TV ADVERTISING: IT’S NOT JUST ‘WHY’, BUT WHEN!

If you represent one of the many brands who have been considering advertising on TV, then the next 5 minutes of your time may be well spent.

TV advertising is an investment decision, and, like any investment, we are looking to maximise returns (invariably sales) at the lowest possible risk. So, when considering whether advertising is going to generate profitable growth for your business, the two key questions to ask are WHY? and WHEN?

 

The WHY

Consider your objectives. What business problem are you trying to solve? What do you want potential customers to think about your brand? What action do you want them to take?

Smart campaign planning driven by consideration of the 7 C’s will help answer whether your campaign is going to drive the desired outcomes;

  1. Customers (who are they?)
  2. Coverage (how many?)
  3. Creativity (how can we cut through?)
  4. Context (where will we have the most relevance?)
  5. Content (what environment should we be seen in?)
  6. Competition (share of voice vs competitor brands)
  7. Comms (how can we amplify the campaign to key stakeholders?)

 

The WHEN

A factor which is often over-looked is ‘When?’ Of course, for some sectors, there are time-sensitive issues which are critical but, given TV airtime is traded on a supply & demand basis, prices can vary enormously at different times of year and the benefits of investing at the right time are hugely significant.

Therefore, an 8th and very important C is Cost.

Like Oil, TV Advertising is a commodity market. The ‘demand’ being advertising revenue, and the ‘supply’ being the audience delivery. The price (revenue/audience) being expressed as a Cost per Thousand (CPT) against any pre-defined target audience.

If we can reduce costs by entering the market at the right time, it allows us to buy more airtime or risk less cash. In turn, our chances of a cost-efficient return on investment are obviously increased.

The uncertainty caused by the Pandemic has left the TV market in a relatively volatile state. During Lockdown 1.0 we saw a dramatic drop in airtime demand and an increase in audience supply creating a huge drop in pricing. More recently, the TV market has stabilised, but with an uncertain future ahead, investing at the right time makes campaign planning all the more important.

 

Future Opportunities

What has happened in the past is only an indicator as to what will happen in the future, but there is no doubt the knock-on effect of COVID will make for a more volatile, less predictable TV buying marketplace.

On top of the historical factors like seasonality, programme scheduling and a locked-in events calendar, we now need to understand the levels of ‘pent-up’ advertiser demand. Overlay the massive growth in subscriptions to smart TV streaming services such as Prime and Netflix with the sporting calendar (e.g. Olympics and Euros) and, what was already volatile, just got more so.

The eventual return to “normality” and its effect on demand for other media (e.g. Out of Home, Cinema, Print etc) will all affect the ideal time to invest in TV advertising in order to achieve the strongest ROI. Ultimately, timing your TV investment correctly could either save money or allow for a more impactful and sizable campaign.

 

Does Size Matter?

There is a misconception that to even contemplate advertising on TV requires enormous budgets. Opportunities exist for all budget levels, particularly if invested intelligently. The chart below shows the number of Advertisers on TV throughout 2019 and their respective budgets – the volumes may surprise you!

TV is flexible, in that you can buy as much or as little as is required, but clever planning of that budget will certainly reap rewards.

The Hard Stats:

1:  TV advertiser demand from January 2019 – May 2021

The traditional pattern is of highest demand between Sept-Nov with the lowest demand in Jan-Feb. A difference of between 20-25%. Where Easter falls, generally dictates the pricing across March and April.

The COVID effect in Lockdown 1.0 is very clear with demand falling by circa 45% in April-July 2020 but bouncing back in the Autumn as a consequence of growing audience levels and advertising funds being re-directed from other channels more affected by the Pandemic (e.g. Out of Home and Cinema).

The TV market is now bouncing back with April / May 2021 demand surpassing 2019 and being almost double that of the corresponding period in 2020.

 

2: Supply: All Adult TV viewing levels from January 2019 to May 2021

This illustrates the traditionally higher viewing levels in the Winter months whilst also showing substantial viewing growth throughout 2020 as more people were confined to their homes and turned to the TV for information and entertainment. It also demonstrates how viewing levels to linear TV have dropped as lockdown measures have eased since April (N.B. these figures exclude Video on Demand and subscription services such as Netflix).

 

3: The Overall Effect on Price, TV price being measured as a cost per thousand impacts.

During Lockdown 1.0 we not only saw how the cost of TV fell by over 50%, but then also how quickly the price recovered by the Autumn. It is worth noting that, in general, Autumn TV prices are circa 20% more expensive than in Spring and 30% more expensive than in Summer, but with the increased demand, and falling audiences in early Summer 2021, driven by the Euro’s, it looks to be very expensive. This may well drive prices down by the Autumn.

 

How can AMS Media help you?

TV advertising strategies can be developed to suit whatever stage your brand finds itself at. Whether you are seeking support for a start-up, accelerated growth, a re-brand or pivoting into new areas, by studying the market trends and looking for price opportunities we can help de-risk your investments and increase your returns. We also put live measurement at the heart of our TV buying, so you can see in real time both the short- and long-term effect the campaign is having on your business.

Being an independent agency with no pre-defined agency commitments to TV sales houses, we remain agile to market fluctuations and ensure you achieve the best value, whilst remaining 100% neutral in our recommendations.

We appreciate, particularly at this time, that budgets are tight and continue to be squeezed but, whilst ‘Cash is King’, the TV companies are more open to alternative investment vehicles such as Corporate Barter, Advertiser Funded Programming, Forward Payment Models, Deferred Payment Models and Payment by Results. We will always explore every potential angle to help decide which is the best financial trading model to suit your business objectives.

So, if you would like to see examples of some of our past successes or seek some qualified advice on TV advertising and how it can grow your brand cost effectively, we would love to hear from you.

 

Frank Lyons

Director

franklyons@amsgroup.co.uk

+44 (0)20 7843 6900

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