Why Consumers’ Shift to Digital is Good News for TV
Consumers’ media habits continue to shift toward digital. According to a 2017 survey by Hub Research, over 50% of US TV viewers now watch their favorite shows using digital-based (rather than TV-based) means. That’s a big leap compared to 2014, when only around 30% of US TV viewers used digital sources to consume their favorite content. While that might initially seem like bad news for TV networks and advertisers, there’s more to this story than meets the eye. Here are a few reasons why consumers’ move to digital isn’t necessarily a bad thing for TV.
Digital helps TV acquire new viewers
One of the falsehoods of today’s multi-screen, multi-channel, viewing environment is that consumer viewing habits are an “either/or” situation: if they’re watching a show on digital then they aren’t watching on TV. According to additional research from Hub, that may not be the case. 57% of viewers in the same survey who said they discovered a show online later watched it on TV. In fact, many networks now premiere entire seasons of their shows online to help build buzz before encouraging those viewers to continue watching on TV. “Today, the entire first season is a marketing vehicle,” said Kevin Reilly, chief creative officer at Turner. Turner used this approach with its show “Animal Kingdom,” with the first episode debuting on Facebook and YouTube. Turner then convinced 960,000 of those digital viewers to watch the show during its normal weekly TV time.
Pairing digital with TV helps boost ad rates
It’s not just the viewers that are benefitting from the growing importance of digital. The increasing interplay between these two formats also helps TV advertisers and networks develop more effective ad strategies. Consider the example of Discovery, a TV network which is building a complementary platform of TV and digital distribution tools. As Paul Guyardo, chief commercial officer at Discovery, explains, digital helps advertisers deliver more precise ad campaigns to the right viewers. “Discovery gets a 50% premium on ads sold through the app since they are more targeted and viewers cannot skip ads,” he said. But Guyardo also notes that the company’s dual TV and digital strategy helps the company’s negotiating strategies with partners. “When we come up for renewals, we aren’t just providing a linear channel,” Guyardo said. “That helps with renewals and rate increases.”
TV is still tops for winning hearts and minds
These days, digital content may make up more and more of viewers’ screen time. But even as consumers spend more time online, there are still instances where it makes sense for advertisers to focus on TV to make sure their message gets heard. In fact, some of the world’s best-known digital ad companies like Google rely on TV for their most important ad campaigns. In Q4 2016 for example, Google spent more than $109 million on TV ad buys promoting its Pixel smartphone, doubling its TV budget from the same quarter the year prior. As many executives explain, TV still has a reach with consumers that is often unmatched by digital outlets. “When we run a heavy TV schedule, we see a lift in sales and product awareness,” said Rich Lehrfeld, Senior Vice President of Global Brand Marketing and Communications at American Express. “We need to run two weeks of digital to get the reach of one day of broadcast.”
Many in the advertising industry like to describe TV and digital as competitors: when one format gains in viewers or advertising dollars, the other format suffers. But as the evidence has shown time and again, digital and TV are partners more than they are competitors. Whether it’s helping TV networks find new audiences, assisting advertisers in delivering more targeted campaigns, or watching digital-focused companies like Google use TV campaigns to announce new products, digital and TV increasingly work better when they work together.