Display, mobile and online video have become indispensable tools for marketers over the last decade, and it’s clear that digital advertising still has a lot of runway to continue growing. Many believe this growth will come at the expense of television advertising, as the annual spend on digital is increasing more rapidly than on TV. However, while digital marketing is indeed growing at a rapid clip (15 percent according to eMarketer), the proclamations regarding the pending “death” of the $66 billion television spend are flawed.
Both digital and TV are expanding
The spending gap between digital and TV is expected to close in the coming years, but it won’t be because of marketers deliberately shifting budgets from one medium to the other, or from one screen to another. In fact, all estimates indicate that both digital and TV are expected to grow. What’s happening is that the multi-screen media consumption habits of today’s audiences are forcing a shift in how marketing strategies across each of these channels need to take shape.
The lines are blurring between TV and digital.
The economics and standards underpinning media buying, planning and execution are quickly changing. And, as a result, isolating spending and campaign planning that focuses solely on certain screens, formats or devices is quickly becoming an outdated approach.
How to adapt to this evolution
1. Tear down technology silos.
Digital advertising, the youngest of its marketing brethren, has brought significant innovation to the table, from data-driven programmatic technologies that enable automated media planning and buying to sophisticated optimization tools that help brands speak to their audiences at a very granular level. But, overall, digital is still separated from TV groups in many marketing organizations. Today, TV and digital have reach and scale, and smart marketers are integrating these marketing channels more tightly.
Tearing down the barriers that separate TV and digital is good for brands, agencies and the consumers with whom they are engaging, for a few of reasons:
Shared data. Given that consumers engage with content across a variety of screens, formats and types of media throughout the day, getting a cohesive picture of how, when and where they encounter marketing messages is extremely valuable. This data can help to shape creative strategies, as well as decisions related to reach, frequency caps and more. Shared data will drive better insight, better decision-making and better advertising overall.
Efficiency. The efficiencies brought by automated programmatic technologies in the digital space can bring similar gains to linear TV, and more effectively tie together marketing efforts across screens.
Innovation. A more open ad tech environment means that the industry can quickly adapt to the many changes we know (and don’t yet know) are coming. For example, mobile was a pipe dream seven or eight years ago; fast-forward to today, and it’s upended the way we do business, not just in advertising, but across all industries and globally. The only guarantee is that there will be a “next big thing,” and flexible technology platforms that allow for the plug-and-play of new innovations into both TV and digital are necessities to allow marketers to adapt quickly.
2. TV advertising economics should be the ultimate gold standard.
Digital can learn quite a bit about economics from TV. Unlike digital, which is filled with too many technology middlemen, TV returns close to 80 to 90 percent of a marketers’ spend to media. If digital is to continue to grow and continue aligning with TV, it’s time for a change of economics—with a greater focus on ROI.
Credit: AOL Platforms
Again, this is not about digital stealing dollars from TV—this is about making digital advertising as easy to do business with as TV, so that all stakeholders are able to extract the most value out of media.
3. Combine the power of upfronts with automation.
Upfront buying is traditionally associated with TV advertising, offering a venue for marketers to reserve broadcasting inventory in advance. In digital, programmatic buying automates all the traditionally manual processes (like insertion orders) that go into identifying, securing and serving an ad in an online venue (whether display, mobile or video).
Combining the upfront model with automated programmatic technologies gives advertisers an even more powerful way to enhance the value, engagement level and efficiency of their campaigns, in effect giving them the best of both the TV and digital worlds.
For example, setting up multiple “one off” programmatic buys for digital inventory creates a lot of administration and busywork for media planners. Upfront investments in programmatic packages will render these repetitive steps largely unnecessary, allowing technology to more effectively automate and optimize the allocation of pre-committed dollars.
In TV, applying automation technology to the buying process gives marketers a new way to segment TV audiences beyond the traditional age and gender metrics that the medium is currently transacted against. Programmatic also allows them to automate their ad spend towards more granular business targets, improve the relevancy of their messages and get greater value for their investment.
While it’s easy to pit television and digital against one another, when thinking about how media and advertising are going to change in the near future, the reality is that their fates are intertwined—TV needs digital, and digital needs TV.
And they have a lot to learn from one another along the way.