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Tuesday, Dec. 18, 2018
Study: TV at a Crossroads
Erosion of linear TV viewing stalls adspend growth, as addressable TV sees slow take-upLONDON --(SPW)--
Linear TV, inclusive of real time and catch up viewing, remains by far the top medium for global display advertising spend, attracting over $140bn ad investment in 2018 - more than double mobile internet in second place on $58bn.
Linear TV's core strength is reach, and whilst daily viewing time has fallen worldwide in recent years - coinciding with the steady rise in internet penetration - advertiser demand has not diminished.
As the industry looks ahead, despite the challenges, addressable TV - the ability to show different ads to different households based on consumer data - may be where future growth lies.
TV continues to dominate global display adspend but its share is falling
Linear TV is estimated to have accounted for 41.9% of the total display advertising investment this year, or $140bn, in WARC's 12 key markets -Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, UK and US. This represents a rise in spend of 1.0% from 2017 and a share 25.1 percentage points (pp) ahead of the second-largest display medium, mobile internet.
However, linear TV's dominating position has been eroding since 2009, mostly at the expense of mobile, which has grown 16.6pp since then.
TV's reach is unparalleled, making it high in demand from advertisers despite viewing times decreasing
TV's core strength is reach, and its function to facilitate top-of-funnel building, which it does far more effectively than other media, especially over the long-term. Data collated by The Global TV Group from national monitoring organisations show that TV reaches 96% of individuals in key markets each month, and 71% each day on average.
But daily time spent viewing linear TV has fallen worldwide in recent years - it registered one hour 54 minutes during the first half of 2018, down four minutes from 2017 and 21 minutes from 2012 - coinciding with a steady rise in internet penetration.
The decline in linear viewing has not, however, led to a reduction in advertiser demand. This has driven up spot cost-per-thousand (CPM) in all key markets this year, ranging from rises of 14% in India, 4% in the US, 2% in the UK to 1% in Japan.
TV takes almost two-thirds of brands' successful, high-budget campaigns
WARC's Media Allocation Report, which draws from campaign data from over 15,000 case studies, shows that successful, high-budget campaigns invest more in TV while the proportion of budget allocated to digital decreases. Globally, successful brands in the alcoholic drinks and financial services sectors are the biggest spenders on TV.
In the UK, research has shown that, in the long-term (over three years), TV advertising is responsible for 71% of total ad-generated profit and in the short-term (three to six months), TV ads are responsible for 62%. In both cases, TV accounts for the largest share of profit when compared to other media.
TV's effectiveness is undervalued
Despite research by the Advertising Research Foundation (ARF) showing that sales returns dip $3 for every $1 reduction in TV advertising, and data from Ebiquity showing that TV ranks as the #1 most effective ad medium, 32% of brands responding to WARC's recent Marketer's Toolkit survey stated they intend to cut TV investment in 2019. Just under half (49%) intend to retain current levels of investment, while only 18% plan to increase TV spend.
Addressable TV will bring new challenges to the planning process
Smart and connected TV penetration reached 35.2% worldwide in 2018, paving the way for forays into addressable TV.
Whilst still in its infancy, addressable TV technology gives advertisers the ability to leverage user data to combine TV's reach with an expanded relationship to sales and lower-funnel KPIs.
But research shows that US viewers are largely unwilling for their personal data to be collected to facilitate such advertisements. Other concerns include measuring addressable TV's ROI accurately, and brands will need to weigh the benefits of its efficiency and frequency against increased media and creative costs.
James McDonald, Data Editor, WARC, summing up, says: "TV is a stalwart of the advertising industry, used to deliver effective brand building campaigns with positive ROI to a mass, engaged audience.
Addressable TV will be the next stage of evolution, though the $1bn spent worldwide this year is a fraction of total TV investment. As live TV still accounts for the majority of daily video consumption, the lure for advertisers is leveraging consumer data to get the right message in front of the right people at the right time."
Global media analysis: A round-up of TV
- 10.0% addressable share of TV ad impacts by 2022
- 41.9% TV's share of global display advertising spend
- 56.4% live TV's share of total daily video viewing in the UK
- 61.5% US consumers unwilling to have their personal data collected for more relevant TV advertising
- 62.0% TV's allocation in successful high-budget (10m+) campaigns
- 71.0% proportion of long-term advertising-generated profit by TV
Other new key media intelligence on WARC Data
- Brands set to question Snapchat and Twitter in 2019
- FAANG brands have increased their TV spend by more than $1billion
- YouTube engagements push Google CPCs to new low
- One-quarter of Netflix subscribers might leave if ads were introduced
- Global Ad Trends is part of WARC Data, a dedicated online service featuring current advertising benchmarks, data points, ad trends and user-generated expanded databases.
Aimed at media and brand owners, market analysts, media, advertising and research agencies as well as academics, WARC Data provides current advertising and media information, hard facts and figures - essential market intelligence for ad industry related business, strategy and planning required in any decision making process.
For more information visit https://www.warc.com/data
About WARC - your global authority on advertising and media effectiveness
WARC provides the latest evidence, expertise and guidance to make marketers more effective. WARC's mission is to save the world from ineffective marketing.
WARC's clients include the world's largest brands, advertising and media agencies, media owners, research companies and universities. They rely on WARC for rigorous, unbiased information and advice on almost any advertising and marketing issue, which WARC delivers via best practice guides, case studies, research papers, special reports and advertising trend data, as well as via webinars, awards, events and advisory services.
WARC collaborates with more than 50 respected industry organisations globally including: The Advertising Research Foundation, Cannes Lions, Effie Worldwide, Association of National Advertisers, ESOMAR, 4A's, IPA and DMA.
WARC was founded in 1985, and has offices in the UK, US and Singapore. In July 2018, WARC became part of Ascential plc, the global specialist information company.
About WARC Data - a global advertising trends, benchmarks, data points and database service
WARC Data provides current advertising and media information, hard facts and figures - essential market intelligence for ad industry related business, strategy and planning required in any decision making process.
Core features of WARC Data are:
Benchmarks: improve campaign performance using planning and measurement benchmarks
- ROI Calculator: compare campaign ROI with WARC case studies database
- Media Allocation: plan campaign budgets using media splits from successful campaigns
- Ad/Sales Ratios: advertising/sales ratios for 200 SIC-coded US industries
Data Points: Takeaway charts and data on media spend, costs and consumption
- New series of chart-led data articles bringing clients the most reliable stats on a given topic
- Delivered via search results and topic update emails
- Download the chart in PPT and/or the data in Excel directly from the article
- Articles are updated on a rolling basis throughout the year and can be saved in "My WARC"
- Global Ad Trends: a monthly report digesting the latest insights and evidenced thinking from the global advertising industry
- The Global Marketing Index (GMI): a monthly barometer of marketer sentiment towards trading conditions, budgets and staffing levels on a global and regional level
- State of The Industry: Mobile Marketing: results from exclusive surveys by WARC and the Mobile Marketing Association into brands' use of mobile around the world
- Media Consumption overviews: market-specific consumption trends for 36 countries
- International adspend forecasts for 12 key markets by medium and ad format
- WARC's adspend database holds advertising spend figures in 96 countries back to 1980
- Media Costs database monitors CPM and cost per 100 GPRs in 68 countries, by medium and target audience
WARC Data is available by subscription only. For more information visit https://www.warc.com/data
Ascential is a specialist, global information company that helps the world's most ambitious businesses win in the digital economy. Our information, insights, connections, data and digital tools solve customer problems in three disciplines:
- Product Design via global trend forecasting service WGSN;
- Marketing via global benchmark for creative excellence and effectiveness Cannes Lions and WARC, and strategic advisory firm MediaLink; and
- Sales via ecommerce-driven data, insights and advisory service Edge by Ascential, leading managed services provider for Amazon Flywheel Digital, the world's premier payments and Fin Tech congress Money20/20, global retail industry summit World Retail Congress and retail news outlet Retail Week.
Ascential also powers political, construction and environmental intelligence brands DeHavilland, Glenigan and Groundsure.
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