Tuning into TV’s opportunities

Beyond some of the more serious implications of the pandemic, it’s also massively impacted our habits, our movements, our ways of living.

This in turn, has had a ripple effect on the media landscape – from advertiser’s confidence to spend, to the way in which we consume media; and TV has been no exception to the disturbance.

TV consumption has been dropping at a significant rate over recent years. And whilst we’ve seen a rise in Broadcaster VOD consumption, it doesn’t fill the hole left by linear TV’s decline, as is clear in the below graph. Think about your own TV habits and this probably rings true! Well, excluding lockdown that is… Don’t know about you but we’ve never watched so much Phil and Holly during the day.

All Audience Viewing:

This downwards trend in linear TV has been particularly prevalent when looking at younger audience’s consumption habits, with 16 – 34’s watching nearly as much Subscription VOD in 2019 as they did Live TV.

16 – 34 Adult Viewing:

This, paired with TV’s supply-demand pricing mechanism, means that year after year, CPTs have been rising. For example, 16 – 34 Adult CPTs have risen by 30% from 2016 to 2019, and before the pandemic this was set to keep rising.

Although we know TV delivers one of media’s best ROI’s and elevates brands to the next level, it’s been increasingly challenging to justify TV with viewing down and pricing up, particularly for those brands who want to target a younger audience.

However, come March 2020, with people sat at home in front of the box and less revenue in the marketplace, TV pricing did a 180°. Throughout lockdown, All Audience CPTs were reporting YOY declines in pricing – between 40-50% less in fact! I’m hesitant to use the word unprecedented, but it really was, and the impact was so widespread it was unlike anything the marketplace had previously seen.

Monthly Adult CPTs 2016 – 2020:

For advertisers whose businesses still warranted them to be on air, it was the perfect storm. Viewing was through the roof, pricing was down and broadcasters were adding free airtime value left, right and centre.

Clients who had gone on air at this time reaped the rewards; not only was it the some of the best value we’ve delivered, but our clients also got their best results. Being nimble and reactive to the market afforded them more than double the inventory and proved hugely successful for their businesses.

Looking ahead to the rest of 2020 and into the new year, whilst broadcasters remain optimistic that pricing will return to pre-March levels, the likely impact of increased viewers watching TV and subdued demand is more than likely going to keep cost savings in TV. And those who can be reactive and get on air quickly will benefit from the best deals.

Plus, an abundance of campaign bookings and airtime inventory have been deferred from earlier in the year and that revenue gap needs to be filled, so broadcasters are as keen as ever to get new to TV and lapsed TV advertisers on air and are offering a range of incentives in order to do so.

Below are a handful of our top picks of broadcasters’ incentives:

ITV Business for all:

  • ITV’s support for new and lapsed brands offers a powerful incentive to advertise in 2020.
  • They will match first airtime and VOD budgets of 2020, to extend exposure and effectiveness. E.g. for an investment of £100k net, a £200k campaign will be delivered.

Channel 4’s greenhouse fund:

  • This new initiative will offer small and medium sized businesses that have never advertised on TV before match-funded commercial airtime across Channel 4’s portfolio.

Sky’s linear airtime deal:

  • Unlike other broadcasters, Sky are offering incentives for new to TV brands even if they do not commit budget exclusively to them.
  • For brands committing 50% of new TV budget to Sky, they will offer 20% additional value. For brands committing 100% of new TV budget to Sky, they will receive 40% additional value.

Sky’s Adsmart/Advance deal:

  • Sky are also offering additional value to all new brands that spend on AdSmart or Advance in 2020. This is 10% for spend under £50k, and 15% for spend over £50k.
  • This will be especially effective for brands that can benefit from more granular targeting capabilities which are otherwise not possible on linear.

The added value gained during this time has been no more so prevalent than with those in the e-commerce sector. With more of us working, shopping and just generally being at home than ever before, our living rooms are becoming our new shops.

Each day the average person spends around 40 minutes browsing the internet whilst watching TV, so the potential purchasing opportunities of second screening here are huge. And not only does TV serve a long-term brand role, it also creates 62% of all short-term profit and has the highest efficiency versus all other media channels. That incentive means that online businesses are now by far the biggest investors in TV.

TV Investment Categories:

So, in summary, 2020 is a TV buyer’s marketplace and broadcasters are open to their most incentivised commercial deals yet. Online and e-commerce businesses have always had a strong relationship with TV, but our habits changes in 2020 have accelerated this even more so.

As an advertiser, particularly those with online purchasing opportunities, now is a great time to start considering or picking back up your TV investment and taking advantage of the volatile TV marketplace. And if you want to know more about how your brand can make the most of current deals and opportunities, you know where we are.

Written by:

Kathryn Bean Media Account Director

Category:

What we think

Date:

20/10/2020

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