“Why TV is becoming less effective and why TV advertising rates will rise”

MARKETING TIPS

by Ken Mitchell

22 April 2003

Since its introduction in Australia in 1956, TV has proved a major tool for advertising.

Back then, people were simple and unsophisticated and tended to believe what was served on television.  They watched with some awe and, in the main, in total belief as the simple black and white ads rolled by.  With the novelty of television, viewers soaked up everything.

Now almost 50 years later, ads are much more sophisticated and infinitely better produced than those of yesteryear.  However so are the audiences - but more so.  Audiences are now so sophisticated that TV advertisements are treated by viewers with a certain amount of ho-hum.  Research shows that viewers flick channels with the remote, leave the room or look away with as few as 11% actually watching the ad and fewer than 10% of those actually absorbing the ad.

With falling recall rates and minimal attention spans, TV ads are so much less effective that, in an effort to reduce the “clutter” and put more recall back into the media, American channels are seriously considering reducing the volume of free-to-air television advertising.

To cover costs, television stations will not only have to raise the prices of the fewer slots available for ads but also increase the cost spread of low audience against peak audience.

This will mean fewer but more expensive advertisements in the future.

With so many traditional and emerging options to spend on promotional budgets, television stations will be jolted more than other media as more and more marketing managers spend a larger proportion of their advertising budget “below the line” options (i.e. non-advertising) including the Internet and public relations.  This will consequently mean more spent on hardcopy advertising including newspapers as integrated campaigns further take over and spread the dollars more effectively.

The future is not about doom and gloom for TV.  It is about smarter and more effective communication budget coordination, planning for greater effect and better value for money spent.

Ken Mitchell is the CEO of Australian Marketing & Research Services and can be contacted on 62576677w, or ken@AMRSonline.com.au