Why marketing budgets will be going back from digital to TV?
A couple month ago Google announced that their DoubleClick Bid Manager platform would enable brands to create TV ads, thus delivering TV ads of small/medium-sized enterprises and startups to a broader audience.
In the past, we had two main challenges with TV advertisement:
· Placement issues: targeting, creative testing, adjusting placement on the go.
· Non-specific effectiveness measurement processes.
Google made great progress in solving the first problem. As for the second one, solutions like TV Squared were developed in recent years that allow calculating the cost and amount of acquired users. DoubleClick Bid Manager Google, independent traffic analysis systems as well as the ability to compare the cost of users acquired from TV and Digital would cause a shift in the paradigm and marketing budgets would start flowing back to TV campaigns.
Digital is considered to be an instrument of limitless potential. It allows for detailed analysis, traffic channels effectiveness assessment, prompt tracking of customer’s actions and reactions to them. But it’s not without it’s flaws: using Digital makes it hard to estimate how channels influence each other. Multi-attribution modules were created to make this process easier, but they do not solve the problem completely.
Unlike TV, Digital does not allow for a quick and cheap way to attract large amounts of traffic.
According to a study by Accenture, 87% of smartphone/tablet owners use their devices as a second screen while watching TV. Google reports that 2/3 of smartphone owners go online to look up products they saw advertised on TV.
This makes for a deeper analysis of ads on TV and more detailed results: which program provides better conversion, which TV channels attract the most users and which creatives are the most effective.
Our own experience shows that while a TV ad is aired, 3 to 5 times more people open the application than usual during the same baseline.
Calculating the difference between the baseline and TV airings gives us the amount of customers and their cost with the smallest margin. We at Lalafo know the exact Customer Acquisition Cost (CAC), the ad and the channel that brought us the new user.
We also noticed that 90% of application visits happen within the first 5 minutes after a TV ad has aired and the TV ad CTR is usually between 0.1% and 2%.
CAC of TV ads is actually lower than that of online ads. During the last two years we started 16 ad campaigns in 7 counties, with a total of 150 ads featuring 12 celebrities. In all instances, we used both TV and Digital while comparing their CAC. The result was that one TV customer costs us around 1.5 times less than an online one.
Customers acquired using TV campaigns are better: they’re more active, they have better conversion rates and they become more valuable to us. Why? Because when people are watching a TV ad, they’re more involved than when they’re seeing the same ad online. The “second screen” effect (when the person uses a smartphone while watching TV) also has a role to play.
Better tools for TV advertisement analysis and convenient ways to purchase them, will cause the divide between offline and online to all but disappear. In the near future, TV will be viewed as another way to attract traffic and a cheaper one than online marketing.
