Are Digital Dollars Set To Surpass TV Later Than Expected?

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How much faith do you and your colleagues still have in pundits and predictions?


Given the recent track record of wonks, soothsayers, curanderas and individuals who hold Nostradamus in high regard (note: these individuals should not be in the CFO role at your company), some forecasts may be as accurate as the one that said it would be 17c in Central Park on Saturday night — not 17º Fahrenheit.

One of the great forecasts that have arrived in recent months, with respect to ad dollars and trends, may be just as off as that weather forecast for New York City. This forecast is centered around digital ad spending and when, exactly, digital ad spending will sail past that of traditional television.

It’s set to happen this year. But … the IAB’s champagne corks may not be popping at a Memorial Day or Labor Day party on a sunny summer’s eve in Silicon Valley. A Thanksgiving feast or end-of-year holiday fête may be a much more likely local for singing ¡Vive le Révolution Digital! 

And, how ironic would it be if those champagnes were popped while watching ad-filled NFL football on Turkey Day or another stellar edition of Pitbull’s New Year’s Earache and Nineties Hip-Hop Horror Night on a big-screen TV?

TV ain’t dead. The numbers prove it.

As shared by Jack Myers TomorrowToday, Standard Media Index CEO James Fennessy has expressed caution to those who thought 2017 would be the year that TV loses the battle for ad budgets to those little digital darlings led by Facebook and YouTube.

“I’m not disputing that Digital ad spend will surpass traditional television this year,” Fennessy notes. “Rather, I am cautioning that, based on SMI January 2017 results, the year-over-year race may be closer than anyone anticipates.”

Indeed, when looking at total market growth by media for the first month of 2017, digital dollars are up 6.3%.

But, non-national TV dollars are up 6.8%, and national TV dollars grew 5.7%, year-over-year.

There’s also some decent growth for radio, mi gente.

update-total-growth

Poor, poor print. But, that’s not a surprise. And, given the Sunday edition of the St. Lucie News Tribune powered by the USA TODAY Network I purchased for $2 yesterday, deserved.

Credit TV and radio for still delivering quality content that consumers and advertisers can count on.

For the record, Non-National Television includes Spot TV, Syndicated TV and MSO Local.

Overall, there’s 5% growth in U.S. media spend in January 2017, compared to January 2016, Fennessy notes.

It’s abnormal, and it’s a welcome surprise.

“This uptick is significant as it occurred in a historically slow month during a non-election, non-Olympic year marked by economic and political uncertainty,” Fennessy says.

Intrigued by the positive increases, SMI has five trends it is now watching:

  • Digital ad spend continues to experience single digit to low double digit growth.
  • Linear TV remains a powerful and reliable driver of ROI.
  • The Trump Effect on TV assumes many shapes and forms.
  • Increased competition for Sports ad dollars.
  • Out-of-Home (a transformed industry) becomes highly relevant.

A ‘Powerful and Reliable’ ROI Driver

“With attribution, optimization and data intelligence taking center stage, TV — linear television in particular — provides verifiable results to marketers and their agencies,” Fennessy notes.

CMOs appear to understand this, based on the January ’17 SMI data. In fact, 8 of the top 10 national TV advertisers, by volume, show year-over-year growth in ad spending.

Fennessy is certainly pleased by this activity.

 

“The rationale for this shift back to television varies by category,” he notes. “But, in a culture that encourages innovation these smart marketers are seeing through data intelligence and ROI metrics that the medium works.”

top-10-national-tv-spenders-jan-2017

Pharma. Food. Fitness … and Farmersba ba-ba ba-ba ba-da-dah.

At the same time, there’s “cautious” growth in digital — perhaps a result from metrics queries from CMOs that recognize the importance of Google’s YouTube and Facebook for reaching consumers but now ask just how important they are for building a brand’s ROI, as opposed to maintaining a brand’s ROI.

“In 2017, we expect marketers to look closely at digital attribution and spend as the industry works to solve its widely-publicized issues including unreliable metrics, ad blocking, viewability, etc.,” Fennessy says.

Not mentioned in Fennessy’s commentary is radio, the forlorn old friend that may be the 2017 Chrysler Pacifica of media, rather than the Porsche 718 Boxster that some may view as the vehicular image of digital media.

And, that’s just it. Digital media is flash and pizzazz, but the Chrysler Pacifica is a tremendous, award-winning success that delivers to families in ways a sportscar can’t.

For CMOs, it’s time to look at the award-winning minivan that radio and television continue to be a little bit closer, and with an open check book.