TV’s influence remains despite declines, Deloitte reports

Television remains the preferred channel for Australians to entertain themselves, and despite declines in its influence, it remains a powerful platform for advertisers, the 2017 Deloitte Media Consumer Survey has found.

Deloitte’s technology, media and telecommunications leader Kimberly Chang said TV remains a powerful platform

And while social media is the fastest-growing influence on purchase decisions, the report noted that Millennials and Gen Xers are pulling back slightly on their use of social media, with 31% of respondents saying they were temporarily or permanently deactivating accounts, while almost two-thirds are taking their conversations out of the public eye and using more private messaging apps to speak with friends.

The report, complied by Deloitte’s new technology, media and telecommunications leader Kimberly Chang, also reconfirmed the Australian public’s unwillingness to pay for online news with just 10% saying they saw value in it, while 77% believed they had been exposed to fake news.

Source: Deloitte

“Along with fake news, the ‘narrowcast’ of social media and its propensity to be an echo chamber, rather than provide a plurality of views and opinions, has taken a toll,” the report said.

“This year, we are using social media less for news, a behaviour being driven by the Millennials – who were also first to embrace it – and Xers.”

However, it noted that social media and news would remain closely aligned, even as the shift grew.

“The futures of news and social media remain very much entwined. More than one-third of survey respondents (35%) expect that in the next three to five years, they will get the most value from using social media to keep up to date on breaking news, with little variation across generations,” it said.

Source: Deloitte

While TV revenues remained challenged by the rise of digital, the report had good news for legacy broadcasters as their willingness to adopt digital channels for distribution of both live and catch-up TV allowed them to keep pace with emerging rivals for people’s time – but a new trend was emerging in the way sports were being watched.

“When the combination of live (linear broadcast schedule) programming and catch-up services (offered by each of the Australian FTA broadcasters) are considered together, the ‘traditional’ players still dominate our TV watching time, despite the rise of streaming,” it said.

“However, a change in the viewing of those genres critical to broadcast audiences, namely sports and news, which also differentiate FTA from OTT and streamed content providers, is cause for consideration for commercial broadcasters. Comparing all genres, sports and news are still the ones we most often watch live (at the time of broadcast), but this has declined markedly over the last two years. This year, less than half (45%) of respondents indicated they most often watch the news at the time of broadcast (compared to 63% in 2015) and less than a third (29%) of respondents most often watch sport at the time of broadcast (compared to 38% in 2015).”

The challenge to the future of subscription TV pioneer Foxtel was also starkly demonstrated in the survey.

“Within three years of launching in the Australian market, SVOD services such as Netflix, Stan, and Foxtel Play have caught up with Pay TV subscriptions. Thirty-two percent of respondents now have a SVOD subscription in their household – up from 22% last year – surpassing Pay TV subscription ownership for the first time (31%),” the survey reported.

“Pay TV subscription ownership has remained stable since last year, and has remained between 31-33% since 2014.”

Under the headline of ‘Reports of my death have been greatly exaggerated’, the report underlined the continued power of TV as an advertising platform, although it was diminishing.

“After word of mouth, and its digital equivalent, (online reviews from someone in our circle), TV advertisements continue to have the greatest impact on purchasing decisions, with 53% of respondents rating them as having a high or medium influence,” it said.

“The influence of TV has fallen this year, from 55% in 2016, and has been declining since this report series started in 2013, with a 10% drop over that time.”

It said the fastest-growing influence on respondents’ purchasing decisions is social media advertising, up to 36% this year, having increased by 14% CAGR since 2013.

“This brings the influence of social media platforms broadly in line with traditional advertising such as newspapers (38%), radio (37%), billboards and posters (36%), and magazine ads (35%). The power of social media is most pronounced among Millennials, identified as influential for 52% of Trailing and 53% of Leading Millennials. The highest growth in social media’s influence on purchase decisions since 2013 has been among Boomers (22% CAGR).”

It noted that among Millennials social media advertising was almost on a par with TV in terms of its influence with endorsements from online personalities and celebrities having a big impact on purchasing decisions.

“These seemingly more personal or ‘intimate’ ways of connecting with consumers, along with social media ads, text messaging, and mobile app ads, have increased their influence on purchasing decisions, and yet there is still no better way to connect with scale audiences,” it said.

“TV advertising remains critical to discovery, building awareness, and to long-term brand associations – and should not be written off just yet.”

Source: Deloitte

However, the rising power of digital platforms was offset by the desire of consumers to avoid ads, with the majority of Australians seeking to avoid ads through skipping, blocking or paying for ad-free environments.

“Seventy-seven percent of respondents indicate that given the choice, they will skip an ad playing before a video,” the report said.

“Additionally, half (50%) of Australian respondents are likely to abandon a short video completely if they cannot skip the pre-roll ad, and when thinking about mobile advertising, 48% pay more attention to an ad they can skip than an ad they cannot.”


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