The good, the bad and the ugly: I Love Ugly founder Valentin Ozich opens up about the brand
It’s been nine years since mens' clothing label I Love Ugly shook up the fashion scene in New Zealand and since then, there’s been highs ...
Digital media has seen massive growth in recent years and the digital players have waged a fairly successful PR campaign to extol their own virtues and call into question the power of traditional forms of mass media. When it comes to TV, viewing habits are certainly changing, but the stats show that it remains by far the dominant medium in most developed markets. Erin McKenzie explains why the reports of TV’s death are greatly exaggerated.
Like a stand-up comic taking his show from town to town, Mark Ritson, adjunct professor of marketing at the Melbourne Business School, took to the stage at a MediaWorks’ presentation in February to deliver one of his favourite gags, a muted two seconds of Gone with The Wind across half the screen. The point being that in the digital world, videos are reduced to practically nothing, with views counted as watching for two seconds. How can that compete with TV, he asks? To him, it can’t.
In the past year, both Ritson and Bob Hoffman, AKA The Ad Contrarian, have visited New Zealand, thanks to MediaWorks and TVNZ, arguing that the reverence marketers and agencies have for digital is misplaced and that TV remains very much alive here and around the world. And while there’s no doubt digital is growing and there’s more content vying for attention, any argument that TV is dead is, according to Ritson, “a total and utter misrepresentation of the truth”.
And that truth becomes clear when considering 3.5 million New Zealanders aged 5+ watch TV each week and of those viewers, the average time spent watching broadcast TV is nearly three hours a day. Putting that into a percentage, that’s 84 percent of New Zealanders being reached every week by live and time- shifted TV.
Besides the TV set, Nielsen data shows the most popular devices for watching video content across a week are desktops/laptops with 39 percent of New Zealanders aged 10+ using them a week, smartphones with 27 percent use, and tablets with 18 percent use. With numbers like these, a 2014 Business Insider Australia article headlined ‘The Era of TV’s Media Dominance Will Come To An End in 2016 – Here’s The Evidence’, seems to have hired a dodgy fortune teller. Its ‘evidence’ was the intersection of digital ad spend taking over TV ad spend. However, does 84 percent of New Zealanders being reached by TV each week sound dead? Yes, 3.5 million New Zealanders is less than the previously measured 3.6 million, but at this rate of decline, Ritson says it’ll be
a number of years before any online video platform takes the crown.
“Some people are definitely watching less TV, no question. But TV, as you travel around the world, is between 80 and 90 percent of all video. We’ve got about 15 years to go before
it even gets interesting, and I don’t know any marketer interested in anything other than the next 12 months,” Ritson says.
“The dominant medium for New Zealand in 2017 will be television. Don’t worry about the long-term provenance of TV for your brand. What I’d be worried about is your digital video spend.”
One of the biggest displays of faith in TV is The Super Bowl, with over 111 million people tuning in this year, a number that’s been steadily growing since 39 million people watched it in 1967. That growth has also been seen in ad spend, with a 30-second ad coming in at USD$5 million this year compared to the USD$42,000 charged in 1967. And that’s not including any of the extra dollars brands forked out for promotions relating to it. Over the past few years, a trend has emerged of teasers and pre-release videos appearing online before the television event, which show how the ads have become more than just a promotion of a product. This year was no different as brands used the opportunity to show their support for diversity in the wake of president Donald Trump’s proposed passport and immigration bans. AirBnb, Google and Audi took on anti-Trump topics alongside Budweiser, which saw its video supporting immigrants spark #boycottBudweiser, that went viral with Trump supporters. If turning people o beer on Super Bowl day doesn’t show the power of TV, we don’t know what does.
It makes sense for marketers to upskill and learn how different mediums work. But it also makes sense to look at the numbers. Across the ditch, where 86 percent of Australians in metered markets watch broadcast television, including free-to-air and subscription channels, each week according to The Australian Multi Screen Report.
The report also shows TV makes up 86.5 percent of Australian’s video viewing, while PC/laptops make up 7.2 percent, smartphones 3.7 percent and tablets 2.6 percent.
In the UK, TV – live, playback or on- demand – had a 76 percent share of all video viewing in 2015, with audiences watching an average 3 hours and 51 minutes of TV a day. And that time spent watching was only one percent lower than 2014’s viewing according to marketing body Thinkbox.
While the above numbers look at the platform across a year, audiences tend to inflate when disaster strikes or there’s an event of public interest. People still gravitate to the TV for information. And looking back at recent events, there’s possibly no better time for TV’s strength to prove itself.
According to the Pew Research Centre, during the US election, TV proved the most common platform for learning information, with 78 percent of US adults tuning in compared to the 65 percent who used a digital platform. Overall, 54 percent of voters said they got most of their campaign news from television.
Meanwhile, in Australia, the Rio Olympics saw TV play a dominant role in the audience’s consumption of the event. According to its own data, 20.7 billion minutes of the Olympics was watched on TV, while 325 million minutes of it was watched digitally and 68 million minutes on social media platforms.
“When was that the death of TV?” asks Ritson.
Further busting the myth is the fact advertisers continue to invest heavily in TV.
According to Standard Media Index (SMI), 2016’s spend made through the top 15 media agencies saw $385.7 million go to television. While it was a drop from 2015’s $406 million, it remained higher than the $305 million spent on digital in 2016 – and that’s despite a 22 percent growth for digital.
Meanwhile, in America, TV spend saw a 4.4 percent increase in 2016, with some brands that had once reduced TV spend, increasing it. SMI’s 2016 Ad Spend Summary shows Target had reduced its TV spend by 20 percent in 2015 but increased it by 12 percent in 2016. Paramount Pictures had also previously reduced its spend by 3.8 percent, only to increase it by 24 percent in 2016.
As for the predictions, PWC’s Media and Entertainment Outlook estimates it will grow at a 4.0 percent compound annual growth rate in New Zealand, which will send it to a new peak of $748 million in 2020. Terrestrial TV advertising revenue will continue to dominate, taking 76.4 percent of total TV advertising revenue in 2020. While this is down slightly on 2015 as multichannel TV advertising revenue expands at a slightly faster rate, terrestrial TV advertising revenue is still expected to pass pre-recession levels to reach a new high of $541 million in 2020.
Carat’s Adspend report, which surveyed 59 markets, suggests TV ad spend will show 2.3 percent growth in 2017 and TV will continue to hold the highest share of the estimated US$570.4 billion media spend at 40.3 percent.
While the numbers speak otherwise, TV has certainly has its challenges. And one of them is that it is often lumped into the dreaded ‘traditional’ grouping, while digital is seen as the new, cool kid and, so, gets a lot of the attention. But Ritson, and many others, have warned advertisers and marketers against thinking they’re normal.
Last year, a study by Ipsos sampled British marketers and compared their behaviour and predictions with actual consumer behaviour. As Ritson said: “Consumers and marketers have very different levels of social media activity and that translates into a very skewed view of consumer behaviour.”
One of the supposed benefits of digital is its younger skew and the ability to target very specific, relevant audiences. Appealing to the right demographics is a core part of marketing, but hyper-targeting has started to be questioned by some major advertisers, including Proctor & Gamble, which admitted it had moved too far in that direction at the expense of mass reach. And one of the problems with targeted ads is the potential for valuable, yet unconsidered customers to fall through the cracks. Hoffman made mention of this during his visit in 2016, when commenting on advertisers’ obsession with young people, despite their lack of spending power.
“In fact, in the States, over half of all consumer spending is done by people over 50, and people over 50 dominate almost all major consumer product categories, food, and automotive, and personal care, and home furnishings, and yet they’re the target for only ten percent of marketing activity,” he pointed out.
In New Zealand, the over 45s represent a $23.5 billion spend opportunity. And when 81 percent of over-45s in New Zealand watch linear TV every day, be it live or time-shifted (according to NZ On Air), it’s easy to see the appeal.
But even without considering a specific age group, Hoffman sees TV adverting as the best method to drive demand. He considers the internet a complementary platform to fulfil it. He compares the internet to The Yellow Pages, saying TV creates a desire for pizza, and The Yellow Pages provides the number to order it.
It’s a belief supported by Thinkbox’s finding that shows 69 percent of website visits are generated by paid media and of those website visits, 47 percent are generated by paid TV media.
That ability to generate demand is in part due to the attention being paid to TV and the quality of the ads that run. There is still no better way for marketers to convey emotion than through video, and no better way to reach a big, engaged audience than through linear TV. You only need to look at the rush for space around major events like The Super Bowl to see that (see sidebar).
FCB Media’s head of strategy Rufus Chuter summed it up in 2016, when he said: “Audiences are not fleeing, they’re just not as concentrated as they used to be. People may be skipping and watching content that isn’t ad-funded, but the big screen in our living rooms still has an unrivalled ability to galvanise the nation and shape culture.”
Many major advertisers know that entertaining the audience is a good way to enhance their brand and sell products, and local companies like Spark, Air New Zealand, Lotto and many others have all showed their faith in storytelling on TV.
In 2016, Lotto’s ‘Mum’s Wish’ ad told the story of a mother who won the Lotto, only to bury the winnings for her children to find after she passed. At the time of its release, DDB chief creative officer Damon Stapleton said he believed in storytelling because the one thing you want from people is their time.
“And a lot of advertising today doesn’t give the viewer anything in return. And what we try to do is make pieces of work that give the viewer something beyond just information.”
Rather than rely solely on advertising, Kiwibank recently worked with TVNZ and production company Ruckus to create a primetime TV show called Mind over Money. And the host Nigel Latta said that TV still has the power to create the water cooler effect.Latta said that TV still has the power to create the water cooler effect.
“I know there’s all this conversation about digital and everything is online, but the digital world is incredibly fractured. I think that’s the difficult thing – particularly if you’re a brand. If you want to talk to a large audience of people, it’s still on TV. TV is still where you find this large count of people. Yes, the online world is increasing, but it’s 200 views here and 100 views here. It’s hard to compete with hundreds of thousands of views. TV is still a good medium. It’s still alive.”
Possibly the most ironic display of TV advertising’s continued strength is the investment Facebook, Google and other tech companies put into it. In 2013, Google spent 78 percent of its marketing budget on TV. And in 2015, Facebook invested £10.8 million into the platform in the UK.
But they aren’t the only online platforms using ‘traditional’ TV ads to create demand. According to Thinkbox, online businesses invested £639 million in TV in the UK in 2016, up eight percent from 2015, and that helped send TV advertising in that market to its highest ever level.
Both Google and Facebook have said TV and online are complementary mediums. But when the figures were released, the chief executive of Thinkbox Lindsey Clay simply put the increased spend down to TV’s unparalleled ability to reach and connect with audiences.
“TV advertising works, it works better than anything else, and it works for all budgets. Nothing else has TV’s reach, scale and connection with audiences; no other form of advertising is as trusted. Advertisers of all sizes, from global technology companies to local businesses, know this and have voted with their investment. Online businesses, in particular, recognise the impact TV advertising has and have significantly increased their investment recently.”
But all this is not to say TV is putting its head in the sand about digital. All the broadcasters know that viewer behaviour is changing, but they have responded accordingly, offering viewers new ways to watch ad-funded content for free. And in this area, free-to-air broadcasters also do very well.
Nielsen figures show TVNZ OnDemand was on par with YouTube with 29 percent of online New Zealanders 15+ having used the platform, while ThreeNow has the same use as Netflix with 13 percent.
By channeling programmes online as well as on linear TV, New Zealand broadcasters are showing just how adaptable the platform is and how it understands its audiences. To quote, Hoffman, who was quoting Thinkbox, “TV isn’t dying, it’s just having babies.”
It’s been nine years since mens' clothing label I Love Ugly shook up the fashion scene in New Zealand and since then, there’s been highs ...
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