Tuesday, December 01, 2020

Can TV ads make the jump to a digital world?

     Since the beginning of time (or at least network TV), brands large and small have advertised on television ranging from smaller cable advertising buys to million dollar Super Bowl ads. Reach was a huge advantage provided by television as huge numbers of individuals watch. There was also some ability to target specific customers using demographic ratings and targeting programs that are more watched by your preferred demographic. As digital ads have risen in popularity bringing the ability to hyper-target customers, the appeal of TV advertising has begin to fall.

     Earlier this month, Nielsen announced that it had partnered with Vizio and other smart TV manufacturers to allow tracking of over 55 million televisions at the zip code (in some situations household) and individual ad level. This increased tracking is expected to raise ad rates due to the more precise targeting and success tracking involved. What this does not address is another big problem that TV advertising (and to some level digital advertising) grapples with. For a digital ad, you can track immediate clicks and purchases and use that to better gauge effectiveness of your add. While this change in TV advertising is positive it still does not address the issue of calculating ROI that advertisers face since they can't connect TV impressions to sales. Based on this, I foresee a short-term bump in advertising rates for TV advertising due to this Nielsen trend but a long-term shift to digital advertising and TV streaming advertising (which has similar problems to this new system but allows even more hyper targeting).  

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