Phil Ely: Television advertising in a recession 

By Phil Ely, head of comms planning, Mediahub.

What’s really going to matter for the next 12 months or so?

There are a lot of differing opinions out there right now about how badly the Australian economy has been impacted by the pandemic and how quickly it will recover. Regardless of which unemployment number you think is more accurate or if you are in the V, W or hashtag recovery club, there are 2 things I think everyone in advertising and marketing can be sure of in the near term future.

Most clients are going to have smaller budgets. There will be exceptions, but it is very likely  ad-spends will decline as we move further into this recession

The budget that is spent is going to be under more scrutiny than ever to deliver clear ROI – which is no mean feat given the increased push for advertising accountability in recent times

As a communications strategist in a media agency, a fundamental part of my job has always been ensuring a client’s budget is invested in the right media channels and executed in the most effective manner to deliver on their objectives – from building brand consideration to completely unrealistic CPA targets.

To this end, I’ve been on the addressable media bandwagon for a while already, particularly Broadcast Video On Demand (BVOD) and broader online video. I’m not one of those media planners telling clients that broadcast TV and radio are dead. I am however, advocating that the landscape is changing and the advantages, including increased audience targeting accuracy and a degree of direct control over frequency delivery to reduce, or even entirely eliminate media wastage are extremely compelling. A sentiment that a lot of our clients have shared over the last year or two.

The primary barrier I come across when recommending this type of approach is scale. ‘Does anyone really watch that on demand stuff?’ is still a common question.  While a reliable, consolidated BVOD audience figure has been difficult to come by, there has been a demonstrable growth in metrics – such as minutes viewed, for some time. Observing this trend, earlier this year we used our proprietary research platform, Scout to dig into Australian TV behavior in greater detail. The most critical finding confirmed that the segment we are calling ‘The Fragmented’ was quickly becoming the norm in Australia.

‘The Fragmented’ segment:

Think of TV as a type of content, not a screen in the living room
Live broadcast makes up less than a ¼ of their TV viewing
Increasingly watch alone, so they can pick what they want and ‘binge’ 2-3 episodes at a time
Most would not feel stressed if broadcast or Foxtel ‘died tomorrow’
58% of all people would chose streaming over broadcast if they had to pick one, increasing up to 77% for people 14-24 years old

Then, COVID-19 happened and strapped a great big rocket to the back of this trend. We were all stuck at home, the footy was cancelled and after a few days we all got pretty sick of watching the news, so predictably ‘The Fragmented’ spent more time doing what they were already used to, BUT importantly the older mainstream and stragglers on the adoption curve decided to give ‘on demand’ a try and found out they were pretty good. As one example, Video Chapter Views on SBS On Demand were about 40% higher in April this year compared to the average from Q4 2019 and Q1 2020. They have also added nearly 300,000 new registered users since Feb. As just one of the 4 major platforms  SBS is a good yard stick for the wider industry, as viewership is more stable compared to the other BVOD providers that see bigger spikes and declines in audience numbers around tentpole programs.

If new behaviours take between 21-66 days to form, then these audiences have all had plenty of time to make these viewing changes permanent. This could be the most significant silver lining to come out of this pandemic from an advertising perspective.

BVOD, especially when managed programmatically, ticks all the boxes of efficiency, accountability and flexibility. I’m also convinced that attention is more focused and consistent in a BVOD environment compared to broadcast, as on average people are more actively viewing and less likely to be second screening. Our next Scout study is going to focus on better understanding this dynamic.

So, what’s the point? Addressable BVOD TV ticks all the boxes of a channel that’s going to reliably provide all the critical aspects of most campaigns in the coming months, if not years. Thanks in large part to COVID-19 and our government induced quarantine, the answer to the question of ‘does anyone really watch that on demand stuff?’ is now, much more confidently going to be YES and will span a much broader demographic.

Now, I’m still not saying Broadcast TV is dead! However, right before the lockdown, I went to the Future TV Advertising Forum in Sydney and while BVOD was a topical focus through the whole day, the key message was always ‘BVOD is a great way to extend the reach of your TV campaign’. I just kept thinking to myself that these guys really need to go and re-read Levitt’s Marketing Myopia.

I strongly believe BVOD is a huge opportunity to keep brands in TV that might otherwise move to YouTube, Social Media and Search as pressure on their budget increases. It’s also a chance to bring in new brands that have never been confident to use TV because their budgets could not buy minimum TARP sufficiency, or their audience was too niche for a broadcast channel to make sense.

This is the time for both the networks and the agencies to stop resisting change, accept that its happened and use what is going to be a really tough time for the advertising industry to drive innovation that will protect revenue and client ROI in the short term, and create huge potential for growth in a broader view of TV, as the economy turns itself back around, however long that takes.

For the full report on the findings of our Scout Study into the changing habits on TV viewers in Australia and our analysis of the potential impact the COVID-19 pandemic is likely to have on TV and broader media behavior please get in touch via email (phillip.ely@mediahubml.com) or on Linkedin.