Why Amazon, Google, and Facebook Invest (Big) in TV... and Why Your Business Should Follow Their Lead

I'll be 42 years old this year. Coming off the holiday season, do you know what I think of every year when I see the lights, the old fashioned Santa Claus tins, etc...? Coca-Cola.

Do you know why? When I was young, Coke invested millions of dollars in television advertising. Not to make sure people like me knew Coke existed (everyone knew that), but to make sure people like me felt a certain way about their brand. It worked, and the impact has (so far) lasted for decades.

"But that doesn't work today," some may say. "TV is dead. Today, Coke world have to use social media and the internet." Partially true. Those platforms are certainly important. Audiences are increasingly fragmented with options, which has made advertising increasingly difficult and expensive. At least on the up front. Done properly, TV advertising remains the most effective and efficient way to see a return on investment over time.

Last year, Coca-Cola invested over $287 Million in TV advertising. Why? That answer hasn't changed from when I was a little boy. Similarly, Google invested over $549 million in TV while Amazon invested over $847 million!

The same study shows that Meta (the company who owns Facebook and Instagram) invested 62% of their advertising budget in TV advertising. Google's TV investment represented 66% of their total ad budget.

Again, why? They know two things -

1.) They know TV sells products.

We all know Amazon is just a big online store, but Meta also sells consumer products like the Meta Quest 2 (formerly Oculus, a virtual reality gaming console). Google sells smart home devices, mobile phones like the Pixel, and more.

In 2019 Jeff Bezos had a change of heart when it came to TV advertising before increasing their ad spending by 72.5%. Their current investments confirm they still believe TV is king.

2.) They know TV creates narrative.

Following Amazon's return to TV advertising, many industries have done the same. Our team talks to business owners, industry leaders, and agencies every day and we keep hearing variations of this thought: We can't quite explain it, but everything tanked over time when we left TV, and things started to level back out - even grow again - when we came back.

“Technology is becoming just like every other product," says Shira Ovide (New York Times Tech Analyst), "There’s not much difference between a Ford and Toyota pickup truck, so those companies know they must persuade you to feel warm and fuzzy about their model. Picking an app or an online shopping company likewise has become a lot about picking one that makes you feel good."

Remember... when I think of Christmas, I think of Coke, and I love Christmas!

Every business has products and services to sell that a lot of people know nothing about. Too often, ad dollars are wasted "just getting your name out there" with no real value to the consumer. Show, don't tell, how your product or service benefits my life. How does it solve one problem I have? How does it save me time? How does it remove a pain point? Why are you the best option?

Everyone says they are "better" or even "the best" but no one will believe that until after they do business with you. Be more specific. Show me.

Every business wishes they could control how people felt about their brand. Tell interesting and compelling stories! You can't stop all word of mouth, but you can influence the marketplace with some strategic "controlled" word of mouth. What do your customers care about? How can you join them and share in that story with them?

They will see through mere lip service. You'll have to back it up. Chances are, you and your business already do some pretty great things that you aren't getting enough credit for. Tell those stories.

Don't sell yourself short. It's easy to say, "Well, I don't have Amazon's budget, so I have to really make sure my investment works." Do you believe Amazon doesn't care about their profit and loss? Can you believe that Google or Meta doesn't care about return on investment?

These are businesses, just like yours. It's only a matter of scale. Focus less on Amazon's $847 million and more on how they split up their ad budget. For Amazon, Google, and Facebook (Meta), well over half is spent on TV.

Based on IAB research, that ad investment should look roughly like 70% TV and 30% digital. We expect that to look more 50/50 within a few years, but keep in mind that a lot of that "digital" is still "TV" when you really break it down (people watching TV through streaming services in the OTT/CTV space).

Ultimately, your advertising budget should be dictated, not by a gut feeling, but by a reasonable return on investment expectation based on the value of the product or service you are selling. Whether that means an annual budget of millions or tens of thousands, you don't have to risk or guess on what to do with it. You can follow the lead of others who have learned what works!

If you would like help creating a plan of action for your business to grow, using television and a variety of possible digital strategies, visit our website and reach out to request a meeting with someone on our team. You can also message me here on LinkedIn or Facebook to start a conversation!