Numerous studies continue to show the effectiveness of TV advertising in both the short- and long-term, and yet it seems we are still a long way off from being able to trade on longer-term brand-building metrics.
Speaking at Future TV Ads on Thursday, Total Media’s head of broadcast, Liz Duff, said a significant challenge planners face is that it is near-impossible to trade on an outcome that might take a year or two to see – especially as client budgets shrink and they are forced to deliver quick results.
“Yes we should definitely be measuring effectiveness and brands are right to be saying ‘I need to know how effective my media is’, but particularly with TV, a lot of it is a very long-term measure and you can’t trade on something that’s going to take 12-24 months to see an outcome from it,” Duff said.
“You can plan on it, but I don’t think you’re going to reach a place where you’ve got a model that is 100% traded on an effective price.”
However, Rick Mandler, ABC Television Network Sales’ VP strategy and digital media advertising, disagreed and said the industry has already shown it can be done, citing a recent Thinkbox, Ebiquity and Gain Theory study which found that TV advertising generates the highest return on investment of any media and is the medium most likely to create advertising-generated profit both in the short-term and the long-term.
“Maybe this is naïve of me, but it seems to me that if we optimise for the long-run, the short-term ultimately takes care of itself,” Mandler said, using Amazon as an example of a business that has done this successfully.
“There may be some pain of optimising for the long-run if it leaves us diminished in the first couple of years but if we’re optimising for the long-run then we’re ultimately optimising for brand health and sales, and that’s the goal, right?”
Duff said while this might be true, it fails to take into account the reality of the economic situation of many of her clients; and the reality is clients are seeing their budgets squeezed.
“They of course care about the long-term brand effects and they understand that longer-term model,” Duff said.
“But there are situations where the economic reality is that you need to drive the short-term in order to secure budget or the success or length of your business. We have to be realistic.”
Another challenge for TV, Duff said, is that there is a disconnect between effectiveness increasingly being a part of the planning process but not part of the trading agreement.
“In the UK we’re trading off a TV market model that has been around for years and that is based on a TV market that isn’t in any way structured how it was when the model was set up, so there is definitely a disconnect there,” she said.
“I think it’s going to involve a massive shift to the whole market before we can actually start trading on effectiveness because of the way the TV market at the moment is priced.”
