As we know, traditional TV advertising remains an efficient but imprecise means to reach mass audiences. While TV viewing remains significant across all demographic segments, it is clearly concentrated among heavier TV viewers. And because TV viewing is largely and increasingly fragmented, it is difficult to effectively reach more targeted audiences.
The use of programmatic TV planning and buying to reach advertiser-defined consumer segments presents an opportunity to more efficiently deal with audience fragmentation, increasing the value of related TV advertising. Ultimately, the ability to target TV ads to specific households, or even individuals, regardless of what or where they are watching will make TV advertising as effective and accountable as it can be. While using TV to target specific audiences poses significant challenges in today's TV ecosystem, the value of doing so should not be underestimated.
As we have watched the progress of digital and the evolution of the media mix as a whole—many industry onlookers have suspected that TV viewing must decline with the ramping usage of digital devices and other screens. There has been a widespread assumption that households with Internet access do less traditional TV viewing. But one of the specific findings from a major behavioral TV research study we conducted at Visible World was that pay TV households that established Internet access in the past year are actually likely to watch as much or more traditional TV as other households.
Over the 18 month research period, 18,767 of the cable TV subscriber households observed added Internet service. Examining their anonymous TV viewing behavior found an increase of 5% in their amount of traditional TV viewing. This confirms that access to Internet service does not reduce the amount of TV viewing. In fact, it suggests that early adopters of Internet service were more likely to watch less TV to begin with. In contrast, later Internet adopters are more likely to watch more TV, and do just as much if not more traditional TV viewing after they adopt Internet service. Because the research examined anonymous household level cable TV subscriber and viewing data, it made it possible to assess the relative effectiveness of targeted TV ads. Based on 144 campaigns conducted by the cable TV marketer, the research found that ads that were on target increased the likelihood of a sale by 70%, compared to overall results across all campaigns. Such a finding should help further motivate cable and satellite TV operators to implement addressable TV ad targeting capabilities, which could then also become available to advertisers through the operators, and perhaps ultimately, through TV networks.
Overall, the research looked at the detailed TV viewing behavior of 245,919 anonymous households. Another notable finding is that affluent households (Claritas ConneXions segments Y1, F1 and M1) spend 17-24% less time watching TV than overall cable TV subscribers. On the other hand, less affluent mature households (segments M3 and M4) on average watched 7% more than overall subscribers. However, because these mature, less affluent segments make up a relatively large portion of the total U.S. population, they account for nearly 50% of all TV viewing.
Regardless of demographic segment, the research confirmed that TV viewing remains popular but is highly fragmented across a broad range of programming. It also revealed that despite differences in total time spent viewing TV across segments, the individual segments are far less distinct in terms of the percentage of the time they spend watching each of the various types of TV programming. Together, these findings imply that marketers using TV to target any well-defined segment are still likely to reach a wide spectrum of viewers, but with a larger concentration of their best potential customers.
Claudio Marcus is Executive Vice President of Marketing and Research at Visible World. Prior to joining Visible World, Claudio was vice president and research area leader for technology-enabled marketing at Gartner, the world’s largest IT research and advisory firm. Before becoming an industry analyst, Claudio’s experience included 15 years working as a database marketing consultant and marketing software entrepreneur, as well as a marketing and advertising agency executive. Claudio has a master’s degree from Northwestern University’s Kellogg Graduate School of Management, where he continues to be a guest lecturer, and authored of a chapter titled “The Reinvention of TV Advertising” for Kellogg on Advertising & Media (Wiley, 2008). Claudio can be reached at Claudio.firstname.lastname@example.org.
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