Television Advertising: Destined For Eternity?

Walker SmithMay 2, 20138 min

The category killer of advertising was invented a long time ago. It still rules. It’s called TV.

One of the longest-running predictions in the history of marketing is the death of TV, a prediction that has been wrong decade after decade. TV has enormous staying power.

TV’s death knell chronology is instructive. From the very outset of broadcast TV to this day, lowest-common-denominator content and consumer resistance to advertising have been proclaimed as nails in its coffin. Remote controls were going to kill it by ending attention to ads. When I was a neophyte researcher in the early 1980s, cable was heralded as the end of networks and thus the end of TV as we knew it. The next batter-up as TV killer was videotaping. After that, pay-per-view, premium cable, satellite TV and videotape rentals.

By the late 1990s, the Internet was in full flower, with streaming and small screen videos being touted as the end of TV. Next up was video games, especially because it took away young men. Then TiVO. Then piracy. Then online video. Then DVRs. Then smartphones. Then cord-cutting.

On and on goes this belief that TV has hit the wall. But take another look at this chronology. What you see is not the emergence of TV killers but, instead, the evolution of TV. TV evolves. The business model of TV has gotten more complex and more sophisticated over time. TV is a robust medium unique among other media in its ability to morph its content and sources of revenue to stay current.

Henry Blodget of Business Insider wrote last year that TV would crash into a wall just like newspapers because of fundamental, underlying changes in consumer behaviors that have antiquated its business model. Blodget warned that newspapers looked great until the very moment they went off the cliff. That, wrote Blodget, is why the current success of TV is not a relevant guide to the future. But Blodget is not clear on what he means by TV because TV is not, nor has it ever been, any one sort of content or business model. TV has always responded to shifts in its competitive environment by changing. It will do so yet again.

In fact, when pressed, Blodget thought better of his hyperbole and disavowed it.  In his original piece, he wrote, “Those who said that newspapers were screwed were dismissed as clueless doom-mongers, at least by newspaper executives…[But] newspapers were screwed.  It just took a while for changing user behavior to really hammer the business. The same is almost certainly true for television.” Yet, in his follow-up to that piece, Blodget walked back from his hard line to just a step away from reversing his original conclusion, to wit:  “TV is not going to disappear, just the way newspapers haven’t disappeared. But it just defies common sense to think that the huge change in user behavior over the past decade won’t ultimately hurt the TV business.”

Blodget’s follow-up, not his original claim, is closer to the truth. But what Blodget characterizes as ‘hurting’ TV is really nothing more than the evolutionary essence of TV that has been true throughout its history. This is what differentiates TV from newspapers. A medium with little history of content and revenue evolution is absolutely doomed in today’s digital universe. But that’s not TV.

The biggest flaw in contemplating TV’s demise is one key question. What’s the alternative?

Newspapers are not a good analogue for contemplating the future of TV. Newspapers lost their audience and rate base because the Internet gave rise to better ways of serving newspapers advertisers. Classified ads, in particular, are simply better done online by Angieslist.com or Craigslist.com. These are direct substitutes. The need for the advertising that was done historically by newspapers didn’t change. What changed was the emergence of a direct substitute to meet that advertising need. There is no such substitute for TV.

Two things can be said about this. First, it is often noted that if there is no audience for TV, it doesn’t matter if there is no direct substitute for TV advertising because nobody wants anything of that sort.  Second, many argue that it is only a matter of time and a technological innovation or two before a new medium emerges that will be a direct substitute. A quick word about each of these points.

With respect to the TV audience, it is certainly changing, and changing a lot. But for the most part this audience is just changing formats and times. Only a few are totally abandoning the TV content in which ads are placed. Indeed, this shift is no surprise because people always opt for greater convenience, as noted in a prior post about innovation. Adapting to changing behaviors and a preference for greater convenience is what TV has always done so well, which is what TV is in the process of doing right now.

TV producers have already reworked both content and ads to accommodate multi-screens. But note that it’s TV at the center of this nexus. New devices and new ways of connecting, especially social media, are used to amplify TV and build upon the TV platform, not the other way around.

Certainly, new media have given rise to unique content. Twitter novels are one example; vlogs are another. But in the several years that this sort of innovative content has been around, not only has TV continued to thrive, TV producers have found ways to use such innovations to enhance TV content. Additionally, TV producers have even created popular new TV shows that highlight or repurpose digital content, not to mention developing new ways to distribute and sell TV content.

TV has always been an agile medium. It is no less nimble today, which is why it is moving forward with new media rather than, like newspapers, in competition.

As for time and new technologies, there is another flaw in the thinking around the future of media. Such speculation almost always focuses on non-TV innovation and rarely on TV innovation. But it’s not as if all the new stuff is only happening with TV.  New TV technologies are just as much a part of today’s scene as new non-TV technologies. Plus, TV itself is enhanced not displaced by innovations in digital and Internet media.

TV is not standing still. This is another contrast with newspapers, which made only sporadic and inconsequential attempts to stay on the cutting-edge of technology. TV has a long history of evolving its delivery, technology, content, interfaces and advertising formats in order to adapt to new innovations and changing consumer behaviors.

In fact, the biggest development in media is not the Internet but Internet TV.  Rather than squaring off, the Internet and TV are coming together. Apple, Microsoft and Google are battling for the lead in this arena. Obviously, this will be TV in a new format, so it won’t be TV as we know it today. But TV as we know it today is nothing like TV ever was in the past. What has always been true of TV is change and modernization not stasis and repudiation.

However, all of this begs the question the most important question. What is TV?

If TV endures because it evolves, then what is the essence of TV that is being carried forward? Or does the continual evolution of TV betray the lack of any real identity?  Is TV just a revenue model and not really a singular medium?

The answer is found in the way that TV as a screen of content connects with people. To understand this, think of the traditional brand marketing purchase funnel. TV works at the top of the funnel. TV aggregates eyeballs like no other medium ever, so it is highly efficient at creating brand awareness. TV engages viewers emotionally like few other media, so it is highly effective at building emotional engagement for brands. TV captures attention when people are in the mood to be entertained, distracted or informed, all storytelling moments, so it is the best medium ever for communicating positioning stories to consumers. All of these things take place at the top of the purchase funnel. Other media connect here, too, but TV does it best (along with magazines).

At the bottom of the funnel, digital media have proven far more effective than traditional media. For example, search ads are the best way to connect with people when they want something specific, and thus search ads have diverted marketing dollars spent to close the sale. But search ads only work if consumers are searching, which is to say that search ads are great at converting active interest that gets to the bottom of the funnel but poor at energizing latent interest or creating new interest at the top of the funnel.

Put TV together with digital media and brand marketers have the entire purchase funnel at their command. But only deploy digital media and brand marketers are leaving money on the table because they are capturing no more than what trickles down rather than boosting the flow through the funnel.

The final thing to note about TV, and maybe the most important, is that whatever formats or times people select, they want to watch TV. This is worth repeating. People like TV content. People like watching TV.

Nielsen figures show TV viewing unchanged over the past several years, and an in-depth look at these viewing figures belie many of the statistics cited as evidence of TV’s demise. For example, hours spent watching TV always skews older, making it no surprise that point in time studies show a weakness among younger consumers. Similarly, people are choosing many new ways to watch TV content, making it no surprise that as new forms of purchase, subscription, ownership and viewing rise, others decline.  Additionally, people are using more forms of media these days, often simultaneously, so the rise of new media usage does not presage or predict the decline of TV usage.

Brand marketers are not unaware of the staying power of TV. Spending on TV advertising is strong and growing.  It’s clear that brand marketers don’t need much convincing about the power of TV. But with all the change stirring the pot these days, they just need some reassurance.

So rest assured, the category killer of advertising is still around. It still rules. It’s called TV.

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