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TV is Not Dead, and Here’s Why
“Human beings are to independent thinking as cats are to swimming. We can do it, but we prefer not to.”
– Daniel Kahneman, behavioral economist
That doesn’t mean we’re inherently lazy. It does mean that we’re cognitively wired to take the easier way out when it comes to making everyday decisions — quick-and-dirty decisions based largely on emotional triggers and associations, or what “feels good”.
According to behavioral economist Daniel Kahneman, this type of thinking makes up the invisible majority underlying everyday decisions. The other, less frequently used option? Decisions based in rationality. So although we’d like to believe we’re rational beings, the neurobehavioral truth of the matter is we’re quite simply not.
Kahneman called these two types of thinking System 1 and System 2. And as much as we’d like to deny it, these systems play into how we decide where and what to spend our money on. It follows then, that System 1 thinking should be a brand’s best friend — if you can create a long-term emotional association in your customer’s mind, they’re going to choose you over an option that might be healthier, cheaper, or more convenient.
Enter TV Advertising
It’s still early enough in 2016 that media gurus and analysts are talking about which media formats and channels to watch this year. TV, unfortunately, isn’t one of them. To avoid beating a dead horse, the reasons traditional TV is being proclaimed “dead” are:
- People have moved from cable to on-demand and subscription models like Netflix, becoming “cord cutters”
- There’s been an overall shift to the mobile screen, reducing dependence on traditional TV.
- There’s a general resistance to advertising – ad blocking already threatens global advertising revenue from digital, and the fast adoption of ad blockers on mobile and desktop reflects an ad avoidance that will probably extend to other channels.
But data on TV ownership and cable subscriptions suggests that we’re hardly living in a cordless era where people opt out of cable entirely. 83 percent of US households are still paying for cable — a drop from 87 percent five years ago — according to a 2015 report by Leichtman Research Group. And TV still emerges on top in media consumption by device. The drop in TV ownership is further complicated by another social variable: poverty. According to this New York Times piece reporting a drop in TV-owning households in 2011 — the first of its kind in 20 years — the state of the economy in 1992, 2008 (and if current predictions are correct, the not too distant future) was a factor in households being TV-less.
So now that we’ve dispelled some of the panic around TVs disappearing from homes entirely, let’s revisit our friend Kahneman and the lessons he has for marketers trying to make a business case for not slashing ad budgets. With brands like P&G announcing savings of over $370 million in agency- and production-related costs, it’s not hard to see why big brands are being conservative about splashy TV ad campaigns. But there’s still a strong case to be made for why TV advertising should not — and most likely will not — be deprioritized.
Let’s recall that TV was second only to radio as a medium that significantly amplified a brand’s addressable audience. Digging into the findings from studying years of ad campaign data (courtesy of the IPA) yielded two big insights:
- Advertising is most valuable when it builds long-term brand value.
- TV is still the strongest brand-building medium to build long-term brand value and sales.
So then why does marketing care so much about the short-term?
Market research has a tendency to underplay the value of long-term emotional priming in favor of emphasizing short-term news. But that one great real-time campaign isn’t enough to drive sales or customer loyalty in the future. Sure, your email blasts reach tens of thousands of buyers. But we’ve already shown that it’s the multitude of new, or “light” buyers you should be looking to convert, not the heavy, frequent buyers — even if it means marketing to the masses.
IPA research found that it takes years for emotional campaigns to see positive impact. So why should you spend millions of dollars on TV ads that delight, entertain, and create conversation instead of just shifting your budget to content marketing, native advertising, and social media? Because the business effects of emotionally appealing, long-term campaigns build more exponentially, showing a rise in profits as brand salience goes up.
Brand salience is great, but fame is better
In a world where we’re saturated by content, emotional appeal wins, hands down. This campaign is more likely to make you tear up than a cutesy Snapchat video you’ll likely forget almost instantly.
According to the IPA, the most potent emotional campaigns are “fame campaigns” that don’t just make people feel differently about a brand, but also inspire them to share their enthusiasm on digital and offline channels. And it’s not just qualitative impact — there’s a pricing lift to be seen when emotional campaigns can inspire sharing all around.
Take Axe’s ad campaign over the last decade, ads which played on variants of the same theme – sometimes borderline sexist, but overall well-known — of men using various tactics to attract women (or, as the IPA report puts it succinctly, “the mating game”.)
Axe achieved fame by doing three things successfully:
- Maintaining a steady stream of innovative expressions of the same theme
- Using that commitment to theme to build brand salience over time
- Leveraging TV, the channel with broadest reach that would hit new buyers, instead of targeting specific audiences or existing buyers
So what’s this mean for my marketing budget?
It is admittedly getting harder to reach an audience whose attention span gets shorter every few years. With mobile as the second screen, ad recall becomes even harder when you can do several other activities on mobile during a TV commercial break.
But even with these variables at play, it’s not a good enough reason to leave traditional channels out of the equation when planning your media spend. It’s incredibly easy to fall prey to short-term metrics when evaluating the success of your creative, but some of the best brands have waited years to see the effects of their campaigns on sales and buyer loyalty.
What is key, however, is to control non-working media expenses — the money brands put behind producing creative, including talent and agency costs, legal, and asset creation — and getting more mileage out of your working expenses, or the cost to distribute your creative. This is essential to building your long-term brand presence (and a sustainable creative organization). Of the 300+ CMOs and VPs of marketing we surveyed last November, 45% of them felt that better internal creative processes could help control costs.
On the distribution side, we predict marketers will look to allocate working spend to leveraging new channels. Streaming and on-demand services like Hulu are bringing not just TV, but ads online as well (and getting around ad-blocking). The mobile-as-second-screen phenomenon means brands can get to viewers on the smaller screen, even while they ignore or mute TV commercials.
On the non-working side, invest in creativity, because that’s what it’ll take to stand out. Revisiting process is also key: rethink how you’re storing and sharing assets across your organization and with external agency partners, reevaluate those approvals processes so you’re not wasting time and money in compliance discussions, and overhaul those Stone Age training programs.
We’re not looking at a world of cord-cutters any time soon. So before you make a bid for that BuzzFeed channel, remember that a lot of the best purchase decisions are made in a moment of impulse: leverage that insight and your creative will hopefully speak for itself.