Myth busting series: no.1: TV is dead

Welcome to our myth busting series!

On a regular basis, we’re going to take on some of the common marketing myths being peddled by the industry.

Why? Because all too often commercial solutions are being recommended to clients based on bias, conjecture and hear-say. We believe all solutions should be based on hard evidence and fact.

Underpinning our series will be some of the most robust research available to our industry – the IPA (Institute of Practitioners of Advertising) Databank analysed by Les Binet and Peter Field for studies including: The Long and the Short of It (2013), Selling Creativity Short (2016) and Media in Focus (2017).  This research is based on the confidential data submitted, since 1980, alongside entries to the biennial IPA Effectiveness Awards competition.

The data captured includes a comprehensive range of campaign inputs (such as strategy, media choices and brand circumstances) and campaign outcomes (such as business effectiveness measures, efficiency, ROMI, and brand measures). The analysis’ primary focus is an independent examination of how inputs, especially media choices, affect outcomes.

So grab a cuppa, sit back and let us bust your myths!

Myth no.1: TV is dead

We’ve heard this one a lot.

“No one watches TV anymore!” “People are only watching video online these days.”

Yet, advertisers continue to spend heavily on TV. Why?

Are they lying to clients? Do they just want their mum to see their fancy creative during a Corrie break? Are they just looking for their ticket to Cannes?

Some, maybe. But the majority are doing it for a simple reason. Because TV works.

TV has historically been the medium with the biggest effects on hard business metrics (like sales, share and profit.) And the IPA data proves it still is, even in the era of smartphones, social media and online video.

In the chart, Binet and Field have compared the standard metric of overall effectiveness (the number of ‘very large’ business effects, such as sales, share and profit) for campaigns that used TV against those that didn’t. And they’ve looked at data from 2008 – 2016.

As we can see, those campaigns using TV are considerably more effective than those that don’t. In fact, the data shows that TV increases overall business effectiveness by 40%.

The research goes on to show that TV advertising has a particularly strong effect on market share.

Brands that use TV tend to gain market share around twice as fast as brands that do not. This is not just a budget effect. Share of voice analysis shows that campaigns that used TV produce much bigger market share gains for a given level of share of voice.

What’s more, it turns out that as internet usage has increased the effectiveness of TV, not damaged it. In fact, TV is now enjoying an all-time high.

Why? Because Video On Demand (VoD) has, to date, complemented TV, not replaced it. Although VoD is delivered via the internet, the distinction between VoD and TV is becoming increasingly blurred. Although viewers may realise that the content is delivered through their broadband connection when prompted, they probably regard channels like the ITV Hub and Netflix as ‘TV’ most of the time.

What’s more, Touchpoints data shows that subscriber VoD is still too small to be able to compete.  In 2016, it only accounted for 4% of total video hours, much less than most people in advertising would probably expect. As yet, the rise of subscriber VoD has not significantly dented viewing figures for conventional broadcast TV.

However, it must be noted that VoD is more important for younger viewers, and it is growing fast, so it may eventually pose a threat. And because it carries no advertising, it could reduce TV ad effectiveness in the future, but there is no sign of that at present.

Another reason why VoD has not hurt broadcasters much yet is that they have been exploiting it themselves. Just under half of all VoD viewing is broadcaster VoD services, like the ITV Hub and 4oD, or ‘catch-up TV’ as they are sometimes known. Unlike subscriber VoD, broadcaster VoD does carry advertising.

Although the audiences tend to be smaller than for live TV, catch-up TV does have two advantages. It delivers extra reach, and the audience tend to be paying close attention, since they have quite deliberately chosen to watch this particular programme above all others. And, unlike playback TV, they can’t skip the ads.

Binet and Field suggest that broadcaster VoD is indeed very useful, but as an addition to the TV schedule not as a replacement. Data suggests that campaigns that include catch-up TV tend to be more effective than those that don’t, perhaps as much as a third more. Given the relatively small percentage of the TV budget that usually goes towards this channel, VoD is an efficient way to amplify TV effectiveness.

So the next time your friend down the pub tells you TV is dead, remember these myth busting facts….