Is this the beginning of the end for TV?

TV is in turmoil if the results are anything to go by, but it’s spending too much time battling digital, writes Sabri Suby, founder of digital agency King Kong.

If you invest in TV in Australia in any way, shape or form, be it content production, advertising spend, or as an employee of one of the networks, this has to be a troubling time to some extent. For those in competition with TV, this is not something to gloat about, but hard questions have to be asked and reality has to be admitted to. That is, TV in general is in trouble, and there doesn’t seem to be an action plan.

Let’s be frank, Network 10 is having to be bailed out and rescued from drowning by US giant CBS, while the Seven Network has just reported extremely weak figures off the back of what could only be called a period of turmoil for its reputation. Meanwhile, streaming media is diluting the effect TV advertising once had.

While that should be great for flaming the fire of competition, the weakened networks aren’t in a position to compete at the moment. In the meantime, digital media is providing a bigger challenge than ever before for advertiser spend.

According to studies from Zenith and eMarketer, digital ad spend is set to overtake TV for the first time in 2017. The figures showed that global digital ad spend would hit US$205 billion while TV would take in US$192 billion. That digital figure accounts for over 36% of all ad spend.

The story is the same in Australia. eMarketer predicts that digital ad spend will hit $6.18 billion or 54% of all ad spend. TV, by comparison, will sit on just $3.3 billion. The writing has been on the wall for some time now, but reality has now struck and unfortunately some of the TV networks who should be responding with the most vigour are not in a position to do so, and don’t look like they will be in the near future either.

Digital is the way forward. It provides a multitude of execution options across almost every conceivable target audience, while it also provides significantly more granular ROI than any other medium. You can also market in real-time and take into account cold, warm and hot traffic.

The TV industry will point to the fact that digital growth is in decline. And it is, there is no denying that. But that will always be the case once you have taken top spot. You can increase your lead, of course, but the rate of increase will gradually begin to lessen as the gap becomes wider and wider. 20% YOY growth becomes 17% growth and this year is expected to be 13%. That’s not as important as the fact that the gap will continue to widen now, as the 13% growth is still greater than any of the other growth figures of competing sectors.

Declining growth is still growth

But here is where I may cross over to the opponent’s side just a little bit. After all, it’s good to have strong competition. One of the channels I built my business with, was – believe it or not – radio. It’s as traditional a medium as you can possibly get.

I used radio spots to reach a much older demographic that had built their businesses using traditional media, and this was a medium where they were. I used the medium to move these prospects online and then kept the relationship going there.

Radio and out-of-home are doing what vinyl began to do many years ago. They are reinventing themselves and sticking to a core set of values which is serving them well. They understand inherently what they can and can’t do and can communicate this to the industry well.

TV on the other hand spent much of last year battling the naysayers by pointing out how its ROI is comparable to, or better than, digital. Simply search ‘TV better value than digital’ and you will find a number of them, not least this one from the ABC in America.

A well-crafted argument, but I can’t help but think that time would be better spent working on the business directly. After all, many of these TV networks have large digital components that are very successful. So why fight against yourself?

This is not the death of TV. TV absolutely has its place. But this is the death of TV as king – that will never happen again. Digital has overhauled TV, and the gap is insurmountable.

So here is a tip to the TV industry: forget about competing with digital. Do what you do well and get on with it. Digital is doing just that.

Sabri Suby is the founder and head of growth at King Kong, a digital agency.


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