Posts Tagged: TV sponsorship

Online and over here

Amid the cutbacks and regulations that have hamstrung some advertising categories, there is one that has recorded rapid and continual growth in the money invested in advertising in general, and TV in particular. It is a category that has access to a wealth of data to evaluate the success of its marketing activities, much of it instantaneous. It has witnessed rapid growth in sales revenues and the number of brands entering the market. I am talking, of course, about online brands.

Yesterday morning, we held an event (and streamed it live online) looking at this phenomenon and exploring why it is happening and how best for online brands to use TV. We’ll be making it available on the Thinkbox website to watch in the coming weeks.

It is amazing to think that only five years ago this market category hardly appeared on the radar. In 2004 a total of 34 brands spent less than £10 million a year on TV. Last year the market was worth over £180 million to TV, with a total of 239 brands accounting for 5.5% of all TV advertising revenues; and that doesn’t include the 20+ programme sponsorships in which they also invested. It is an average annual growth rate of 172%.

Other media have also benefitted from this dynamic market, but it is TV where these online brands have invested the vast bulk of their money. In fact, TV accounted for nearly three quarters of their offline media spend in 2009.

There are many reasons for this. The complementary nature of TV and online means that TV drives online response better than any other media channel. But it is not only response generation that is responsible for TV being the predominant marketing channel for online brands. It is TV’s ability to build brands, through fame and emotion, which has kept them coming back.

For brands that have little or no physical presence, the ability to create an emotional connection with its consumers becomes even more important. Meanwhile, the power of fame to create word of mouth, awareness and, most important of all, trust cannot be denied, as the 700,000 Facebook fans of Aleksandr the Meerkat would no doubt agree.

Also, the growing phenomenon of ‘two-screen viewing’ – concurrent consumption of TV and online – has helped facilitate response. A brand can go from initial awareness to purchase during the course of a single commercial break, making TV a point of sale medium in these circumstances. New research we’ve just carried out shows that 94% of the UK claims to have gone online as a direct result of something they’ve watched on TV in the last 12 months.

Consumers’ growing confidence online means they instinctively know where to go when a TV commercial engages them and creates demand for a product or service. Our growing arsenal of evaluation tools demonstrates TV’s significant role in this process more and more and online brands have been voting with their budgets.

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Judging from the sofa

David Reviews, the influential TV and film aggregation site, has recently started something called The Lunch Break. This is a selection of TV ads put together to watch as if in an ad break. The very good idea behind this is obviously to better replicate the experience that viewers have.

People rarely watch any advertising with devoted attention – unless they’ve specifically sought it out to view again. TV viewers watch a series of different ads from non-competing markets with varying levels of attention (all of which we now know are valuable to advertisers, thanks to neuroscience).

This is not astonishing; I’m clearly not breaking much new ground telling you this. But it occurred to me while I was on the jury for the Campaign Big Awards that when we judge ads they are dislocated from their natural habitat, and often alongside others in the same market.

Advertising is affected by many things, but one of its primary concerns is context; the TV programmes you’re rubbing shoulders with, the pages of the specific magazines or websites you’ve bought, the posters in those particular locations. And let’s not forget the emotional and physical contexts of rushing to work or relaxing in the bath and cuddling with your kids/cat on the sofa. But when judging awards normal contexts are lost and artificial ones imposed. It is impossible to recreate the actual viewer experience when lined up alongside an eclectic bunch of people you don’t know well in a hotel room focussing solely on a screen and watching 60 TV ads in a row.

Where TV is concerned, the influence of the context in which we watch is incredibly significant. For sponsorship credits I would say it is impossible to judge them fairly when detached from the editorial context in which they appear and with which they are supposed to relate.

Later this year we’re publishing new research into the influence of watching TV with other people, but initial findings show that it exerts a big influence on the impact and effectiveness of TV’s advertising.

So, taking all this into account, perhaps it would be better for creative judging if ad judges convened at one of their palatial country houses to lounge around the living room watching Peep Show or The X-Factor, eating a takeaway curry and letting the short-listed ads appear serendipitously, just as the media planning Gods intended. Let’s see what works best then.

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New ways, new wonga

Prepare for the whiff of burnt rubber in the air as the government begins its u-turn on product placement in UK TV programmes.

There is no doubt that this is a fair decision. Product placement is already on our screens in various forms within acquired programming and as legitimate prop provision. We can trust that broadcasters, programme makers and advertisers will be culturally sensitive and won’t allow it to alienate British viewers. The difference to the viewing experience will be negligible and programmes will arguably become more authentic.

The introduction of product placement raises some interesting questions. Who will set the price and do the deals? Who will benefit from the money (TV companies, agencies, producers…)? Will this tempt advertisers who traditionally haven’t used TV as much – Prada, Louis Vuitton – onto our screens and into scripts where they can be confident of the environment? Will it feature in sponsored TV shows; could Toyota sponsor a show where Skoda has been placed for instance? Could brands be allowed to indulge in negative product placement, like getting Frank Gallagher to wear your competitor’s sports shoe? How will its effectiveness be measured?

No doubt these questions and many more will be clarified during the consultation period. But product placement also raises a concern that I’m keen to make very clear.

The estimated amount of revenue it will bring in is modest compared with spot advertising, but no less welcome for that. Figures between £35m over 5 years up to £100m a year have been bandied about. Whatever it is, it will join the growing number of sources of advertiser revenue additional to the £3.4bn of TV spot advertising. Ofcom reported recently that TV sponsorship was worth £180m and interactive services £70m in 2008.

This liberalisation has come about in order to attract extra, new money into original UK TV productions. We must work together to ensure the revenue for product placement is new money and doesn’t cannibalise the existing ad revenue, much of which goes into UK production.

It would be unbelievably idiot of the TV industry to promote placement by undermining the status of spot advertising. Yet there are signs of that happening already within the placement and production communities.

There have been a few alarming statements made in response to the expectation of relaxation, re-igniting some of the common untruths about ad-skipping and attention. We don’t need product placement because spot advertising doesn’t work; we have never watched so many TV spots at normal speed – 2.45 bn a day in the UK – and their effectiveness is growing. Anyone who tries to sell placement by giving misinformation about TV spot advertising will enjoy Thinkbox’s full displeasure. Don’t even think about it.

Product placement is a completely new TV commercial opportunity, complementary to other TV formats, that deserves its own new cash.

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