Are advertisers wasting money on TV?
Over the past decade, consumer behavior towards consuming content has changed significantly. Previously, where TV was a staple of entertainment, TV used to be the time where the family gathers around to watch a specific show or movie. However, nowadays users prefer consuming content whenever they want, however they want, instead of being limited with a specific time to watch their favorite shows. Why? One of the main reasons is binge watching. Users prefer watching a full show on VOD platforms such as Netflix, YouTube, etc. rather than watching a daily or weekly episode on cable TV with ads interrupting their show.
In today’s digitally dominated world, it has become noticeable that consumers are shifting away from their TVs and spending more time online. This brings us to the next question, who is watching TV? According to data shared by the American Times Use Survey, consumers in the age group of 65+ are watching TV the most with an increase of watch time from 2003 to 2017 versus consumers who are in the 15–34 age group who are barely watching TV. The below chart further demonstrates the data:
Source: American Times Use Survey
Now that it is clear who consumes TV content the most, it is crucial to note that TV ads placed on these shows will most probably not be relevant to the 65+ demographics, simply because the purchasing power is the highest among the millennials age group (www.hansondodge.com), who are watching TV the least as seen in the above chart. It’s more beneficial for brands to target this age group on YouTube to ensure that their budget is being spent on the right platform. According to a study by Think with Google, it has been found that 18 – 49 years old spent less time watching TV, while time on YouTube went up by 74%.
Source: Think with Google
Aside from brands having the chance to target over 2 billion monthly active users on YouTube (www.blog.youtube), it’s important to note that the platform offers advertisers many benefits such as: targeting, reporting, remarketing and actionable call to actions, to name a few. On the other hand, TV offers Gross Rating Point (GRP) panel data, measuring only reach and frequency in audience (Corona, 2017). YouTube also reaches more 18–49 old users than any broadcast or cable TV network on mobile alone O’Neil; Howard, 2016), giving brands the opportunity to target as many users, depending on their allocated marketing budget for their ad campaign. YouTube gives brands more reach and is also cheaper than TV. The average CPM for YouTube advertising is $6-$8 (www.mediashark.co) vs TV which can go up to $34 for prime-time ads (Teixeira; Kornfeld, 2015).
Source: Think with Google
So the question to advertisers is, do you still want to waste your money on TV ads or will you move your budgets to YouTube to reach your target audience with content that matters to them?
References:
Corona, Blue. YouTube vs. TV Advertising: Which Has a Greater ROI? 30 Dec. 2019, www.bluecorona.com/blog/youtube-vs-tv-advertising/.
“Millennials: 80 Million Strong and Ready to Spend.” Hanson Dodge, 9 Nov. 2020, www.hansondodge.com/blog/millennials-80-million-strong-and-ready-to-spend.
O’Neil-Hart, Celie, and Howard Blumenstein. The Latest Video Trends: Where Your Audience Is Watching. Google, Apr. 2016, www.thinkwithgoogle.com/marketing-strategies/video/video-trends-where-audience-watching/.
Teixeira, Thales, and Leora Kornfeld. “YouTube for Brands.” 5 Feb. 2015, pp. 1–14.
The 2020 Guide to YouTube CPM. 30 Dec. 2019, mediashark.co/youtube-cpm/.
“YouTube for Press.” Blog.youtube, blog.youtube/press/.
