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| 4M Performance - 1st Qtr. 2020 |
Marketing
For many brands TV is the best media for reaching target markets. Yet, there is no doubt that TV as an ad medium is on the decline. According to Nielsen, TV viewership is decreasing at a rate of 3-4% a year, principally due to cable-cutting by consumers - who are switching to content streamers.
To compensate, TV ad load (time spent each hour devoted to ads) has been on the rise. For 2017 the ad load rate was 10.9 minutes per hour, in 2018 it was 11.2 minutes - the rate will increase again in 2019. Higher ad loads offset the decrease in viewership so revenues can remain constant. This trend bodes very badly for those brands that rely on TV advertising as ad loads cannot continue to increase to compensate for declining viewership. To counter, the networks and advertisers need to improve their targeting and audience measuring.
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| TV ads need to get more targeted and measurable |
The two largest streamers, Netflix and Amazon Prime, have no commercials, although both use paid product placement in their content and Prime sells/rents movies. The likelihood of either using ads, given the slew of players now in or entering the subscription streaming game, is a non-starter.
My prediction is that there will be a move away from the number and frequency of 60 and 30 second TV ads. These will be replaced with 5 to 10 second highly targeted ads. I also predict that long infomercials, and perhaps QVC and HSN, will become passe' as viewers' attention spans get shorter and shorter and access to products becomes easier and easier.
Jim Lavorato, Founder 4M Performance
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