A Guide to TV Advertising in 2021 Introduction Welcome to Latana’s Guide to TV Advertising in 2021! In recent years, digital marketing was everyone’s darling and television took somewhat of a backseat. After all, only digital offers precise targeting capabilities, personalized user experiences, and accurate ROI measurement, right? Not quite. TV has officially pressed the reset button and is catching up faster than you might think. Especially now people are spending more time at home, traditional marketing channels are experiencing a comeback. Whether you are already planning to use TV ads in your next campaign or are just curious about the state of TV advertising in 2021, we hope you will find this guide helpful t DEAL! THE BEST DEAL! Table of Contents A short history of TV advertising Should you still advertise on TV in 2021? The main trends in TV advertising How to ensure your TV campaigns succeed in 2021 How to track brand awareness when running TV campaigns Ads on TV vs. Streaming Services C h a p t e r 1 C h a p t e r 2 C h a p t e r 3 C h a p t e r 4 C h a p t e r 5 b o n u s c h a p t e r A short history of TV advertising C h a p t e r 1 A short history of TV advertising C h a p t e r 1 The beginnings of TV advertising were quite humble. The first-ever television commercial was an ad for Bulova watches, airing on July 1, 1941, before the baseball game between the Brooklyn Dodgers and Philadelphia Phillies. The black and white commercial was 10 seconds long, cost $9, and only a few thousand people saw it. As television evolved—color pictures, more channels, and increased distribution—it became more usual to have a television at home, and the advertising opportunities boomed. Let’s take a look at how TV evolved over the years to become the world’s biggest mass medium and how it has fared since the invention of the Internet. The Federal Communications Commission issues commercial licenses to 10 US television stations. 1954 TV ad spending reaches $1 billion 1955 TV surpasses newspapers as an information source. 1963 Apple runs that Superbowl ad, marking the golden age of TV advertising. 1984 Internet advertising is born, changing the face of marketing forever. 1994 Netflix launches with a DVD pay-per-rental model. 1997 The Corona pandemic hits. Small businesses start making their first-ever TV commercials after airtime becomes more affordable than in the last three decades. 2020 Could this be the new golden age of television? TV advertising flourishes as marketers explore connected TV and OTT platforms to reach new audiences and drive marketing goals. 2021 and beyond YouTube was born. Google acquired the platform a year later for $1.65 billion. 2005 The top US subscription video services, Netflix, Amazon, and Hulu, generate $15 billion per month, and the majority of TV sold worldwide are connected TVs. 2017 Should you still advertise on TV in 2021? C h a p t e r 2 Should you still advertise on TV in 2021? TV remains a powerful medium for marketers to reach their audience and tell their brand story. Let’s take a look at the many benefits of advertising on television compared to other channels, such as print and digital. C h a p t e r 2 Television is high impact When Wrigley's ran a commercial showing people chewing two pieces of gum simultaneously, gum sales doubled. People started to chew two pieces of gum instead of one, just like they had seen on TV. That’s actually not surprising - television is a highly immersive experience that yields a great deal of influence on consumers. The combined power of music, video, and messaging enables brands to capture their audience’s attention, influence their emotions, and leave a lasting impact. Television’s ability to invoke emotion, influence brand perception, and drive brand recall is truly unique – online banners or simple print ads simply can’t compete. Consumers trust TV ads more Traditional forms of advertising, like TV, print, and radio, tend to enjoy higher levels of trust and credibility compared to digital channels. One study showed that 80% of US adults trust TV ads, whereas less than a quarter trust pop-ups. Another study showed that TV was the most single influential medium for US adults, with 60% of respondents admitting TV ads drive their purchase decisions. Television is glamorous In the words of communication theorist Marshall McLuhan, the medium is the message. Subconsciously, people will perceive your brand as being more impressive if they see it on TV, for no other reason than the fact that they have seen it on TV. This is because TV advertising is associated with iconic brands like Apple, Coca Cola or Nike, who dominate the Superbowl. Even today, television holds a high level of credibility and even glamour. 80% of US adults trust TV ads Marshall McLuhan, Canadian Philospher, 1911 – 1980 Privacy At a time when data privacy laws are becoming stricter, and cookie-based tracking is slowly being wiped out, television is considered a safe and effective way to advertise. This is because traditional TV advertising relies on context-based targeting rather than personal data. For instance, a brand wanting to reach males in their early thirties could play ads during the ad break of a football game. This enables them to engage with their target audience without processing any personal data at all. Brand safety If you’re an airline promoting cheap flights, you don’t want your ad to run next to a news article about a plane crash. This kind of thing happens all too frequently online, despite advertisers’ and publishers’ best efforts. With TV advertising, brands have much more control over how, where, and when their ads are shown. Context matters, and the brand safety aspect is a huge advantage for businesses. The main trends in TV advertising C h a p t e r 3 The main trends in TV advertising TV has come a long way since its simple beginnings back in the 1940s and continues to evolve. In the digital marketing world, it seems like there is a new algorithm update or social media trend every week. TV, too, is highly dynamic and marketers need to be aware of changes in technology and viewing habits to get the best results. Television is becoming more accessible to small businesses For a long time, TV was reserved for household names with multi-million budgets. However, after the prices of TV ads dramatically declined in March 2020, linear TV suddenly became more attractive to growing brands. UK broadcasters ITV and Channel 4 launched schemes designed to encourage small businesses to advertise on TV for the first time. Over 50 brands seized the opportunity, including The Great British Porridge Co, disinfectant range Zoflora, dogfood delivery service Butternut Box, energy drink brand Tenzing and language learning app Duolingo. More established brands, however, were unusually quiet. The coronavirus pandemic, social and political unrest, high unemployment rates, and slashed marketing budgets seem to have left many advertisers lost for words. C h a p t e r 3 Big players including Coca-Cola, Hyundai, Olay, and Ford all opted out of the Superbowl, which is usually the highlight of the year for TV advertising, where the biggest and best brands show off their creativity. Coca-Cola, who has run an ad before or during every Superbowl game since 2006, said it was a “difficult choice” but explained they need to ensure they are “investing in the right resources during these unprecedented times.” With larger brands stepping back at a time when smaller brands are finding their voice, the face of television advertising is becoming more diverse. OTT and CTV Today’s viewers are increasingly turning to new viewing options such as Smart TVs, tablets, and other connected devices such as Amazon Fire, Roku, and Apple TV. Millennials and Gen Z, in particular, consume a great deal of video content without even owning a television. For marketers, this opens up exciting new ways to engage with their audience, which is why many brands are excited about OTT and CTV right now. What is OTT? OTT stands for “over the top” and refers to film and television content shown to viewers via the Internet as opposed to via a traditional cable or satellite provider. While you might not have heard the term OTT, chances are you have definitely heard of popular OTT services such as Netflix, Amazon Prime, Hulu, and Disney+. What is CTV? The IAB defines connected TV as a “television set that is connected to the Internet via OTT devices, Blu-ray players and gaming consoles or has built-in Internet capabilities (i.e., a Smart Television) and is able to access a variety of long-form and short-form web-based content. How brands can benefit from OTT and CTV 80% of US households have at least one connected TV device, opening up a realm of possibilities for marketers. With OTT and CTV, brands can target, measure, and retarget their audience and reach viewers who don’t watch traditional TV. The traditional TV landscape has shifted, bringing engagement, data, and targeting connected with digital media to the television ecosystem. OTT is a powerful platform for reaching new audiences, especially the younger generations who no longer watch traditional TV, known as “cord-cutters”. Connected TV devices include: Smart TV a TV with a built-in internet connection, allowing viewers to stream online content without any additional devices. Connected Device also referred to as an OTT device, these internet-connected devices plug into your normal TV and enable viewers to access apps and video streaming. Examples include Apple TV, Amazon Fire Stick, Roku, and Chromecast. Gaming Consoles Nintendo Switch, Xbox, and Playstation offer more than just games - they effectively act as a connected device with in-built app stores for streaming video content. 80% of US households have at least one connected TV device The shift to measurable, targeted TV campaigns These days, marketers can use demographic and behavioral data to show targeted ads to different households, even if they are watching the same show. Let’s say you and the young family next door are both watching the same 6 p.m. documentary on your smart TV. While your neighbor is shown an ad for diapers, you might see an ad for chocolate or cat food, based on the TV network’s market segmentation. This is known as addressable TV. Sky conducted a five-year study on the effectiveness of addressable TV compared with traditional TV advertising. They discovered addressable TV boosts ad engagement by 35% and reduces channel switching by 48%. Facial recognition analysis demonstrated viewers’ level of attention to the screen is up to 35% higher and viewers are 10% more likely to recall an ad. The customer journey has changed Television has long been considered a broad awareness channel for brand building and reaching a wide audience. However, consumer behavior has changed, and so has the path to purchase. We all know the buyer journey is no longer linear. Consumers typically conduct extensive research online before committing, with 82% of customers researching on their phones before purchasing in-store and 45% reading reviews. While TV remains a powerful awareness channel, today's television—data-driven and targeted—can do a lot more than that. Addressable TV can tap into the same data sets as digital media, enabling brands to reach customers on the big screen in their homes as they research and set their buying criteria. Brands can nurture specific audience segments, build loyalty and advocacy, educate during the research phase, and drive sales. In a world where the typical customer journey spans multiple screens, TV advertising has adapted to become more relevant, targeted, and measurable. With modern TV advertising, marketers can create impactful, integrated campaigns to engage and re-engage audiences throughout the entire customer journey. This opens the door to cross-screen interaction and measurement and cross-device retargeting. Today’s viewers are distracted Research by Facebook showed that 94% of viewers have a smartphone to hand while watching TV. Whereas in the past, advertisers feared viewers switching channels or leaving the room during the ad break, nowadays, users are more likely to scroll through their social media feed. It’s not just media that’s fragmented, it’s people’s attention – and just because the screen is on, it doesn’t mean that people are watching it. In an eye-tracking study conducted by Facebook, only 56% of 15-second TV ads were watched for more than two seconds. So, why are viewers so distracted? Well, the main culprit was other devices, a phenomenon known as “digital second-screening” or “digital multitasking”. A group of TV networks and agencies explored which factors impact the effectiveness of TV advertising and found that age, multitasking, state of mind, and ad relevancy impacted brand recall the most. Fast-forwarding through the ad had the largest negative effect, followed by digital second-screening, which reduced brand recall by almost 50%. Paying for a TV spot that is going to be ignored and/or forgotten is pretty much a worst-case scenario for brand marketers. Let’s take a look at what you can do to ensure your TV campaigns are impactful and drive brand business objectives. How to ensure your TV campaigns succeed in 2021 C h a p t e r 4