Seventy-eight percent of advertisers surveyed believe that traditional TV advertising has become less effective in the past two years. In light of this, marketers are exploring new technologies and media to help bolster their TV ad buys. These are two of the prime findings of a study conducted by the Association of National Advertisers (ANA) and Forrester Research.
The joint ANA/Forrester survey asked 133 national advertisers about their attitudes towards TV advertising and what impact new technologies, such as digital video recorders (DVRS) and video-on-demand (VOD), will have on their television advertising budgets. Those surveyed represent more than $20 billion worth of advertising, including such players as Charles Schwab, Colgate, Dunkin’ Donuts, Johnson & Johnson, Mattel, Pfizer and Verizon.
“As DVRs look to climb above 30 million households in the next three years, advertisers are finding themselves forced to reconsider their media mix,” said Forrester VP Josh Bernoff, who presented the study results during last week’s ANA Television Advertising Forum in New York. “Television networks continue to publish research that traditional TV advertising is potent as ever, but national advertisers aren’t buying it and are seeking alternatives to enhance their budgets and move them beyond the customary 30-second spot.”
Other highlights of the ANA/Forrester survey included:
- Nearly 70 percent of advertisers think that DVRs and VOD will reduce or destroy the effectiveness of traditional :30s.
- When DVRS spread to 30 million homes, close to 60 percent of respondents say that they will spend less on conventional TV advertising; of those, 24 percent will cut their TV budgets by at least 25 percent.
- While 55 percent say that their top executives are closely watching changes in TV advertising, most advertisers have not experimented with advertising on DVRs (49 percent) or VOD (44 percent).
- Eighty percent of advertisers will spend more of their ad budgets on Web advertising, and 68 percent of advertisers will look to search engine marketing.
- Advertisers are also looking at alternatives to traditional TV advertising, and will spend more of their advertising budgets on: branded entertainment within TV programs (61 percent); TV program sponsorships (55 percent); interactive advertising during TV programs (48 percent); online video ads (45 percent); and product placement (44 percent).
- And 97 percent of advertisers surveyed agree that the TV industry will need new audience metrics–other than reach and frequency–to report commercial ratings, not just program ratings, to effectively measure TV advertising.
“The television industry as we have known it may be challenged on a number of fronts, but continues to attract a significant media investment by ANA marketers,” said ANA president/CEO Bob Liodice. “As new and traditional media alternatives compete more aggressively for a share of the media pie, and marketers look to improve consumer targeting, reduce costs and enhance accountability, television is aggressively responding. With technology-based advances in addressability, enhanced television options, Internet convergence [IPTV] and branded entertainment opportunities, television is likely to continue as the dominant part of the marketing mix.”
