Grappling with the decline in traditional TV viewing, advertisers increasing look to agencies for answers
With his multi-decade background at NBC, CNBC and TiVo, Tom Rogers knows well that continued viewing declines in traditional television are a concern, with an 18% viewing decline since 2014, and on average a three percent decline each year since 1990.
“We are facing something really different today. One, the pace of decline is accelerating because of new sources," said Rogers, who is the executive chairman of WinView Games and chairman and CEO of TRget Media. He spoke at the recent Beet TV leadership summit on video advertising outcomes produced with Eyeview. "Because of Netflix, Amazon, etc. year-over-year there is a vast decline in traditional television viewing and it will accelerate."
He said there are very meaningful alternatives now like YouTube “which has reached 1 billion hours of viewing per day worldwide.”
With a level that exceeds all global traditional television viewing, addressable marketing is not completely understood by advertisers but is increasingly considered to be their best option. Roger notes that thirty years ago, data in the ad industry started on a rocky road and is still on that road. Further, the issue that lays at the heart of what was going on 30 years ago until today is commercial avoidance. With traditional viewing numbers in decline, and ad blocking at an all time high, this has led some advertisers to throw up their hands in frustration and cede that ground to their agencies.
“When clients want to know what people watched, what commercials they saw or didn’t see, what was the influence…that is a lot of pieces to put together. It is too complex for most advertisers to deal with, but to be frank, the agencies have an incentive to keep it complicated because it makes it more necessary for advertisers and brands to rely on them. And, the more you drive towards addressability, the less one spends. To be frank about it, the agencies are, for the most part, not the people with the greatest incentives to drive a more cohesive, integrated, simple approach to this,” Rogers said. “They kind of thrive on that complexity because it makes it more necessary for advertisers and brands to rely on them.”
On the TV sales side, as better targeting and addressability drive more efficiency and ROI, waste is removed but most likely less money will change hands. “And with less spending, those particular players in the equation have a harder time seeing how they win. There does not seem to be any end to giving people cheaper packages on some kind of commercial basis. They love their shows but will flee to find them elsewhere where it is less expensive. If we are going to break the back of traditional advertising, we are going to have to find targeting with efficiency and addressability. TV advertising is still the domain of traditional advertisers, but when you look at that we know this has to change.”