In early 2016, eMarketer (among others) predicted 2017 would be the first in which digital ad dollars actually surpass TV. Later, eMarketer revised its forecasts because that milestone was actually reached in 2016. The research firm estimates US digital ad spending hit $72.09 billion, while TV ad spending hit $71.29 billion, just shy of digital. In 2017, expect that gap to widen.
But advertisers are increasingly looking to bridge the screens in their marketing campaigns: the digital screen – increasingly that’s a mobile screen – and the television screen. That’s because the old TV set still offers the best reach, while the smaller, personal screens offer up the best targeting, interactivity, and data.
Somehow, marketers need to take the best from both worlds. Not surprisingly, cross-channel and “omnichannel” approaches to marketing was a big topic at CES earlier this month, as brands are struggling to deal with increased fragmentation across devices and platforms, coupled with the stark drop-off in ratings witnessed last year in the US for linear TV programs. Instead of running multiple siloed campaigns across the different channels, brands are looking at consumer-first or audience-first campaigns that tailor marketing messages to fit the device and platform, but are still consistent across channels.
Here are some of the key takeaways and trends for advertising we’ve gleaned from the advertising crowd at CES that relate to evolving understandings of how to engage with consumers and where ad dollars are best spent.
1. Premium inventory is still scarce. As marketers rushed to place more and more ad dollars into digital, demand for premium inventory ramped up faster than online content creators could keep up. But just because there’s more advertising opportunity in the digital space, that doesn’t mean there’s more premium inventory. With data-targeting, “premium” now means something different to each brand – but it’s still scarce.
2. There’s a sweet spot between reach and targeting. The infusion of data into digital advertising platforms, and the excessive hype around data-driven targeting has presented to marketers some interesting decisions around how to value reach over audience targeting. The more targeted the advert, the less reach it’ll get; but lack of targeting – especially in the digital world – is a major turn-off to consumers. Depending on the brand and its marketing goals, there’s risk of over-targeting and under-targeting.
3. Addressable TV will gain steam in 2017: There’s a spectrum of opinion as to whether 2017 will be a breakout year for programmatic media planning in the traditional TV space, but experts at CES this year seemed to agree that addressable TV is gaining momentum – driven by marketers demanding more digital-like targeting and tracking capabilities, and the US’s crumbling pay TV industry, which has helped to spur interest and investments in addressable TV advertising technologies from pay TV service providers like AT&T, Comcast and Cablevision. Still, addressable TV households only number in the tens of millions in the US.
4. Mobile is the place for hyper-targeted, personal and interactive advertising. Prevailing wisdom at CES this year was that the mobile screen is the most personal screen a consumer uses. But opinions diverged on how marketers should advertise on the device. Some said mobile advertising should be interactive, and more precisely that consumers should have the opportunity to opt-in to ads that may or may not be considered intrusive on the personal screen. Others argued that data-driven personalization and location tools can help marketers facilitate a meaningful interaction between consumer and brand – if done right.
5. Finally, and perhaps most importantly, streaming TV platforms need to curb ad frequency problems. Ad-supported video platforms like Hulu or Crackle, or even on a TV Everywhere platform from a traditional TV network, are in a precarious position. For one, platforms still struggle with ad load delays, buffering and resolution drops. But even when an ad plays perfectly during a commercial break on a streaming TV platform, there’s still a risk that the ad playing for the viewer during the first commercial break will be the same ad to play during the next break, and the next, and the next.
As one expert humorously put it: “You want to stick an ice pick in your ear when you get the same ad multiple times during a half hour program. You write down: never buy this product, ever.” This issue is the result of ad sellers trying to deliver the impressions they’ve guaranteed to buyers, coupled with the extreme complexities of managing advertising in a digital, on-demand world, and the consequent lack of human oversight.
But consumers don’t care about any of that. And with an increasing intolerance among viewers for advertising interruptions while watching content, and growing premium sources for ad-free binge-watching, it’s an issue that’ll need to be addressed if the traditional TV networks are to preserve any semblance of their advertising-supported business models as they move towards the Internet TV future.