3 Reasons You Should Move TV Ad Budgets This Year
In 2022, the Olympics, World Cup, and Midterm Elections will restrict television ad inventory
For decades, television was the golden child of media: slick and entitled. But those days are long gone. Digital’s share of ad revenue first topped television’s share several years ago. In 2022, spending on social media alone will surpass the fistful of dollars handed to TV. Consumer behavior has changed, but the money hasn’t caught up. Linear television rakes in about a third of advertising budgets. Its share of daily media consumption? Half that.
As we enter a new year, it’s a good time to ask yourself some smart advertising questions. Have you reviewed your marketing mix lately? Are you overspending on the Big Four broadcasters and their affiliated channels? If so, follow the audience and reap the rewards. Here are three reasons now is a great time to shake up your media plans and move money away from TV.
Ad Inventory Down
2022 is one of those years in television, great for the networks and stations, terrible for advertisers. Big events will pull buckets of advertising inventory out of the marketplace. The Winter Olympics runs February 4 to 20 on NBC, USA Network, and CNBC (English), and Telemundo and Universo (Spanish). The FIFA Men’s World Cup Qatar will be on FOX and Telemundo from November 21 to December 18. The US midterm election is set for Tuesday, November 8th. All 435 House of Representative positions are up for grabs, plus 34 Senate seats, 36 governorships, 30 Attorney General positions, 27 Secretary of State . . . the list goes on and on, including elections for state legislative and local offices. And every candidate will need to place ads.
The law of supply and demand makes it clear. When TV ad inventory is restricted, the cost per thousand skyrockets. Plus, US law requires broadcasters to sell qualified political candidates the lowest commercial ad rates 45 days before a primary and 60 days before a general election. And we all know stations bump up charges to advertisers during these times to raise the lowest average unit rate and maximize political ad revenues.
In 2011, 91% of households subscribed to pay TV. At the time, cable subscriptions and cable network advertising revenue made huge profits for owners. But times have changed. Nielsen’s most recent Total Audience Report shows that 64% of households subscribe to pay TV. Broadcast and cable TV’s audiences keep shrinking. Plus, outside of live sports, their audience demographics are graying – and quickly.
Say a company decides to move money out of television. Where’s a good place to invest for a strong ROI? Here are three great options.
Audio – whether Radio, Podcasts, or Streaming – provides the immediacy of television, but with a lot more warmth and trust. Audio is the trusted companion that we take with us throughout our day, whispering in listeners’ ears morning, midday, and night.
Connected TV (CTV) and Over-the-Top (OTT)
79% of households own an Internet Enabled TV Connected Device. That’s a lot of connected glass. You can also follow some of the consumers who are streaming via ad-supported apps. We can connected the dots and offer assurances.
Younger audiences are flocking to online video outlets like YouTube, which is priced at a cost-per-view model. Advertisers only pay when the user views an ad in full (or up to 30 seconds if the ad is longer than that.) Plus, CPMs as a whole are lower than broadcast TV. YouTube offers an excellent value for local customers – and it can drive great results.
As you’re looking to switch budgets away from television, our team at Audacy can help. With a focus on results, multi-channel media buys and reaching your audience – the options outside of TV look (and sound) clear.