Is Hallmark’s decision to abandon its sentimental television advertising this holiday season for digital marketing a spinoff of cable-cutting consumers? Maybe; although a steady school of media executives and analysts will argue the point. Regardless of whether cutting ties with cable providers ever fully manifests, the internet has changed how we spend our time and money. Digital marketing isn’t going away; in fact, it is expected to surpass traditional marketing within the next two years.
“While it is difficult to completely isolate one factor that is driving changes in ad spending from the historical trends, our model suggests that digital substitution is the primary driver contributing to changes in the television ad ecosystem today,” FTI Media & Entertainment Team Co-leader Philip Schuman said. “We believe that effective data-driven targeting, low CPMs, and vast inventory, as well as a direct feedback loop that enables advertisers to calculate a return on digital advertising dollars spent, has enabled them to allocate less to get more,” Schuman said.
American households with internet service, but no cable television, jumped by 12 percent since 2013, according to media researcher SNL Kagan. Nielsen data indicates that in the U.S., an individual’s daily media time spent with TV has decreased from 44 to 36 percent. Meanwhile, time spent with smartphones has grown from 3 percent to 24 percent.
Currently, more than 50 percent of Americans stream both movies and TV monthly with only 45 percent watching live television programs, according to a Deloitte survey. The same survey revealed 75 percent of consumer’s multi-task during traditional television advertising but are more likely to watch digital ads. And 62 percent of those surveyed say they’d watch digital ads if it significantly lowered their subscription rate.
Maybe that’s why October saw digital marketing spending up 34 percent with content sites, like Yahoo getting 22 percent; social media websites 129 percent; and video sites (70 percent). Even digital TV networks saw a 21 percent spike. Yet, October was television advertising’s most fruitful since January 2014 with double-digit growth for the original 3 broadcast networks; even Fox was up over last October.
Keeping up with changing behaviors may not be easy; but some companies, like Hallmark, are taking a calculated risk.
“It wasn’t a low-cost investment,” Katherine Cartwright, a principal with Hallmark’s media agency, Criterion Global, said of the decision to move to a digital marketing campaign. It does give the greeting-card company a way to target millennial moms in a way TV does not, she said. “It’s a much longer-term investment.”
TripAdvisor, a travel-planning site, expect to suspend their TV advertising in 2016; spending some or all of their ad budget in other mediums, like digital marketing. They spent $20 million on TV ads in the 3rd quarter alone.
Still, there remain skeptics of Hallmark’s decision; not only to move away from television but to shift gears from sentimental holiday moments to what some see as irreverent; even comedic digital ads in the hopes of going viral.
“Television is unique, in all forms of advertising, in being able to deliver that emotional power,” Jim Nail, principal analyst for Forrester Research, said. “I don’t believe human nature has changed so much that those kinds of classic impacts of marketing are irrelevant.”
Human behavior, however, has changed. You don’t have to look further than roughly 15 million viewers who experimented with Yahoo’s live streaming of the New York Bills and Jacksonville Jaguars; averaging 2.3 million viewers. Thirty-three percent were from outside of the United States. The NFL was reportedly happy with the results.
Imagine what that means for future Super Bowls, historically among the most watched television with viewership up around 100 million nationwide. For some, the biggest draw is the launch of new TV advertising campaigns.