Video Consumption in a Fragmented Marketplace

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By: Michael Goodman, Strategic Analyst, Mercury Media

TV, Internet, smartphones, DVRs, on-demand. Today’s consumers have more viewing options than at any other time in history. While different segments of the population might prefer different devices to view on, or exhibit different viewing habits, the overall trend is clear; consumers are watching more video on TV, the Internet and mobile devices than at any other time.

But despite all the alternative viewing options available, plain old television continues to dominate viewing by a wide margin. According to Nielsen’s Q1 2011 Cross-Platform Report, persons 2+ watched an average of 35 hours and 37 minutes of television a week followed by using the internet on a PC (5:43 per week) and watching time shifted TV (2:25 per week) (see Exhibit 1). Segmenting television into quintiles shows the even the lowest quintile of TV viewers still averages an hour of TV viewing per day, while the highest quintile watches nearly ten hours a day. While some variation is seen among different demographic and ethnic groups the overarching theme remains constant – television dominates viewing.

Exhibit 1

Time Spent Viewing

Source: The Nielsen Company – The Cross-Platform Report, Q1, 2011

Factors contribution to the strength of television include the following:

  • Programming. While individual channels may struggle to attract viewers (as seen by the decline of the broadcast networks), broadcast and cable networks overall are producing programming that consumers want to see. In particular, cable networks are now producing original programming whose quality rivals that once seen on only the broadcast networks.
  • Windowing. We don’t often think of television as having release windows the way that movies do but in reality it does. To minimize cannibalization and protect their cash cows, programmers’ first air programs on their linear channels, then release them to secondary channels, such as cable video-on-demand, online, and mobile. As a society, we don’t handle delayed gratification well, so the bulk of a shows audience watches the initial airing with secondary channels providing incremental viewing opportunities.
  • The television set. The TV is, and will continue to be, the dominate screen for video content as long as there is programming to support it. Sitting in the comfort of the living room, family room or bedroom watching a large screen TV easily trumps the experience of watching video on a PC or handheld device. Adding to this experience is the growth of high-definition TVs. According to Forrester Research, 71% of U.S. households will own a HDTV by 2014 and more than half of them will have two or more.

Television far surpasses other mediums for its ability to reach massive audiences, convey sight, sound and emotion, establish credibility, and build brands. Combined with direct response spots, television can provides marketers with significant value for their money.

Direct response TV spots are typically longer (60, 90 and 120 seconds) than traditional brand spots allowing marketers to more effectively promote the benefits of a product or service. They are frequently bought as remnant time or as run-of-schedule at steeply discounted prices, often 10% – 50% off the rate card. For the cost of a single 30 second spot in primetime, advertisers can get dozens of spots across a broad range of stations. Finally, DRTV spots are measureable, allowing marketers to gauge the effectiveness of their creative and media buys by tracking responses via the phone and web, and analyze inquiry and order conversion metrics to optimize their creative and media buys.

Until TV viewership stops increasing and hovering in the hundreds of hours viewed per month compared to broadband and mobile video consumption in the low single digits, it is reckless to proclaim that any great revolution is taking place and that marketers should be shifting their advertising dollars away from TV. Rather than cannibalize television viewing, consumers are using emerging video platforms to supplement existing viewing; turning broadband and mobile video into audience multipliers. As such, marketer should be experimenting with ways to add broadband and mobile video to the mix without cannibalizing their television ad spend and for marketers looking for greater accountability from TV advertising they can look to DRTV.

To learn more, download Mercury Media’s FREE whitepaper, The Power of Television.


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