A phone company’s ad reaches someone looking for a new wireless plan. A car commercial is seen by a driver whose auto lease is about to expire. A bank gets its message in front of a small-business owner who needs a loan.
Such surgical marketing messages are taken for granted on the Internet. Yet they are just now finding their way onto television, where the audience is big, though harder to target. As brands shift more of their spending to the Web, where ads are more precise, the TV industry is pushing back.
Using data from cable set-top boxes that track TV viewing, credit cards and other sources, media companies including Comcast’s NBCUniversal, Time Warner’s Turner and Viacom are trying to compete with Web giants like Google and Facebook and help marketers target their messages to the right audience.
“TV has to move in this direction,” said Brad Adgate, head of research for the media-buying firm Horizon Media. “There’s a lot of concern about dollars migrating to digital from television. This is a way for TV to keep pace.”
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Whether TV’s newfound embrace of data is working will be a topic discussed this week as media and marketing executives gather in New York during Advertising Week.
Targeted advertising is a big change for the TV industry, which for many years has sold commercial time based on broad demographics provided by Nielsen such as “18- to 49-year-old women.” The Internet, meanwhile, can track Web users’ every move online and sell that data to marketers so they can get their messages in front of more narrowly defined audiences.
As a result, advertisers have been shifting their spending to the Web. In the U.S., television ad revenue is estimated to drop 3.5 percent to $63.3 billion this year, while digital ad revenue will grow 17 percent to $57.7 billion, according to Magna Global. Advertisers will spend more on digital advertising than on TV advertising by 2017, the firm said.
It’s taken TV this long to catch up to the Web partly because the technical capabilities just became available. In some ways, there may be no better time for traditional media companies to win back advertisers as online marketing becomes rife with concerns about fraud and as new software lets people block ads on mobile devices.
Yet so far, the TV networks’ data-focused sales pitch has been slow to catch on. Advertisers committed 10 percent less money to broadcast networks and 5 percent less to cable networks in this year’s “upfront” market — the time each spring when marketers buy commercial time in advance of the fall TV season — compared with last year, according to estimates by Magna Global.
TV’s massive audience, long its main argument for wooing advertisers, has been shrinking and showed “disappointing results across the board” last week as the new fall season began, Doug Mitchelson, a media analyst at UBS, wrote in a note to clients Friday.
While TV viewership is often huge, especially for live sporting events, some advertising experts say digital advertising has the upper hand.
This week, Facebook introduced a feature that attempts to further encroach on the television ad market by letting marketers buy online video ads similar to how they purchase commercials on TV.
Still, NBCUniversal chief executive officer Steve Burke said this month that he is seeing “tremendous strength across the board” in the scatter market — where advertisers buy commercial time that’s left on the network after the “upfront” season ends.