Broadcast television to be replaced by the Internet” and “Advertising moving to the Internet” are a couple of the screaming headlines today. But, what's really happening? More importantly, what's the real effect?
Certainly, the number of eyeballs in front of a TV set versus those in front of a computer monitor sets the stage for a huge competition. Like it or not, in virtually every survey taken, the results consistently show the computer winning.
All that notwithstanding, in the Organization for Economic Cooperation and Development's recently published “Communications Outlook 2007,” the group ranked U.S. TV viewing households number one in the world at eight-plus hours a day in front of the tube.
According to a recent study by IBM, nearly 45 percent of respondents said they spent more than four hours per day on the Internet. Ah, wait a minute, you ask. Where are all those hours coming from?
Unlike television, the Internet is widely available in the workplace and, lamentably to employers, some of that work time is spent as personal time on the Internet — but, that's a topic for an entirely different article. Back to why capturing those eyeballs is so important to us. Right! Ad dollars. Some people believe that broadcast television is in a life or death struggle with the Internet for advertising dollars and that television will inevitably lose.
By definition, the Internet fractionalizes its audience. However, a compelling quality of the Internet is interactivity, which creates advertising leverage by delivering targeted ads.
Television, on the other hand, remains unsurpassed in advertising effectiveness when the target of the advertiser is to deliver a message to a single, massive audience in a timely and measurable fashion. Television excels by guaranteeing delivery of an advertiser's message simultaneously into millions of homes. Not only do advertisers recognize this, but viewers share the same opinion.
For example, in that same IBM study, a question to respondents on advertising effectiveness revealed broadcast television comfortably in the lead at just over 50 percent, followed by cable at close to 20 percent and the Internet at 10 percent. Clearly then, all signs point to a continuing ability for television to drink heartily at the well of advertising spending for a long time to come.
In this article, as in most, the term “television” is an encompassing generic. For purposes of real analysis, however, it needs to be more meaningfully defined with a descriptor, such as broadcast television, cable television or satellite television. In the game of eyeballs, satellite television is a distant third in terms of advertising effectiveness. Cable television is another matter. Content for cable, whether dramatic or comedic, has the advantage of being able to take an edgier path with program development, while broadcast television is mandated by censorship requirements.
As a result, cable has been delivering some blockbuster series, and blockbuster series mean viewership. But cable is enjoying success even beyond the edgy program material.
A recent weekly Nielsen ratings for broadcast ranked NBC's “America's Got Talent” at number one with 10.8 million viewers and CBS' “60 Minutes” number two with 9.9 million viewers. For that same week, cable's Disney Channel ranked both one and two with “High School Musical 2” (single-day ratings) at 17.2 million viewers and “Hannah Montana” (single-day ratings) at 10.7 million viewers. Those are significant viewership numbers for cable and such a plus differential over broadcast that advertisers must be sitting up and taking notice.
As a broadcaster, the next time you see one of those “Internet taking over television advertising” headlines, you can be comforted by your distinctive capability to deliver programming to a massive audience, but you had better think twice about who the elephant in the room really is.
Anthony R. Garagno is a consultant and former industry executive.
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