Rising to the multi-channel challenge
Following the 2014 Automated Trading Debate, hosted last month, BrightRoll’s Andy Mitchell says brand marketers must adjust to the new multi-channel future.
With global TV advertising forecast to rise 54 per cent by 2020 compared to 2010, according to Digital TV Research, many brand marketers are tempted to stick with the mass-market medium they know offers the broadest reach. But technology has evolved at a rapid pace and the adoption of video consumption on mobile devices has fostered an audience whose attention has become increasingly fragmented.
With this rapidly changing landscape, the challenge for today’s marketers is not to abandon one medium for another. Clearly, television continues to grow, and a shift away from that medium would be fatally myopic for any brand marketer. Instead, we must look deeper into how these channels can complement each other, and enable marketers and agencies to better connect, engage, and convert customers.
In the US, for example, TV penetration is king, with over 95 per cent of American households owning a TV. TV ad budgets, meanwhile, are the largest for any media segment with a forecast $68 billion spend in 2014 in the US, according to eMarketer.
While TV remains the ‘first screen,’ video consumption on mobile devices is increasing at record levels. CMO.com reports that online video consumption across mobile devices is accelerating rapidly, with smartphone increases of 73 per cent and tablet increases of 42 per cent year over year (Q1 2013 vs Q1 2014).
eMarketer states that US mobile advertising grew to $9.69 billion in 2013 and is projected to reach $17.73 billion by the end of 2014. The number of US mobile and connected TV viewers will reach a staggering 204.6 million by 2017.
The situation is mirrored across the pond. eMarketer recently cited data from a survey by FreeWheel revealing that of the video ads watched by Brits in the second quarter of 2014, 17 per cent were delivered to smartphones and 15 per cent to tablets. In the same period, 7 per cent of tablet users in the US watched video ads on their devices, and 13 per cent of people with smartphones did the same. So the trend seems even more pronounced in the UK.
Furthermore, although TV spend is expected to take the lion’s share of ad spend in 2014 (around 26 per cent), eMarketer states that it expects UK mobile adspend to surge by 90 per cent to £2.26 billion in 2014 – 15 per cent of total adspend.
The same report goes on to predict that in 2015, mobile will overtake all of print, including both newspaper and magazines; in 2016, it will overtake television; and in 2017, mobile will become the single biggest ad channel in the UK market.
Various reports paint a similar picture across the rest of Europe. According to IAB Europe, online video advertising grew by 45.4 per cent in 2013, to nearly €1.19 billion – the first time in Europe that it had crossed the €1 billion mark.
All these statistics clearly reveal a marked shift in consumer behaviour – and one that is vital for brand marketers to recognise to deliver maximum reach and effectiveness for their clients.
This is backed up by research BrightRoll commissioned and was conducted by Nielsen in the US, which shows reach can rise as much as 12.7 per cent when TV advertising is aligned with video advertising delivered to mobile devices. This figure was for the consumer packaged goods (females aged 25-54) category, but strong results were found for auto (11.9 per cent), financial services (9.9 per cent) and telecoms (9.5 per cent).
The study also uncovered an important spend characteristic, showing that shifting 15 per cent of a brand’s TV ad budget to mobile cuts the cost per target point* by as much as 13.7 per cent. Nielsen estimates that for marketing campaigns to capture more than 60 per cent of their target audience, US brands often spend more than $707,000 per reach point (namely, cost per point).
Furthermore, it’s not uncommon for brands to spend $1,389,000 or more to acquire one incremental reach point after 70 per cent of consumers have been reached. This dramatic increase in incremental cost per point indicates that marketers often hit a point of diminishing returns once they hit the 60 per cent and 70 per cent thresholds.
So there are clearly huge benefits to be gained by closely aligning TV and mobile campaigns. And this is heightened further when you consider that the crucial 18-24 age group in the US takes up 19 per cent of smartphone video consumption and just 8 per cent of TV, according to Experian, with smartphone ownership across the demographic rising to 85% in the second quarter of 2014, up 8% on the same period in 2013.
What’s more, with the landscape changing faster in Britain than the US, UK brand marketers need to be particularly focused on their game in order to rise to the growing multichannel challenge.
Andy Mitchell is European managing director at BrightRoll.
The full report – Mobile Video Advertising Strengthens TV Media Investments – can be downloaded here.
*1% of the specifically targeted audience, not the total audience, being reached by an advertisement.