Thinking Inside the Box

Thinking inside the box Debunking the myths in TV advertising

in partnership with

Channel line-up

11 8 6 4 18 14 12 20 22 24 26

Fact vs. fiction

The current state of play

Top 10 categories - TV spend

Why TV works: Trust

Why TV works: Emotion

How people watch TV

The bigger picture: TV's role in the marketing mix

Money well spent

Sky AdSmart

Innovations in TV

Rewind and fast-forward

2.

It's time to start thinking inside the box...

3.

Fact vs. fiction

TV is expensive.

There are a lot of incorrect assumptions surrounding TV, and we’re here to set the story straight. For the professionals and London-bound marketers and brands amongst us, it’s easy to forget that a whole other world exists outside the fast-moving capital. We must not get out of touch with who is sitting behind the screen. In this report, we look to not only assess the effectiveness of TV as a marketing channel, but to also subvert some of the common misconceptions that often prevent brands from taking advantage of this incredibly efficient medium.

TV is not for luxury.

TV is mass market.

No-one watches live TV.

4.

5.

The current state of play

TV is becoming extinct booming! As the world around us becomes filled with incoming data signals and digital technology, there is apprehension amongst many brands that traditional channels, such as TV, are less relevant than they once were. However, if you take a look at the data, this is simply not the case. In fact, according to Nielsen, TV accounts for over half of UK advertising spend (around £5.07 billion), which is a 0.8% revenue increase compared to the previous year. More importantly, over the last five years, TV spend has consistently remained around the £5 billion benchmark showing that, even in uncertain times, it continues to be a popular and effective choice for both brands and marketers.

£ 5.23 billion

£ 5.149 billion

£ 5.066 billion

£ 5.027 billion

£ 4.662 billion

2014

2015

2016

2017

2018

Source: Nielsen TV spend 2014-2018

6.

FACT: TV accounts for 37% of the media that adults choose to consume in any given day.

Industry standard commercial TV reaches:

65.9%

of the population in a day.

Source: TouchPoints 2018, IPA. Base: adults 15+. Includes only media which people choose to consume. TV, radio, newspaper & magazine figures include online/app consumption

90%

of the population in a week.

97%

of the population in a month.

Source: BARB, 2017, individuals, reach3mins+, TV set viewing within 7 days of broadcast

7.

Top 10 categories - TV spend

Entertainment & Leisure £531m

Retail £652m

Finance £439m

6.4% year-on-year

0.4% year-on-year

14.7% year-on-year

Retail continues to have the highest spend year-on-year

Travel & Transport £239m

Telecoms £259m

1.8% year-on-year

1.2% year-on-year

8.

Motors £320m

Food £340m

2.6% year-on-year

3.7% year-on-year

Finance has seen the biggest rise, up 14.7% year-on-year

Cosmetics & Personal

Government / Social Organisation £208m

Pharmaceuticals £152m

£223m

0.9% year-on-year

11% year-on-year

5.7% year-on-year

9.

Source: Nielsen 2018 TV spend vs. 2017 spend year-on-year growth

When people feel insecure about something, they look around for validation. Show them that other people trust you.

Francisco Rosales

10.

Why TV works:

Trust

In a time of economic uncertainty, “fake news” and questions surrounding safety in programmatic advertising, it is no surprise that consumer trust in brands has waned over the last few years. As a direct result of this growing public scepticism, many brands are turning towards traditional mediums, such as TV, to re-establish themselves as trustworthy and responsible. For many years, there has been a persistent aura of elitism surrounding TV, with brands shying away from the channel because they believe it is solely the realm of high-investment ‘superbrands’ like Coca-Cola, John Lewis or Virgin. However, ironically, for smaller brands it is this very prestige that makes TV so effective as an advertising medium. When people see a TV campaign promoting a small-to-medium-sized business, they subconsciously associate this brand with other recognisable household names, reinforcing the product’s prestige and impact. Marketers can no longer expect a consumer’s loyalty, but must prove their credibility - and, if you take a look at the data, it becomes clear that TV advertising is a highly effective way to do so.

TV outperforms every other channel when it comes to establishing brand salience and achieving a strong ROI.

Source: Radiocentre & Ebiquity, Re-evaluating Media 2018

11.

Why TV works:

Looking at this list, you may notice one glaring common denominator between all the nation’s favourite ads: they are all TV campaigns.

Last year, Marketing Week conducted a study to discover the UK public’s favourite advertising campaigns of the past four decades... Emotion

...these were the results:

1970s Hovis: ‘The Bike Ride’

1980s Yellow Pages: ‘JR Hartley’

1990s Guinness: ‘Surfers’

12.

TV ads evoke emotion more than those in other media

It’s not difficult to understand why TV naturally aligns with delivering memorable campaigns. Whether it’s a hard-hitting charity campaign that inspires generosity, or a glamorous luxury car manufacturer that taps into our inner need to feel unique and exclusive, TV offers a multisensory experience that few other channels can compete with. For most of us, TV also brings back fond memories of being crowded around our living room screen, surrounded by our loved ones, ready to relax after a long day and tune into our favourite shows. Because of this, as a medium, TV taps into a sense of nostalgia that few other channels can compete with. If done correctly, an inspiring or memorable TV ad can instantly transport us back to a time in the past, just like our favourite TV shows. And, in a time of growing uncertainty, consumers naturally look towards channels they can trust for guidance.

58% 9% 9%

TV

Social Media

YouTube

6%

6%

5%

Website

Newspaper

Radio

3%

2%

1%

Magazines

Search

Outdoor

2000s Cadbury: ‘Gorilla’

2010s Aldi: ‘Like Brands Only Cheaper’

Source: TV/Ad Nation, 2016, Ipsos Connect/Thinkbox, adults 15+ Question: 'In which, if any, of the following places are you most likely to find advertising that...

13.

How people watch TV

0400

03:30

03:00

02:30

02:00

01:30

01:00

00:30

00:00

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016 2017

• Live TV – watching a programme as it is broadcast • TV Playback – watching back a recorded programme • Broadcaster VOD – accessing programmes on demand e.g. iPlayer, 4OD • Subscription VOD – paying a premium for exclusive content e.g. Netflix, Amazon Prime Key

Live TV

TV Playback

Broadcaster VOD

Subscription VOD

Source: 2008-2018, BARB / Broadcaster stream data / IPA TouchPoints 2018

14.

TV is changing...

While high-quality viewing content has ensured that TV has remained stable over the past few years, the nature of how viewers watch TV has completely transformed. From the introduction of catch-up and on-demand viewing to the surging popularity of subscription VOD services like Netflix and Amazon Prime, consumers can now choose how they engage with their favourite TV shows from a variety of options. With people paying a premium for these on-demand services, they have much higher standards when it comes to content – and the ads they see are no exception. Brands can no longer expect a consumer’s attention; they must cultivate it through rich, exciting and innovative creative. Primarily thanks to VOD services like Netflix, we are living among a series- obsessed nation so, moving forward, one way we may witness this demand for creativity being achieved is through new opportunities for brand storytelling. With thanks to evolving programmatic capabilities, brands will soon have the ability to serve targeted households with ads in personalised instalments. Victor Wong, CEO at Thunder Experience Cloud, predicts that in the future, video ads will become “more like content and an ongoing story told over several episodes, rather than cramming everything into 30 seconds and repeating that same message over and over.”

Source: ExchangeWire, Experts Predict How TV Will Evolve for Advertisers in 2019

15.

...but don't rule out live TV

Although the popularity of live TV has slightly diminished over the past decade, it is unlikely that it will ever totally fall out of favour.

This is because, psychologically-speaking, live TV plays into our universal human desire to share experiences with one another - whether it is by debating the latest X Factor eviction in our living rooms or by sharing memes on social media. 77% of people who watch live TV say they do so to stay ‘in touch’ with current trends. In fact, even when it comes to catch-up TV, 39% of audiences view a recorded programme on the same day it was originally broadcast. This is largely to avoid what the millennial generation have coined as ‘FOMO’, or ‘the Fear of Missing Out’ – a fear that has been strengthened due to the proliferation of social media.

Source: The Age of Television, 2018, MTM/Thinkbox

16.

39%

40%

35%

30%

25%

19%

20%

14%

15%

8%

10%

6%

4%

4%

4%

5%

1%

0%

VIEWING ON SAME DAY AS LIVE

DAY 1

DAY 2

DAY 3

DAY 4

DAY 5

DAY 6

DAY 7

8-28 DAYS

Source: BARB, 2017. All playback on a TV set 0-28 days post broadcast, individuals

17.

The bigger picture: TV's role in the marketing mix

3.50

3.00

2.50

2.00

1.50

1.00

All

TV

Radio

Print

OOH Online Display

Online Video

Source: Thinkbox Profitability Study, 2017

18.

With endless options and unlimited data feeds, people have become more impulsive and expectant of instant gratification. While it is obvious to focus on the consumer, it’s the marketer mindset we should really be addressing here too. With targeting capabilities skyrocketing and endless data availability, it’s become easier than ever to fixate on the tangible. Focusing on ROI is, of course, productive, but profitability and brand growth can only be achieved when the long-term is addressed. It’s about finding the line between efficiency and effectiveness. The long-term multiplier effect demonstrates how much additional impact a business can expect to see in the long term versus the short term. Ebiquity and Gain Theory’s award-winning ‘Profit Ability’ study revealed what marketers cannot always see, and that’s the quantifiable results of long-term efforts. Unsurprisingly, the study found that TV has the strongest LTM increase than any other channel. On average, advertising delivers a long-term effect that is 1.9 times greater than the short-term effect, meaning that if your ROI is £1.50 for every pound spent, you’d expect to receive £2.85 back in the long term. That LTM figure increases to 2.4 for TV, closely followed by Online Video – highlighting the power of audio-visual media and the inevitable brand-building it delivers.

With 61%of short-term profits being delivered by TV advertising, and 86%of all long- termprofits, television advertising is safe space to be. Remember, not everything that can be counted counts.

19.

Money well spent

FACT: 60% of advertisers spent less than £250,000 on TV in 2018.

TV advertising is expensive affordable!

TV is often perceived to be exclusively for big brands with even bigger budgets. However, when you look at the make-up of TV advertisers in terms of spend, the vast majority actually fall within the £0-£250k bracket. A significant proportion of these are also new-to-TV advertisers who are taking advantage of the increasingly affordable options offered by regional broadcasters and addressable TV.

1200

1003

1000

800

578

600

419

413

400

139

128

200

6

0

Less than £50k

£50k - £250k

£250k - £1m

£1m - £5m

£5m - £10m

£10m - £50m

£50m+

Annual Spend on TV Advertising

Source: Nielsen Addynamix 2017

20.

21.

Sky AdSmart

Available targeting options on Sky AdSmart:

One revolutionary innovation in TV

Mosaic

Finance

advertising has been the launch of Sky AdSmart. The initiative allows different ads to be shown to different households who are all watching the same programme. Advertisers can select key demographic attributes that they are looking to target – such as age, location or lifestyle – and only show ads to those who fit who fit the bill. For example, if a high-end hotel was looking to target affluent prospective travellers, they could restrict their TV advertising to postcodes surrounding their hotel location and only target households above a certain income threshold. While this technology has already been employed by high-profile national brands, including Santander and Match.com, its ability to reach highly relevant audiences makes it equally accessible for niche brands, small-to-medium-sized businesses and location-specific advertisers. Moreover, it also opens the door for brands operating in the luxury market, who have often steered clear of TV advertising, deeming it a 'mass market' medium. Sky AdSmart provides much greater advertising flexibility for businesses of all shapes and sizes.

Composition

The House

Location

Lifestyle

Vehicle

Custom

22.

23.

Innovations in TV

Regular Scheduling

Channel 4's contextual targeting.

Another key trend to watch out for in TV is the growing opportunities for contextual targeting. This has been spearheaded by Channel 4, who have made massive strides in ad personalisation through their latest multi-award-winning innovation: Contextual Moments Scheduling. This new targeting system uses AI to look for key ‘contextual moments’, such as objects, actions and positive themes within programmes that directly precede an ad break. The system then offers brands that match with these ‘moments’ the opportunity to book the first ad spot that follows, ensuring that these themes are still front of mind for your customer. For example, where previously a baking brand may have only secured advertising spots during The Great British Bake Off, this technology means that now this brand can locate further contextual opportunities in a wide range of programmes. If an episode of Made in Chelsea featured a character baking cookies while catching up with her friends, then the advertiser could take advantage of this by securing the first ad spot following this scene.

Channel 4’s initial research has already shown that positive contextual moments followed by a corresponding ads dramatically increases the likelihood of ad recall by up to 101%.

The Great British Bake Off

24.

With Contextual Moments Scheduling

Hollyoaks

The Big Bang Theory

Made in Chelsea

Come Dine With Me

25.

Rewind and fast-forward

Just a quick look at the data reveals that, over 90 years after the First Electronic Television was invented, TV is as strong a medium for connecting with the public as it has always been. cynics may tell you, TV is not going anywhere soon. Despite what the nay- sayers andmarketing

It feels that we are at a key turning point in TV advertising.

While this channel still offers the nostalgic comfort and consumer trust that has made it such a successful platform, new technologies are evening the playing field for smaller and medium-sized businesses that also want to connect with audiences on an emotional level. This is a golden opportunity to capitalise on the trust and authority of TV, but enter with the reassurance that there are more affordable and highly-targeted options than ever before.

26.

My TV advertising can bemore targeted and niche than ever before.

It’s also worth remembering that although short bursts of marketing activity will likely ensure monthly ROI targets are met, what we really need to focus on are those long-term multiplier effects. This can only be achieved by making your brand memorable through emotion-led messaging and bold creatives – for which TV is the ideal candidate. Quality drives quantity. As paid subscription services like Netflix and Amazon Prime grow, it’s time to match that consumer demand for high-quality and user-centric content with the ads you create. So, yes, the nature of the way we watch this medium is changing, but TV’s place in a media plan has not. TV is surely keeping up rather than slowing down, as it stays up-to-date with digital innovations, wastage-efficient targeting and realistic budgeting. We need to remember why TV advertising works.

TV is relevant for luxury brands.

TV advertising is a cost-effective investment.

Live TV is still a great way for me to reach audiences.

27.

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August 2019

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