely, few would concede that a further rather rapid growth in digital advertising could come at the cost of television.

I am one of those few, and the reasons I believe this will happen, are shared below.

Let’s take on the primary three reasons that drew the advertiser to TV, as mentioned above.

1.   The audiovisual format of storytelling: is not restricted to television anymore. Digital destinations like YouTube, Facebook, Instagram, Twitter, etc. have made video easy to deliver and consume, and are firm contenders as options to showcase your audiovisual stories on. A lot of television is anyway, consumed on smaller screens today. But even if you were interested to view you’re a/v stories on a larger screen, you have options like: a) smart TVs that show the digital content and b) options like Apple TV and others that enable you to beam your mobile screens onto a larger screen.

Clearly the advantage of showcasing a rich audiovisual story, has been nullified, for television.

2.   Then there was the question of a large reach: So yes, some popular GEC programs or a live cricket match, might still deliver a one-off larger total reach, if you think in terms of a single instant visibility across the board. But the digital numbers have gone up and up and up. The Indian internet user base has climbed to around 325 mn levels, and growing very rapidly. There ARE options available today, as individual ones or as a combination of a few popular digital destinations, that could deliver millions in terms of reach, for an advertiser, on digital. So quantity for quantity, digital has reached within striking distance of matching the numbers for the most popular television program, and is already bigger than the large number of other TV programs, whose reach is much smaller. At this time, I am not even talking about the quality of the audience reached.

3.   What about live / real-time content that TV delivers: well, Facebook Live is here, and is becoming increasingly popular. And there is Periscope and other options too. Yes, these are early days for all of these, but the fact that good, easy real-time streaming technology is now available and one can use it on a simple 3G or 4G connection (which is very accessible now), means that it is a matter of time, before television’s dominance on real-time broadcasting continues. What’s to stop, say, the next Fashion Show, to do a Facebook Live only broadcast, and not negotiate hard with a TV channel?? You could always have done live broadcast of your events earlier too, but now, with platforms like Facebook, you can get a very large audience too, for the live broadcast!

These were the three main drivers towards Television, and as we can see, all three of them, are being significantly challenged.

So if such interesting options are available, why would one pay big money to television for advertising? If a brand can get to deliver their A/V story, to a large audience, maybe even riding on top of a live, real-time event, and the brand can do all of these, for a fraction of the cost of television advertising, isn’t it a no-brainer that money will shift from TV to digital, very soon??

Still not convinced? Well, the above were just point-to-point counters on the key advantages offered by TV. But there’s a lot more that digital provides that completely tilt the scale in favour of digital versus TV.

1.   Length of the story: what’s better as a storytelling platform than a 30-second audiovisual format? Maybe a 60-second one. Or perhaps 2 minutes, or 5 or even 10 minutes?? Only, if you were to play these on the extremely expensive TV media, you’d be down by a lot of dollars! Digital on the other hand, is not so constrained for space or time, and you could easily tell your story over a longer duration.

2.   Much improved audience targeting: there is just, such an immense amount of targeting opportunity available on digital now, from targeting options that say, a Facebook gives, or an even sharper audience targeting that programmatic media offers, that the advertiser could easily buy reach that matters, and have minimum wastage!

3.   The story does not end with the video: on television, you could have the most compelling advertisement, generating amazing emotions from the viewer, but then, he still needs to go to the store to purchase. Howsoever convinced she may be, on seeing the advertisement, as the moment passes, the opportunity is gone. Whereas, on digital, even as she is viewing the advertisement, or just after it, all it takes is one more click to get to the online store, and maybe go ahead and purchase. Or place an order, or put out a lead.

4.   Non-linear viewing: a lot of television is consumed via recorded TV (DVR). For an advertiser, if the audience is not present or not attentive, when the ad plays out on TV, that’s money gone down the drain. But with digital, the ad / video can play any time of the day or night, and with programmatic audience targeting, in fact, it can play closest to the moment when the viewer is likely to be most receptive to the ad.

With all of these going in favour of digital, the expensive seconds of television media are clearly threatened. It is an inflexion point, and the response of mainstream television will decide on how quickly the balance changes. Or not. Can TV also get more intelligent via desktop boxes? Will the rates of TV advertising drop dramatically, in response? It may be noted that creative brilliance will still be required, irrespective of digital. What will score finally, will be the quality of the content. Just the medium of broadcast, and that one part of the budget that takes away the most dollars today, is under challenge! 

Note: This article also appears as a two-part series at: https://www.ibtimes.co.in/why-advertising-budgets-will-shift-tv-digital-part-1-712396 and https://www.ibtimes.co.in/why-advertising-budgets-will-shift-tv-digital-part-2-712402