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Ads that appear on both TV and Facebook perform better than ads that only run on TV, according to a recent study conducted by Facebook and Kantar Worldpanel, The Drum reports.
Kantar analyzed 13 separate video campaigns by fast-moving consumer goods (FMCG) brands that ran across Facebook and TV.
These FMCG brands are owned by some of the biggest ad spenders in the world — for instance, Procter & Gamble and Unilever were the top advertisers by spending in 2015 — so appealing to them is a sensible way for Facebook to chase revenue.
This fits into Facebook’s long-term strategy to draw advertising spend away from TV. Other digital companies are trying to do this too — Snap, for example, has recently made a push for original content to try and attract TV ad spend. Digital ads will be the top media category next year, reaching $202 billion and a market share of 40%, compared with linear TV ad sales, which are expected to reach $186 billion and capture 36% of the market, according to Magna estimates cited by Variety.
Here are some key takeaways from the study:
- Ads run on both TV and Facebook are more effective at driving sales. The study found a 29% uplift in likelihood to purchase when people were exposed to ads on both channels. The data indicates the importance of repeated messaging — people are more likely to buy if they hear the same message on two separate channels. This should help Facebook in its pitch to gain more TV ad dollars.
- It's cheaper to reach people on Facebook than it is on TV. On average, the cost of reach was 1.9 times cheaper on Facebook than TV. Facebook’s targeting abilities may be behind this, as it’s more effective for reaching the intended audience. At the same time, offering a relatively lower cost of reach is a sound strategy for Facebook to lure more brand advertisers to its platform.
- However, TV is still more effective than Facebook in one regard. The study found TV had a 4.7 times greater household reach than Facebook. This indicates TV has an advantage over Facebook when the main objective is to drive brand awareness. But if brands aim to both increase awareness and drive purchases, they should run their campaigns on Facebook in conjunction with TV.
The TV ad industry is one of the largest ad segments in the US — and it's ripe for digital disruption. The first TV commercial aired in the US in 1941, and it featured an ad for Bulova watches during a Brooklyn Dodgers baseball game.
While there have been advancements in TV ad buying since Bulova’s commercial, the audiences that TV commercials target are still based on broad demographic data, like age and gender, and are aimed at maximizing reach. Although TV ads remain highly effective, targeting can be greatly improved by introducing more digital data into the mix.
Digital display advertising was disrupted by programmatic technologies because of the operational efficiencies gained from automating manual processes. But TV is a completely different animal. The TV advertising space is entrenched in traditional processes that largely depend on direct negotiations between ad buyers and sellers. By incorporating more data, TV advertisers can fine-tune their targeting beyond broad consumer groups, and potentially see higher returns on their ad spend.
But the way consumers watch TV content is changing, and data collection is getting more expansive. Disrupting an ad industry with a history spanning over eight decades will be a significant hurdle for programmatic TV (PTV) adoption.
Kevin Gallagher, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report that explores the drivers of programmatic TV adoption and the value advertisers and TV companies can derive from hyper-targeted audiences. It also highlights the key differences and similarities between programmatic TV and digital display, and assesses several potential barriers to PTV adoption.
Here are some of the key takeaways from the report:
- Programmatic TV is a small, but growing opportunity. PTV is still in very early days, with ad spend reaching an estimated $1 billion in 2016, just over 1% of traditional TV’s $73 billion.
- Precise targeting is what will drive more PTV adoption. Unlike in digital display advertising, where the promise of programmatic is tied to increased efficiency through automation, PTV’s value proposition is tied to better targeting.
- Programmatic is slowly infiltrating the upfront process for primetime buying. More networks are providing tools for advertisers to incorporate advanced data targeting with premium upfront buys.
- There are several barriers for PTV adoption. Some TV execs are worried that incorporating programmatic trading of TV inventory can potentially devalue their stores.
In full, the report:
- Forecasts US programmatic TV ad revenue through 2021.
- Highlights the top beneficial attributes of PTV.
- Explores some of the top barriers and challenges to PTV adoption, including measurement hurdles and fears around commoditizing TV inventory.
- Outlines strategies some networks are taking when incorporating PTV in their upfront offerings.
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