March 5, 2012 – 1:48 pm
Today's column is written by Ryan van Fleet is director of Insights and Analytics for Tremor Video.
Many marketing visionaries wholeheartedly believe that the time is ripe to complement TV budgets with cutting edge digital channels such as online video, mobile video, connected-TV and gaming.
After looking at Nielsen Fusion data for over 100 campaigns this past year, it’s clear that TV and online video have a yin and yang interplay. TV is still the best way to reach viewers, with online video effectively complementing the reach and frequency of television campaigns, especially when TV reaches a point of diminishing returns.
The analyzed campaigns represent $655 million worth of TV spend across broadcast, cable and syndication (spending data is based on Kantar Media analysis). We hypothesized that many of the campaigns included spending that failed to efficiently reach new consumers and generate an effective frequency. Today’s TV plans have not evolved with the times and are often inefficient. For example, some agencies and brands still refer to TV planning guidelines from 1999 that refer to a certain minimum needed: for CPG, the rule of thumb is 2,500 GRPs. In a multi-screen world where people consume media differently, the marketers who employ channels such as online video do not have to lean as heavily on TV to reach the same number of people.
Tremor Video identified $45 million worth of inefficient dollars across all of these campaigns, equivalent to about 7 percent of the total analyzed spend. In other words, the gain in TV reach for each incremental dollar spent was not enough to justify the spend. Nearly every campaign analyzed contained areas where additional TV spend was no longer effective.
The fun is not in running this data, but rather in the ability to simulate shifting the share of spending and uncover areas where a brand might be able to reach more consumers or increase effective reach to deliver complex messages without increasing spend.
Even when you live and breathe video, it’s clear that TV is still king. It is a great medium for building mass reach over a short period of time and one of the basic ingredients of a sound media plan. Using the same concept as TV -- sight, sound and motion -- online video enhances TV’s power by increasing reach where TV has hit its saturation point, and increasing frequency for higher brand salience among light TV viewers.
As the graphic below demonstrates, shifting $45 million worth of inefficient TV spend to online video results in a 4 percent increase in reach, or 156 million more people.
Let’s look at one campaign example for a cruise line trying to reach 25 to 54 year old adults:
- TV budget: $6.7 million for broadcast and syndication
- Shifting 7.5 percent from TV to video led to 3 % increase in reach
- The same shift resulted in 4% CPM efficiency for the target audience
- Social sharing results in bonus reach
Efficiencies aside, the additional tangible benefit of online video is the ability to reach viewers in a “lean forward” experience that encourages interaction with the brand. The data shows us that viewers are not simply watching video on TV. Rather, they are now actively consuming short and long form content on all video enabled platforms: computers, mobile devices, and internet-connected TVs. The “I want to watch it whenever, wherever, however” mindset is finally possible.
In an age where advertisers are under increased pressure to demonstrate return on investment, it makes sense to explore extending advertising from TV to where consumers are online. Smart marketers willing to shift their spending can start reaping the rewards right now.
March 5, 2012 – 1:48 pm