TV usage and buying have been evolving but the pandemic has accelerated changes. People are dropping paid television plans at a far faster pace then pre-Covid, and it may not slow down when “normal” returns. In turn, this will change how smart buyers look at TV buying. There is much more to consider when advertising on television.
Prior to the pandemic Americans were already questioning how they wanted to watch TV. Not only were people watching Netflix and Amazon for alternative programming, folks were leaving cable and satellite all together. Instead, they were getting their programming delivered over the Internet through Hulu, Sling or others. The younger the viewer, the more likely they were to cut the cord.
One of the effects of “shelter-at-home” is that people have much more discretionary time but nowhere to go. So, they turn to media for entertainment. Not surprisingly, TV has seen a huge spike in viewership. At one point during the pandemic TV viewership was up 42%.
At the same time, millions of people have lost their jobs. Suddenly, spending more than a hundred dollars a month on pay TV was a luxury. It is far more cost-effective to drop the expensive services like cable and satellite and look for cheaper alternatives, such as streaming TV. In the first quarter alone the five largest pay services lost 1.6 million viewers. A 70% increase from the year before.
Broadcast and Cable TV
Most of us are familiar with Broadcast and Cable TV, what is commonly referred to as linear TV. Broadcast television reaches huge audiences both on a local and national basis, sometimes at very attractive cost-per-thousands. However, just because they reach large audiences efficiently, does not mean they are cheap, especially in large markets. And because they cover the entire marketplace, they can be very wasteful to a more local advertiser.
The beauty of cable is that it gave millions of advertisers the opportunity to advertise locally. Even though most major cable channels are national, each local cable system is able to insert ads just for their geography. This eliminates waste and brings down the overall cost substantially from broadcast. And because many cable channels speak to specific audiences, cable can be very targeted. Sometimes cable can be so targeted that it becomes inefficient as the cost-per-thousand viewers becomes very high.
Streaming TV and pre-roll video are the latest entrants into the TV realm. It is no longer accurate to only consider television to be what you watch in the living room. While the delivery method may change, people are watching video content on all types of screens. Because streaming TV is delivered via the Internet there are many more targeting options. You can target down to zip codes, by age, gender and interest. Streaming TV is more of a one to one relationships whereas broadcast and cable are one to many.
Then there is digital pre-roll, which can take many forms. They can be commercials you see before watching a news clip or sports highlight online. It can be an ad on YouTube that plays before the video you selected. Pre-roll video plays in the feeds of social media. The targeting of Digital Pre-roll is the same as streaming TV as it is an Internet based media. Buttons can be added to the video to allow the viewer to click for more information. You can buy skippable and unskippable commercials. Digital Pre-roll is the least expensive form of video delivery. However, it is usually watched on a mobile device, often without sound.
The multitude of TV choices can seem daunting. As with any media selection process answering some simple questions can help determine your choices. Knowing the objective, target audience and budget are important factors. If your geographical target only covers a few counties, not the whole market, eliminate broadcast. An older audience is less likely to watch a lot of digital pre-roll. Because cord-cutting is becoming more prevalent, some digital video should be included in a TV plan. As with any media plan, a good TV plan involves a mix.
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