A CHANGING CHANNEL
Despite digital ad spend continuing its lead over television, the medium is still very effective when used well.
The first ever television ad cost a whopping $9. It was for Bulova watches and was broadcast in 1942 during a baseball game between Philadelphia and Brooklyn.
And no doubt, return on investment at an event of that scale wasn’t too shabby either.
Now, the cost of a television ad is generally in the thousands, given the production costs involved.
And while at one time, this expenditure was more than justified considering TV had most households’ undivided attention, viewers have since dwindled as audiences have scattered their attention over different entertainment platforms.
So, naturally advertisers have responded to this, shifting much of their ad spend over to digital platforms.
But, that’s not to say TV should be discounted. Despite the dominance of digital over TV in terms of ad spend, TV still makes up a large slice of the advertising revenue pie.
According to the Advertising Standards Authority’s (ASA) 2017 New Zealand Ad Revenue Report, broadcast television brought in $566 million, with an additional $25 million from digital TV revenue (including online streaming platforms).
This means broadcast TV revenue has risen from the 20152016 results, where it brought in $580 million (including digital TV revenue). And while the growth isn’t huge, it’s still significant in a fierce and cluttered media climate.
To compare with its main competitor, digital, digital-only channels brought in $785 million, but including digital extensions of other media (like radio, newspapers, TV), digital reached a record $923 million in revenue, up from $891 million in the previous results.
TVNZ commercial director Paul Maher says smart marketers understand TV’S power and are moving spend back to television.
“Some lost their way for a while but we’re seeing them return to the fold. Global marketing leaders Procter & Gamble and Unilever over the past 12 to 18 months have moved money back to TV, recognising the importance of scale and mass reach to build brands and the equal importance of brand safety.”
In response to the swift rise in digital, New Zealand TV broadcasters have been working together to champion the industry and show advertisers that there are still plenty of reasons to invest in television.
This is best exemplified with the launch of Thinktv by TVNZ, Mediaworks and Sky TV, who are using it as a collective voice for the industry to celebrate the scale and effectiveness of the medium.
Thinktv’s website works as its hub, featuring a range of insights about TV including who’s watching it, which platforms it’s being watched on and what devices people are using to watch it, among other insights.
An annual ‘fact pack’ on Think TV’S website (using data from Nielsen), purports that in a week New Zealanders (five-plus) spend an average of five hours and 44 minutes watching TV/ video content online across all devices, compared to 18 hours and 12 minutes of traditional broadcast TV.
It also states 2.5 million New Zealanders (five-plus) watch broadcast TV per day, which amounts to 57 percent of the population.
So, it’s fair to say there’s still an enormous amount of New Zealanders watching television.
The simpler the better
Mediaworks chief customer officer and Thinktv chairperson Glen Kyne says the benefit of having this research in the local market is that it is helping to educate and inform advertisers.
“Before Thinktv was in existence, we were exposed to the self-serving messaging provided by the digital disrupters and there is no question there was a large investment into digital and this came at the expense of many platforms including television,” he says.
But he says broadcasters are now in a position to counter this. “[And] to ensure that TV, across its many distribution points, including digital, continues to deliver unparalleled effectiveness for advertisers, and continues to grow its share of advertising revenues.”
Maher agrees, saying too many advertisers are unaware of the performance facts around TV.
“Too often the weight of market messaging sits around the death of TV, the facts are that TV is still unmatched in terms of reach, unmatched in terms of efficiency and
empirical evidence supports the fact that TV remains unmatched in delivering recall and sales returns.”
Think TV has invested in research to validate its claims, and Kyne says studies conducted by marketing analytics researcher Ebiquity, TV delivers the greatest return.
“Ebiquity worked with real advertisers across differing categories, sales data and media plans to prove that for every $1 spent on media, TV delivers the greatest return.”
It’d be impossible to write about television without mentioning the elephant in the room, you guessed it, SVODS.
Nielsen’s most recent Connected Consumer Report tells us 1.2 million New Zealanders have access to a Netflix subscription, equating to approximately 434,000 households across the country.
This is significant, as after its launch in December 2015 only 684,000 New Zealanders had the service, so it’s almost doubled its reach.
It’s biggest subscription SVOD competitor, Lightbox now reaches 810,000 New Zealanders, according to its annual report.
But, the major broadcasters in New Zealand also have their own online streaming platforms. TVNZ Ondemand has 1.8 million subscribers, and Sky TV has around 824,782 according to its 2017 annual report (though down 27,897 from the year previous).
And though no subscriber numbers were available for Threenow, Kyne says it's experienced strong growth.
“18-24 months ago, across Threenow we experienced strong audience growth and we had about five percent of our audience live-streaming our content across a myriad of devices,” he says. “Fast-forward to today and that number has grown to roughly 30 percent of our audience live streaming.”
Maher says Netflix is a competitor in terms of viewing, but is not in terms of advertising.
“For us, and for other New Zealand publishers, the key competition at a platform level is Youtube and Facebook.”
He says this is why it’s important for the major local players to come together to ensure that facts of TV’S efficacy, brand safety and viewability are promoted in the market.
“TV’S performance in these areas is significantly greater than Youtube and Facebook. We’re able to work closely with local advertisers to create opportunities that tell their stories that hit the mark with viewers.”
You can’t beat a good story
On this note of stories, there’s been talk in the industry that brands are returning to great storytelling through TVCS.
Lotto is one brand that has focussed storytelling in its ads for a while now, a stand-out example of this is its long-running ‘Imagine’ campaign, including ads like ‘Pop’s Gift’ and ‘Mum’s Wish’ by DDB and The Sweet Shop, and most recently ‘Armoured Truck’, a story about friendship by DDB.
Lotto’s chief marketing officer Guy Cousins told Stoppress he believes its brand objective will be achieved by telling stories that viewers love.
“We’ve told some great stories in the past…and it was clear that we had to go back to great storytelling. It’s too easy to bombard people with messaging, but these days people have the option to just screen out. So it’s actually more incumbent on us to tell fantastic stories.”
DDB chief creative officer Damon Stapleton says the idea brands are returning to TVCS depends on who you ask.
“I would say that there there’s a lot of people that are too worried about the picture frames instead of the picture,” he says. “What everbody is obsessed about is being everywhere and connecting in a million different ways but people aren’t looking at the product.”
He says the reason he thinks Lotto ads cut through, is that they’re a fair trade off for the consumers’ time.
“If you see a few thousand messages per day they won’t watch it just because it’s there. you have to make things people are going to connect with. Whether that’s through TV or other channels, that’s irrelevant.”
Hunch managing partner Michael Goldthorpe agrees with Stapleton, in that the return to storytelling through TVCS is hard to measure.
“It's hard to quantify in an industry awash with opinions and conflicting metrics. But that’s certainly my perception – and my hope. Advertising is about cementing messages into memory to drive brand preference and ultimately sales. Nothing cements memories like a good story, well told.”
Rufus Chuter, former managing director of FCB Media, says media channel selection should always be based on the specific audience and business objectives.
“It isn’t a case of having ‘first choice’ media,” he says. “What’s clear is that TV remains a hugely valuable platform for delivering emotive content with the scale, impact and effective frequency required to create meaningful business impact.”
While television audiences have dropped off, there’s still a huge amount of New Zealanders watching TV each day and it remains an effective medium for visual storytelling.
Its positioning is summed up quite well in a quote from Steve Jobs from the early 2000s, who said:
“The most corrosive piece of technology that I’ve ever seen is called television – but then, again, television, at its best, is magnificent.”