Broadcast VS digital video advertising: Which one is king?


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Broadcast VS digital video advertising: Which one is king?

My personal perspective

In 2018, I worked for an agency on a small team that specialized in media buying, and broadcast advertising played a prominent role. There was a massive debate at the time about whether or not the broadcast market was nearing the end of its life. I remember our team even had scheduled discussions on the matter.

I can recall the sales meetings and keynotes presented by our local broadcast resellers reassuring us that the broadcast industry was far from dead, in fact, it was making a comeback. I remember thinking, “Yeah, right. At this point, cable’s replacement is already on the rise. No way is broadcast going to stick around for the long haul.” 

This was back when the most notable streaming services were Netflix and Sling. Hulu was on the rise, but it’s worth noting that it was safe to assume most homes were not cord-cutting, and it would have been near impossible to convince our clients to put their chips in the streaming game.

I made a good pitch for digital at the time. Looking back, I’m unsure whether or not my boss took it to heart. But I can say, perhaps not so humbly, that I made some bold predictions that came true. Albeit a few that didn’t.

Back then, I was predicting broadcast would die off in the coming years. In addition, I thought Cable would reign as the king for several more years. Finally, I thought online advertising would be the heart of every advertiser’s strategy. I was looking intently at advertising channels like YouTube, Facebook and Hulu, which were rapidly growing in user base. I also particularly loved the possibilities of targeting that came with digital advertising streams.

Alas, I was wrong about broadcast TV. It was a truth that all the broadcast resellers were trying to make in all of their keynotes when, admittedly, I was too young and arrogant to consider the possibility. 

The case for broadcast 

Broadcast television offers several advantages to consumers. It’s free, local, and relevant, and it doesn’t require third-party services like cable or the internet. Most importantly, it’s a trusted source of local news and emergency information. While there may be a decline in the audience size with upcoming generations, broadcast TV may continue to play a role in our lives for many years to come, as any household can set up a TV to receive local channels with a cheap antenna. According to Nielsen, the average American adult spends nearly four hours a day watching live television, and broadcast networks like ABC, NBC, and CBS make up a significant portion of that viewership. Additionally, a survey conducted by the National Association of Broadcasters found that 56% of Americans still rely on over-the-air broadcast television to watch the local news.

Let’s look at a couple of benefits of broadcast for a second:

  • You can target your ad around live media (the latest episode of “The Bachelor” or the 7 o’clock news)
  • You can create extra hype with social content to go along with it simultaneously. – because you know the run schedule for your ad.
  • Your ad plays inside many local businesses’ waiting lobbies, such as doctor’s offices and even restaurants.
  • People still see broadcast as this magical “on the TV” scenario. We often hear customers, friends and family proclaiming, “I saw your ad on TV!” with a level of enthusiasm and excitement that you don’t really get when they see it through digital channels.

The downside of broadcast advertising is you only have a few means of tracking success. It gives a new meaning to “traditional advertising” in that if you do it, your only means of gauging success is if you can “feel it” with your increased foot traffic. Not to say you can’t track phonically or by website visits that came from the ad, but you’ll never get the insights of engagement that you get with digital. That being said, a long-term broadcast plan is well worth considering if your focus is on the long-game local awareness. Nothing else gives you the same level of local “clout” than airing your commercial during the local news.

When it comes to advertising, whether broadcast is the right choice for you over digital or streaming depends on several factors. One of the most important considerations is your overall advertising budget. Other factors to consider include the age of your target audience and how locally-driven your product or service is. Nonetheless, whether broadcast is more critical to your advertising strategy than your digital approach depends on your unique situation. However, it’s safe to anticipate that broadcast will never entirely disappear, but rather, it will have a smaller audience.

For advertisers, it’s essential to keep up with these changes and adjust their strategies accordingly. So, which option is better for you as an advertiser: broadcast or digital streaming? We’ll have to dive into the depths of what streaming has to offer to find out.

The case for streaming

Not only do consumers prefer streaming services, but they also provide better targeting capabilities, more detailed data insights, and a cost-effective way to reach audiences. But before I get ahead of myself, let’s clarify a few terms here. When it comes to streaming ads, there are a few different types that we need to clarify: 

Online Video Advertising.

Although the name may be a bit vague, this was one of the original ways to place your advertisement on the internet. These are ads that are integrated into the content you are browsing on your desktop or mobile device. Pre-roll ads, similar to the ones you see on YouTube, are a prime example of this. My personal favorite attribute of online video advertising – these platforms offer powerful ways to target your audience and track results.

Over The Top (OTT) streaming ads.

OTT, or “over the top” advertising, is a method of distributing your ads onto popular streaming services. Typically with the intent to get your ad to play on an internet-connected television or Connected TV (CTV) device. While OTT has nearly just as good audience targeting capabilities as online video and is more comparable to broadcast in that it gives that “on-tv” recognition, it does have a common negative opinion: while you can stream your ad on services like Hulu or Disney+, many of the most popular streaming platforms offer a premium subscription without ads that consumers opt into. But don’t let that stop you. Just because some platforms offer no-ad subscriptions doesn’t mean your ad won’t reach a massive pool of people. In fact, 88% of U.S. adults regularly consume OTT content with ad support. 51.1% of the U.S. has already cut the cord from cable TV, and truly committed cord-cutters out there are using services like Sling or streaming news, which commits to playing your OTT ads. Furthermore, ad-friendly streaming options are growing in popularity with newer platforms such as Paramount+, Peacock, tubi, HGTV, Discovery, NBC Sports, and the NFL network. Free OTT video platforms that have ad support had a user base of 2.6 billion in 2020; in 2023, that’s expected to reach 2.82 billion. Many advertisers are seeing the potential here, and because of it, $119 Billion dollars are expected to be spent on OTT advertising in 2023.

Here are some compelling statistics that highlight why streaming ads are the future of advertising:

  1. Growing Popularity: OTT users in the US have increased from 2.2 billion in 2017 to 3.26 billion in 2022, with expected growth to 4.2 billion in 2027.
  2. Advertiser popularity: The OTT video advertising sector has one of the largest market volumes, expected to reach $205.10 billion in 2023.
  3. Ad Viewability: Streaming services offer higher ad viewability rates than cable or broadcast TV. According to a study by Innovid, OTT ads had an average viewability rate of 95% in Q3 2020, while broadcast ads had viewability rates of 84%
  4. Better Targeting: Digital advertising allows for precise targeting of audiences based on demographics, interests, and behaviors. A study by Nielsen found that addressable advertising (targeting specific households) in streaming platforms resulted in a 32% increase in ad recall compared to traditional linear TV advertising.
  5. Detailed Data Insights: Streaming platforms provide advertisers with detailed data insights on audience engagement, ad views, and impressions. This allows advertisers to adjust their campaigns in real time and optimize their ad performance.
  6. Cost-Effective: Streaming advertising is significantly more cost-effective than cable or broadcast advertising. According to eMarketer, the average CPM (cost per thousand impressions) for digital video advertising in the US was $22 in 2020, compared to $70 for cable TV advertising and $27 for broadcast TV advertising.
  7. Geolocation retargeting: OTT ads can be served up to households based on where consumers travel throughout their day. It does this by knowing their cell phone’s location. An example of how this can be huge for advertisers: you could target anyone who has visited the brick-and-mortar location of your competitor.

In summary, the trend toward streaming services is only going to continue, and advertisers need to adapt to this change. The superior targeting capabilities, detailed data insights, and cost-effectiveness of streaming advertising make it an obvious choice for any advertiser looking to maximize their ad spend and reach their desired audience.

The winner’s circle

Well…there’s no denying streaming looks best on-paper. So, where does that leave broadcast – the old tried and true? Broadcast is a tricky one, and I’m sure a lot of marketers would say to ignore it altogether. But I did that once before and was grossly mistaken. I’m not too eager to do that again; at the same time, it’s hard to compare broadcast to digital streaming. It’s one of those oranges vs. apples types of situations. Broadcast doesn’t have the means of tracking that digital does, so there’s simply less data to compare.

What I can say for broadcast is that you’ll never capture the same level of local clout with digital. Broadcast has a strange superpower to stay relevant in a growing digital age due to its local nature. And because of it, many businesses continue to gravitate to broadcast over alternatives. 

If you’re faced with making the decision of just one of these advertising avenues, my first suggestion would be to work with a marketing strategist to help you dial it in. The most important deciding factor should be showing up where your audience frequents. If you have to make a decision on your own, streaming seems to be the most balanced route in that it should work for nearly any business or situation. 

But as an advertiser, it’s essential to understand the strengths and weaknesses of each advertising channel to determine which one is best suited for your needs. Broadcast television continues to have a sizable audience, making it a valuable option for advertisers with the right target demographic and budget. However, the rise of streaming cannot be ignored, and advertisers should consider incorporating it into their advertising strategies as well. Ultimately, finding the right balance between traditional and digital advertising channels is crucial for maximizing the impact of your advertising campaigns.

Hopefully, this article helps you while you’re putting together your annual marketing plan. And if you need help, don’t hesitate to reach out to a cat near you. We’d love to hear your thoughts and opinions on this matter. Do you think I’m missing a perspective on this? Do you think broadcast’s days are numbered or here to stay? As always, we’d love to have an ongoing conversation about this with other businesses and marketers in our community.

Dustin Keeslar, 

Marketing Strategist + Operations | CreativeCat.Co

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