Don’t discount the GOAT: Why the changing TV landscape demands a new approach to advertising strategy
Adrian Cosstick, head of strategy at Half Dome, explores the decline of linear TV and what this means for the future of advertising effectiveness.
I’m a diehard sports fan so naturally one of my favorite pub conversations is ranking GOAT (greatest of all time) players.
The case for a GOAT must consider factors like longevity in the game, peak performances under pressure, and whether the present has it easier than the past. It’s an impossible exercise to gain a collective agreement on. In advertising this discussion is easy. Linear TV is the GOAT (with an honorable mention to search). Yet, its slow decline should prompt us to pause and reflect on what made it great and what its drop-off means for the future of advertising effectiveness.
Linear TV: the all-round high performer
Linear TV is the ultimate high-performance athlete of the advertising world. A great TV ad makes a brand part of popular culture and can change how people feel about a business overnight. It can grow and protect the long-term margins of a company and deliver masses of short-term sales. Linear TV is also a great team player, often lifting the performance of other channels around it.
Like all GOATs, Linear TV has something special about it that may never be replicated. What makes linear TV unique is the volume of reach it can deliver at speed. It operates via a signal that millions of people gather around simultaneously. In an instant, an audio visual ad can impact many consumers in-market for products or services. Its ability to make an emotional connection also has a lingering effect on consumers who are not in-market, making them more likely to purchase a brand they’ve seen on TV in the future.
The slow decline of the GOAT
The decline of linear TV has been gradual and somewhat exaggerated. While it once reached over 90% of the population, it can still reach 78% in a good week and the top 10 programs currently attract over a million people most nights. According to Nielsen, people aged 50+ continue to watch more than 13 hours of linear TV per week – but that drops to 78% of 16-24-year-olds who watch just 4.9 hours per week.
It’s not all doom and gloom though. In fact, the TV screen itself has never been a more popular form of home entertainment. Australians are just less congregated around one signal, preferring to watch video on demand (VOD) services across subscription (SVOD) and ad-funded broadcast (BVOD) models.
The rise of SVOD and the challenge for advertisers
The problem for mass market advertisers is the growing number of Australians using subscription video on demand (SVOD) platforms. VOD ads are just as effective as linear TV ads, with the added targeting on VOD making it even more effective for advertisers with specific target audiences.
However, subscribers to SVOD platforms like Netflix have been slow to adopt the ad model option, and we await the large-scale release of commercial inventory on Amazon Prime, Apple TV, and Disney+ in Australia. More than 80% of people aged 16-49 consume SVOD for at least eight hours per week, compared to BVOD’s reach of 37% for around 3.5 hours per week. SVOD represents a significant amount of viewing time that advertisers can’t easily access to supplement linear TV viewership.
The attention challenge
Research by Ebiquity and Lumen The Challenge of Attention] suggests that a 30-second TV ad captures 1.3 times the attention of a YouTube ad and 4.5 times that of a Facebook in-feed ad. Linear TV also offers competitive cost per thousand impressions, which has prompted many brands to maintain historical investment levels. This has created a supply and demand problem on linear TV with inflation on the channel expected to grow another 5% in 2024, following increases of 7.3% in 2023 and 12.3% in 2022.
Strategies for the future
A GOAT can never be truly replaced but there are some strategies which may help to offset any declines being felt by advertisers:
1. Rethink reach and frequency: The Ebiquity and Lumen research suggests the average dwell time on a 30 second TV ad is 13.8 seconds compared to 4.9 seconds on YouTube, 1.6 seconds on Facebook and one second on desktop display ads. Channels with low ad attention may need significantly more impressions to offset linear TV inflation or its effectiveness. This tends to be overlooked when reach and frequency is used as the determinant of channel investment.
2. Design channel agnostic brand platforms: Nielsen Catalina data Key to Effectiveness suggests that creative accounts for up to 47% of an ad’s effectiveness. This means that more channels need to bear the responsibility for long-term emotive brand building. Too often I see emotional brand platforms that are designed to service a TVC script at the expense of multi-channel brand building. Ad agencies need to start treating each channel as a chapter in a brand’s story, not distribution points for iterations of one film script or idea.
3. Retrain algorithms to increase penetration: The pressure of having to shift much higher volumes of impressions to match linear TV volume can reset buying and bidding strategies and help reach new audiences. This is especially true on digital platforms – deploying the same weekly weights, cost thresholds, and campaign tactics can inadvertently lead to algorithms ignoring valuable customers week-in-week-out.
4. Monitor impression velocity: Linear TV’s ability to instantly reach large audiences is crucial and is the hardest factor to replicate. Digital and programmatic media can deliver mass volumes over time, but achieving instantaneous scale is challenging. Participating in social media trends or sponsoring event viewing (or listening) is about as close as brands can get to the drawcard that has been prime time viewing on linear TV. More ‘roadblock’ type products also need to be made available on digital platforms.
This is not a eulogy for the GOAT of advertising. More SVOD inventory will certainly help, if not fully address, the effectiveness challenge posed by linear TV’s declining viewership. In the meantime, linear TV should remain a core component of the advertising solutions proposed to clients.
However, like any team that has a GOAT in decline, we need to prepare for the future to ensure long-term success.
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Well written Adrian.
One small question … were you basing that on the rating of the program? The rating is the average minute audience during the program – the traditional measurement. Or was your data based on the reach, i.e. that data could be based on as little as 15 seconds of the program counting as equal to watching the whole program.
Such data should also not be compared to other media which rely on very low durations across a whole month to report the reach.
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Great question.
The thinking is based on the average minute audience. Linear TV has a unique ability to instantaneously impact mass volumes of people at once. Whereas most other channels (i.e. digital) offer more of a drip feed of reach and frequency.
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