8 ms·

TV Advertising

67 points by dforrestwilson 10y ago

markbao 10y ago
Mods should update the URL to https://stratechery.com/2016/tv-advertisings-surprising-strength-and-inevitable-fall/ https://stratechery.com/2016/tv-advertisings-surprising-stre...
- pboutros 10y ago
  Good time to post my list of favorite xkcd cartoons: xkcd.com xkcd.com xkcd.com xkcd.com xkcd.com xkcd.com (...)
- sctb 10y ago
  Thanks! We updated the link.
PaulHoule 10y ago
Ad spend will be up in 2016 because of the elections, that is what makes the dead cat bounce.
exelius 10y ago
I absolutely agree with his take on this; and I've echoed a similar sentiment in my comment history. The advertisers who advertise on TV are the biggest, slowest, oldest companies. They're largely just interested in "brand advertising" and they don't understand how to properly do digital advertising. TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix). But we haven't replaced TV with anything that the marketing managers at these companies know how to measure and report on. For all its faults, the cause-effect relationship in TV advertising is well-understood. That's not the case for digital, so advertisers aren't as comfortable spending $300 million on digital ad spend. They don't believe that they have to change the balance of media buys and creatives; it's been an invaluable rule their whole career so why change it now? The big question is "What does TV advertising get replaced with?" I'm not sure digital is the answer; and I think the need for traditional advertising somewhat disappears along with their use cases. As we start to rely more and more on AI to make decisions for us, promoting one product versus another in AI applications will become a new form of advertising (which is why Google is all-in on AI). But we don't know what form those products will take because the market hasn't taken shape yet. The next 5 years will be really interesting on the AI front with regards to advertising.
- jwebb99 10y ago
  > TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix) No, the future of TV is like cable TV, but on the Internet (Subscription Fee + Ads)... like Hulu.
  - exelius 10y ago
    Being on the Internet breaks the advertising model (CPMs are much, much lower online versus TV ads due to the sales channels they use). Moreover, the Internet has conditioned people to think "Subscription = No ads!" Hulu isn't the future of TV; Hulu is the future of TV as envisioned by a bunch of major TV networks. I think HBO and Netflix are closer to the future of TV than Hulu is.
    - icebraining 10y ago
      Moreover, the Internet has conditioned people to think "Subscription = No ads!" Wasn't that the promise of the early cable TV? How long did that last?
      - dragonwriter 10y ago
        > Wasn't that the promise of the early cable TV? No, early cable TV was a way to provide signals from broadcast (and, thus, ad supported) channels to areas where, for geographic reasons, there was poor reception. (The CATV acronym frequently used for cable TV originated as an acronym for its earlier name, "Community Antenna Television" -- reflecting it as a model of consumers sharing an antenna to receive broadcast signal.) Premium, ad-free content, cable-specific programming didn't turn up until decades later. So, you've basically got it backward: instead of being something that originally promised subscription fees for no ads content but fell away from that, cable is something that initially offered subscription fees for access to ad-supported broadcast content but later evolved to include subscription-based (and pay-per-view) ad-free content available on top of the basic ad-supported content.
      - toomuchtodo 10y ago
fumar 10y ago
One perspective I try to keep in mind is that all media will one day be addressable. That means whether an "ad" is video, social, mobile, desktop, or VR, it will be accessible to marketers. That turns television commercials into video ads and the ads will be powered and purchased in real-time depending on the end user. I agree traditional TV buying will decline, a new more holistic approach (digital buying) will replace it. For the end user this means more targeted advertising. There are several companies that have embedded their tracking into modern televisions.
jgv 10y ago
Beyond the dinosaurs being the big spenders on TV, there's no way digital advertising as we know it today will replace TV advertising. Creatively, you really can't even compare the two. A TV spot is the opportunity to make someone laugh or make someone feel something – anything. A banner ad or a spot with a "skip now" button is not going to do that. You really can't tell a story (as cliche as that sounds, its true). Digital advertising has less creative opportunity for the people making it and basically no reason for anyone seeing it to care. This is why Snapchat and Facebook starting to really figure out video is so huge in adland. As attentions shift there and it starts to house real content, advertisers will have an actual digital channel to create content people might actually care about.
- dswalter 10y ago
  I would posit that Snapchat and Facebook are working so hard on videos because video ads have a much higher payout in the current ecosystem. I don't know that it's necessarily because of efficacy.
  - softawre 10y ago
    But... why would they have a big payout? Is it because... they are effective?
  - jgv 10y ago
    The higher payouts for video exist because those units are more effective.
    - shostack 10y ago
      The higher CPMs are because it is a "new" format that has less ways of avoiding it (ie. prerolls) compared to banner ads. Effectiveness is totally dependent on a variety of variables, and as someone very well versed in these things, I can confidently state that most advertisers have no clue about things like "cross channel attribution," how to go about finding a proper value for view-through conversions (hint: it sure as heck isn't 100%), viewability, etc. For example, right now FB counts a view as a video that plays for three seconds[1] (could have sworn it used to be 2). A lot of advertisers, myself included, would laugh at that in terms of properly conveying the value of most messages (Geico ads aside--they really know their medium). Combine that with Facebook also counting view-throughs as conversions with 100% credit (albeit with a short lookback window) by default, and you have the recipe for overvalued CPMs on video. And that's just on FB--other sources can be much worse. [1]http://marketingland.com/whats-a-video-view-on-facebook-only-3-seconds-vs-30-at-youtube-128311 http://marketingland.com/whats-a-video-view-on-facebook-only... Part of me wishes Ben had guests on Exponent. I listen to every episode, and would LOVE to dig into this stuff with him from an advertising perspective as he actually has a somewhat solid sense about it. But what I've been disappointed in is his inability/refusal to dig deep into these key points. Performance for video and display overall is super hard to measure effectively given the nature of the beast. Just because there's lots of data available doesn't mean it is the right/best data, and he should point that out more. Attribution is a hairy beast, and ad sales people take full advantage of people's lack of knowledge on this.
ilamont 10y ago
No one is going to click a link in their feed to buy a car or laundry detergent, and a brick-and-mortar retailer doesn’t want to encourage shopping to someone already online. Automobile manufacturers have been working with digital advertising for years and their methods are quite sophisticated (1). Every day tens of millions of people see their campaigns on Facebook, mobile games, SERPs, etc. Brick-and-mortar retailers are also using ads to drive people to their websites or to their stores. One example that springs to mind is the Best Buy campaign in the runup to the Superbowl to get people to come in and buy a wide-screen HDTV before the game. I don’t know how effective it was, but surely some people clicked on the ads. 1. http://www.adweek.com/news/technology/car-brands-are-starting-get-marketing-data-theyve-always-wanted-162762 http://www.adweek.com/news/technology/car-brands-are-startin...
- kylec 10y ago
  No one clicks on a link to buy a car not because no one wants to, but because, unless you're buying a Tesla, you can't, you have to buy through a dealership.
  - drumdance 10y ago
    There's no reason that link can't redirect you to a local dealer.
geodel 10y ago
> Relatedly, big box retailers that offer little advantages beyond availability and low prices are being outdone by Amazon on both counts. In the very long run it is hard to see why they will continue to exist. I have lately noticed amazon is increasingly more expensive and return policies more restrictive. Yes, it is good for their business but I find amazon is getting less compelling offering for me. And the 'very long run' part is cleverly phrased obviousness. I mean in the very long run I do not see why human with so many shortcomings would not be replaced by some superior digital form of life.
deleted 10y ago
[deleted]
B1FF_PSUVM 10y ago
Interesting fact in the linked page: "Looking at data since the 1920s, the U.S. advertising industry has always been about 1 percent of U.S. GDP. It’s surprisingly consistent, mostly tracking between 1 percent and 1.4 percent—and averaging 1.29 percent."

Mods should update the URL to https://stratechery.com/2016/tv-advertisings-surprising-strength-and-inevitable-fall/ https://stratechery.com/2016/tv-advertisings-surprising-stre...

pboutros 10y ago
Good time to post my list of favorite xkcd cartoons: xkcd.com xkcd.com xkcd.com xkcd.com xkcd.com xkcd.com (...)
sctb 10y ago
Thanks! We updated the link.

PaulHoule 10y ago

Ad spend will be up in 2016 because of the elections, that is what makes the dead cat bounce.

exelius 10y ago

I absolutely agree with his take on this; and I've echoed a similar sentiment in my comment history. The advertisers who advertise on TV are the biggest, slowest, oldest companies. They're largely just interested in "brand advertising" and they don't understand how to properly do digital advertising. TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix). But we haven't replaced TV with anything that the marketing managers at these companies know how to measure and report on. For all its faults, the cause-effect relationship in TV advertising is well-understood. That's not the case for digital, so advertisers aren't as comfortable spending $300 million on digital ad spend. They don't believe that they have to change the balance of media buys and creatives; it's been an invaluable rule their whole career so why change it now? The big question is "What does TV advertising get replaced with?" I'm not sure digital is the answer; and I think the need for traditional advertising somewhat disappears along with their use cases. As we start to rely more and more on AI to make decisions for us, promoting one product versus another in AI applications will become a new form of advertising (which is why Google is all-in on AI). But we don't know what form those products will take because the market hasn't taken shape yet. The next 5 years will be really interesting on the AI front with regards to advertising.

jwebb99 10y ago
> TV money is absolutely going away -- the future of TV is commercial-free subscription VOD (like Netflix) No, the future of TV is like cable TV, but on the Internet (Subscription Fee + Ads)... like Hulu.
- exelius 10y ago
  Being on the Internet breaks the advertising model (CPMs are much, much lower online versus TV ads due to the sales channels they use). Moreover, the Internet has conditioned people to think "Subscription = No ads!" Hulu isn't the future of TV; Hulu is the future of TV as envisioned by a bunch of major TV networks. I think HBO and Netflix are closer to the future of TV than Hulu is.
  - icebraining 10y ago
    Moreover, the Internet has conditioned people to think "Subscription = No ads!" Wasn't that the promise of the early cable TV? How long did that last?
    - dragonwriter 10y ago
      > Wasn't that the promise of the early cable TV? No, early cable TV was a way to provide signals from broadcast (and, thus, ad supported) channels to areas where, for geographic reasons, there was poor reception. (The CATV acronym frequently used for cable TV originated as an acronym for its earlier name, "Community Antenna Television" -- reflecting it as a model of consumers sharing an antenna to receive broadcast signal.) Premium, ad-free content, cable-specific programming didn't turn up until decades later. So, you've basically got it backward: instead of being something that originally promised subscription fees for no ads content but fell away from that, cable is something that initially offered subscription fees for access to ad-supported broadcast content but later evolved to include subscription-based (and pay-per-view) ad-free content available on top of the basic ad-supported content.
    - toomuchtodo 10y ago

fumar 10y ago

One perspective I try to keep in mind is that all media will one day be addressable. That means whether an "ad" is video, social, mobile, desktop, or VR, it will be accessible to marketers. That turns television commercials into video ads and the ads will be powered and purchased in real-time depending on the end user. I agree traditional TV buying will decline, a new more holistic approach (digital buying) will replace it. For the end user this means more targeted advertising. There are several companies that have embedded their tracking into modern televisions.

jgv 10y ago

Beyond the dinosaurs being the big spenders on TV, there's no way digital advertising as we know it today will replace TV advertising. Creatively, you really can't even compare the two. A TV spot is the opportunity to make someone laugh or make someone feel something – anything. A banner ad or a spot with a "skip now" button is not going to do that. You really can't tell a story (as cliche as that sounds, its true). Digital advertising has less creative opportunity for the people making it and basically no reason for anyone seeing it to care. This is why Snapchat and Facebook starting to really figure out video is so huge in adland. As attentions shift there and it starts to house real content, advertisers will have an actual digital channel to create content people might actually care about.

dswalter 10y ago
I would posit that Snapchat and Facebook are working so hard on videos because video ads have a much higher payout in the current ecosystem. I don't know that it's necessarily because of efficacy.
- softawre 10y ago
  But... why would they have a big payout? Is it because... they are effective?
- jgv 10y ago
  The higher payouts for video exist because those units are more effective.
  - shostack 10y ago
    The higher CPMs are because it is a "new" format that has less ways of avoiding it (ie. prerolls) compared to banner ads. Effectiveness is totally dependent on a variety of variables, and as someone very well versed in these things, I can confidently state that most advertisers have no clue about things like "cross channel attribution," how to go about finding a proper value for view-through conversions (hint: it sure as heck isn't 100%), viewability, etc. For example, right now FB counts a view as a video that plays for three seconds[1] (could have sworn it used to be 2). A lot of advertisers, myself included, would laugh at that in terms of properly conveying the value of most messages (Geico ads aside--they really know their medium). Combine that with Facebook also counting view-throughs as conversions with 100% credit (albeit with a short lookback window) by default, and you have the recipe for overvalued CPMs on video. And that's just on FB--other sources can be much worse. [1]http://marketingland.com/whats-a-video-view-on-facebook-only-3-seconds-vs-30-at-youtube-128311 http://marketingland.com/whats-a-video-view-on-facebook-only... Part of me wishes Ben had guests on Exponent. I listen to every episode, and would LOVE to dig into this stuff with him from an advertising perspective as he actually has a somewhat solid sense about it. But what I've been disappointed in is his inability/refusal to dig deep into these key points. Performance for video and display overall is super hard to measure effectively given the nature of the beast. Just because there's lots of data available doesn't mean it is the right/best data, and he should point that out more. Attribution is a hairy beast, and ad sales people take full advantage of people's lack of knowledge on this.

ilamont 10y ago

No one is going to click a link in their feed to buy a car or laundry detergent, and a brick-and-mortar retailer doesn’t want to encourage shopping to someone already online. Automobile manufacturers have been working with digital advertising for years and their methods are quite sophisticated (1). Every day tens of millions of people see their campaigns on Facebook, mobile games, SERPs, etc. Brick-and-mortar retailers are also using ads to drive people to their websites or to their stores. One example that springs to mind is the Best Buy campaign in the runup to the Superbowl to get people to come in and buy a wide-screen HDTV before the game. I don’t know how effective it was, but surely some people clicked on the ads. 1. http://www.adweek.com/news/technology/car-brands-are-starting-get-marketing-data-theyve-always-wanted-162762 http://www.adweek.com/news/technology/car-brands-are-startin...

kylec 10y ago
No one clicks on a link to buy a car not because no one wants to, but because, unless you're buying a Tesla, you can't, you have to buy through a dealership.
- drumdance 10y ago
  There's no reason that link can't redirect you to a local dealer.

geodel 10y ago

> Relatedly, big box retailers that offer little advantages beyond availability and low prices are being outdone by Amazon on both counts. In the very long run it is hard to see why they will continue to exist. I have lately noticed amazon is increasingly more expensive and return policies more restrictive. Yes, it is good for their business but I find amazon is getting less compelling offering for me. And the 'very long run' part is cleverly phrased obviousness. I mean in the very long run I do not see why human with so many shortcomings would not be replaced by some superior digital form of life.

deleted 10y ago

[deleted]

B1FF_PSUVM 10y ago

Interesting fact in the linked page: "Looking at data since the 1920s, the U.S. advertising industry has always been about 1 percent of U.S. GDP. It’s surprisingly consistent, mostly tracking between 1 percent and 1.4 percent—and averaging 1.29 percent."