A Seismic Shift in the TV Ad Model is Coming

Led by huge brands like Coco-Cola and P&G, the ad industry is seeing the pendulum swing back to traditional broad-reach programming. 

Underpinning the massive ad disruption brought by the digital revolution was the idea of highly targeted reach. Rather than “wasting” dollars in traditional media with wide reach, advertisers were promised the idea of pin-point target on their exact niches, delivered via digital.

More and more, we are coming to realize that the myth of perfectly targeted ads is a digital unicorn. This reality, many say, is heralding a swing back to traditional TV for best reach and engagement.

“Recent headlines from two of the most important mass media clients, P&G and Coca-Cola, should be turning heads,” writes Brian Sheehan in Ad Age. “A few weeks ago, Advertising Age reported that Coca-Cola’s Chief Marketing Officer Marcos de Quinto defended TV as providing the biggest bang for Coca-Cola’s marketing buck. Coca-Cola’s data showed its TV investment ‘returning $2.13 for every dollar spent on TV, compared with $1.26 for digital.’ That’s a big win for a broad-reach medium that has had very few lately.”

What this likely means, Sheehan predicts, is “the precipitous decline of narrow low-engagement programs.” He cites market research from Nielsen that showed “that between 2011 and 2016, viewing of TV by 18-to-24-year-olds had fallen by more than nine hours a week. They stated succinctly that ‘In the space of five years, almost 40% of this group’s traditional viewing time has migrated to other activities or streaming.’”

This alternative media, consumed largely digitally, hasn’t panned out regarding successful advertising, and big brands are shying away from the niche and moving back toward mass reach on TV.  This could help TV evolve into its next iteration faster, with cable companies and networks being forced to keep up and deliver quality content that people want to consume and allow them to opt out of what they don’t want.

What remains to be seen is how this all plays out against Amazon, Netflix and other platforms that are creating content of their own. A battle over quality could ensue.

“In the end, P&G, Coca-Cola and those who will surely follow have given broad-reach TV programs a huge shot in the arm, but they have also sounded the death knell for the majority of lower-rated shows on TV,” Sheehan concludes. “The era of engaged reach will make traditional TV get to its future faster. And it is about time.”