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Still Televised

The Revolution: Still Televised

Reports of the death of TV advertising have been greatly exaggerated.

THIS JUST IN: Television isn’t dead yet. Film at 11! You’ll of course have to sit through the commercials — but in this case, that’s kind of the point.

You see, contrary to the widespread belief that digital media is unstoppably ascendant, TV advertising is projected to keep pace, more or less, with its digital counterpart through 2020.

The year 2016 was the first in which total digital-ad spending surpassed that of TV. That’s an inflection point, for sure — but the mass exodus of ad money to digital media isn’t happening quite as fast as digital evangelists would have you believe. Despite all the hype about cord-cutting Millennials and the growth of OTT platforms such as Netflix and Hulu, their effect on linear TV hasn’t been as significant as many imagine.

This migration’s surprising foot-dragging is due partly to the inertia of advertising, an immense and tradition-minded (not to say hidebound) industry, trying to adapt its business model on the fly. Even so, many of the most sophisticated, data-driven marketers maintain that TV is still the most effective medium for their money.

I write this not as a blinkered TV ad executive, mind you, but as someone who has spent the last quarter-century in AdTech, evangelizing these same trends. We all bought in, and why not? TV was a gigantic, almost oafish target for all of us. Our digital David would take down big, dumb TV Goliath with ease. Right?

Well, sort of. Ad dollars’ migration to digital — with its precise targeting and reliable measure of campaigns’ impact — does continue, regardless of its escape velocity. To this end, I had an eye-opening, perspective-altering experience a while back.

A few years ago, I was busy opening the Los Angeles office of a company called Ampush, one of the first firms to focus exclusively on social media to drive measurable revenue growth. Ampush was a true social pioneer, yet the CMOs of some of our biggest clients — Dollar Shave Club, game developer Supercell, direct-marketing business Guthy-Renker — were unanimous: TV was still the champ. No medium could capture attention and drive legitimate growth nearly so well.

Digital advertising’s inherent complexity and occasional chaos — that goat rodeo we at Plush Digital are always going on about — is engendering some blowback, too. “We bombard consumers with thousands of ads a day, subject them to endless ad-load times, interrupt their screens with pop-ups and overpopulate their screens and feeds,” said Marc Pritchard during his keynote address at the 4A Transformation conference in L.A. early this April.

Pritchard knows whereof he speaks; he’s chief brand office for Procter & Gamble, the biggest advertiser in the world. “We’re awfully busy, but all this activity is not breaking through the clutter,” he added. “It’s just creating more noise.” (The late Irving Penn, the legendary fashion and commercial photographer, once did some TV ad work but bailed on the medium quickly, dismissing it as “too goddamn chaotic.” He’d surely say the same about modern digital advertising.)

The fact is, Americans still watch a lot of traditional linear television — 27 hours of live TV a week, according to Nscreenmedia. This too is changing: Time Americans spent watching live TV fell 4 percent year-over-year in the second quarter of 2015 — that on the heels of a 5.7 percent decline one quarter earlier.

In the last few years, the line dividing linear TV and digital has blurred; brands are shifting away from the everything-in-its-silo analog-versus-digital approach of the recent past. Smart marketers are fighting hard (armed with AdTech data) to break down the internal walls responsible for waste and inefficiency. Instead, they’re building truly holistic marketing organizations that know how to thrive in a multichannel, multiplatform world.

They’re all chasing an elusive concept called Multi-Touch Attribution. Here’s the level of insight that’s now possible: MTA enables marketers to see both the specific and relative impact of distinct platforms. It’s a neat trick. Did someone see a promo video for a product on Facebook, then use Google to search for and buy it? MTA helps assign proportional credit to different marketing channels when two or more of them play a role in influencing a sale.

Spare a thought for these besieged marketers. They’re overwhelmed with data and choice, and pummeled by aggressive AdTech salespeople, each of whom is selling the next great breakthrough in digital advertising. The marketers need to learn, so they can’t shut their eyes and ears to all of it — but there isn’t enough time in the day to comprehend it all.

This, in the end, is why large marketers are increasingly moving away from large agencies in favor of smaller, nimbler firms that can help them navigate these uncharted waters and build true MTA systems. Only then will they be able to buy media efficiently and objectively across all the primary channels. Will that be the day television advertising finally loses out?

I think not. What’s likelier is that TV will evolve into a hybrid medium that integrates the best of both analog and digital. Its unparalleled ability to spark emotion and tell a story, combined with digital’s rigorous analytics, is a killer combination. This evolution, in fact, is already in motion in the form of a nascent concept called “Programmatic TV” (which I’ll discuss extensively in an upcoming post). For now, though, anyone who tells you that Programmatic TV is ready for primetime is putting one over on you. (Hulu is the exception that proves the rule. Maybe.)

A critical development in the evolution of Programmatic TV will be if Netflix ever decides to start taking advertising. CEO Reed Hastings is adamant he won’t, but Netflix shareholders will ultimately force his hand. He wants to expand globally, after all — and most people in developing countries don’t have the wherewithal to pay 10 bucks a month (or anything close) for a binge-watching service.

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