The death knell for television advertising has long been sounded, but a new study says the noise is louder, forcing the medium to consider new strategies that make it more compelling and cost-effective.
The Kantar Media Reactions 2023 report, which gauges preferred advertising platforms, says while TV has never been rated highly among consumers, it has historically performed strongly among marketers.
But that’s changed; TV has fallen from third place in marketers’ preferred channels last year to 12th place in 2023. TV sponsorship has dropped from 12th place to 20th. Just 6% of marketers say they will increase TV spend in 2024.
The decline in interest is mirrored by the medium’s dismal local performance. The SABC claims to have lost over R600m in recent years due to a significant audience decline. DStv parent company MultiChoice has witnessed a decline in premium subscriptions as viewers take up cheaper packages.
In commentary on its 2023 results, e.tv parent company eMedia Holdings pointed out that difficult industry trading conditions resulted in a reduction of almost R500m in advertising revenue to the industry over its reporting period.
According to a research note from the Ornico agency, the main advantage of rival streaming services is that they offer ad-free or limited-advertising options, which allow people to watch their favourite content without being interrupted by commercials.
Statista says TV ad revenue in South Africa is expected to grow marginally from R7.2bn in 2018 to R7.9bn this year, which means advertisers should find new ways to reach their target audience.
Matthew Arnold, chief connections officer at VMLY&R, tells the FM: “TV is falling victim to the two rising trends in marketing today — the increased relevancy of more data-focused channels and the deeper engagement of in-person touch points. The rise of other channels with stronger targeting options is forcing marketers to adjust their marketing mix and give more consideration to the historical reliance on TV.”
Rob Smuts, CEO of RMS Media, says from a platform choice and return on investment perspective, brands need to give more thought to prioritising metrics like conversion volumes, conversion rates, click-through rates, cost per acquisition and return on adspend to gauge the success of campaigns on a specific platform.
In addition, the overall revenue uplift from all channels must be considered, delivering a successful synergistic omnichannel approach.
Gonca Bubani, global thought leadership director of media at Kantar, says: “Successful advertising today seamlessly integrates into consumers’ lives: in their scrolling, viewing or simply while they go about their day. This year, consumers have spoken up and said they strongly prefer advertising that they see out-of-home, like at sponsored events or the cinema.”
Local TV executives concede they are in for a fight. One at a leading channel says: “Websites, social media platforms and apps collect vast amounts of user data, enabling advertisers to target specific audiences with remarkable precision. This level of personalisation and targeting is not possible with traditional television advertising, which often broadcasts the same message to a broad audience, regardless of individual preferences or behaviours.”
Another tells the FM: “Of course we are concerned. Over the past decade, there has been a noticeable shift in how people consume media. Streaming services like Netflix, Amazon Prime, and Disney+ have seen explosive growth. These platforms often offer ad-free experiences, drawing our audiences away.”
Television also used to be a shared experience, where prime-time shows could guarantee advertisers a vast audience. Today, with hundreds of channels and scores of streaming options available, the media landscape is highly fragmented. This fragmentation means that advertisers can no longer count on television spots to reach the same mass audiences they once did.
Studies also show that younger generations, particularly millennials and Gen Z, tend to be sceptical of traditional advertising methods. They often place greater trust in peer reviews, user-generated content and influencer endorsements. This shift in trust dynamics means that traditional TV commercials, which are often perceived as more staged and less authentic, may not resonate as effectively with these younger demographics.
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