All power to the algorithm? Think again: the most efficient booster is still TV!

The digital transformation is creating one new exciting communication channel after another. But only those who find ways of intelligently combining old and new media in advertising planning will really reach out to the consumers.  Media expert Dr Andrea Malgara explains why we shouldn’t write off the power of good, old television.

Digitalisation. Since the invention of the printing press, there hasn’t been a big bang in the world of media like it. Whole galaxies of new content sprung up in what seemed like moments. From moving images to print, everything can be reproduced in digital format, and anyone can become a media producer with the click of a mouse. Up to now, the advertising industry has dealt with this tsunami of content in a rather old-fashioned way. Even today, project planners are still breaking down media into separate areas, with planner A responsible for TV purchasing, planner B for print and now a whole new department C added on for anything digital – which is where a huge proportion of the media budget now ends up. But even with the help of those supposedly infallible algorithms, advertising is still less effective than it should be, and having dismissed analogue media as second-rate, advertisers are now finding themselves punished with decreasing coverage. Media planning in a digital age only works if you join up networks and media, and only when we find an intelligent way to connect old and new media will we be able to fulfil our promises of efficiency to customers.

The war for attention has begun

Media fragmentation is one of the absolute super-trends of the past decade. Germany’s number of .de domains has almost doubled in the last five years, while the number of available apps has increased by a factor of 5,000. There are 70% more TV channels than there were ten years ago, and even the number of new print publications far outweighs the number of magazines that have gone out of print. But that doesn’t mean individuals are actually consuming more media. Just seven channels account for 80% of all TV viewing, and consumers, on average, use just five different apps. The biggest difference since digitalisation though is that these few channels, online journals etc., are tailored to the individual user. Target groups are getting smaller and smaller and it is becoming harder and harder to reach them. Net coverage for a benchmark campaign has sunk by 10% over the past ten years, while costs have risen by 18%.

TV – the last remaining way to reach the masses

When coverage decreases and budgets stagnate, media efficiency increasingly gains in importance. For Mediaplus, the answer has been to put traditional television at the heart of networked media planning. TV is one of the last strongholds when it comes to major coverage, and major coverage is totally dependent on brands; without the recognition value and appeal associated with a TV commercial, even data-based internet advertising fails to take effect. Just as in the past, TV still makes the biggest absolute contribution to a campaign’s return on investment because it offers a high-quality environment that has the potential to reach huge audiences despite media fragmentation. Germans still watch over 2.5 hours of TV a day, and according to the German Association of Private Broadcasting and Telemedia, TV is the most important source of news, even for people who spend a lot of time online. In the age of fake news, the TV advertising environment is an indispensable vehicle for disseminating brand image.

The obsession with digital is bad for brands

Of course, putting TV at the centre of a media strategy doesn’t mean you are rejecting the advantages of digital. The digital world offers plenty of upsides, from data-driven targeting to the automated production and showing of advertising. But many marketeers are so in awe of the possibilities of this brave new world that they fail to see online marketing’s drawbacks. Managers thoughtlessly reallocate their media budget from analogue to digital, especially to Facebook and Google, which together absorb no less than 80% of online advertising spending. The “winner takes all” principle, a direct consequence of media fragmentation, continues to be a massive trend in digitalisation. A few Silicon Valley giants allocate their budgets with a view to monopolising the industry, and advertisers are happy to play along. Digital businesses promise that every click can be counted online so “what you see is what you get”, unlike the analogue world where it’s much more difficult to measure ratings. The analysis of endless consumer data is meant to counteract media fragmentation by ensuring that users are fed only tailored advertising.

But although the digital world promises transparency, so far things are anything but transparent. Just look at ad fraud. 11% of all online views and 23% of all video views are generated by bots, which can be responsible for 5 to 60% of all the views registered for a single campaign. Digitalisation’s second promise – that advertising can be targeted to specific audiences – has also so far failed to halt the decrease in advertising efficiency. Constant digital input eventually leads to consumer fatigue, and it becomes more and more difficult to establish brands. 60 to 80% of innovations flop, 70% of new online shoppers only buy once and 37% of regular customers abandon a brand after just one year. It’s true that social networks and Google generate huge volumes of traffic, but the increase in traffic is inversely proportionate to the attention given to it by consumers. The average user attention span for a Facebook newsfeed post is 1.7 seconds, and the half-life of a post is just 90 minutes. New content is permanently being added to the timelines, meaning that the impact of individual advertising messages drastically decreases.

TV is boosting online efficiency

If media planning isn’t networked, then advertising messages vanish online like meteorites into a black hole. But if you use TV commercials to boost them, things look very different. TV campaigns increase a brand’s SEO and SEA online ratings by 20%. And this is an upward trend, thanks to the fact that one in five people in the 14-29 age group already accesses TV and the internet simultaneously every day, jumping from the TV screen to their smartphone display and back again every 40 seconds. In this context, fragmented attention can work to the advantage of media planners. In the case of networked media planning, a high proportion of parallel users leads to a lower CPV (cost per visit) of -37% and higher VPGRP (visits per gross rating point) of +32%, as shown by a study we carried out in partnership with SevenOneMedia.

But I can only create synergies between media if I don’t simply double the analogue content online. Consumers only react to a brand offer if this is referenced again in a relevant way on their second screen. That’s why at Mediaplus we base our strategy on around 45 million targeting profiles in order to be able to plan the probable use of different media. The NE.R.OÓ database stores the profiles of 80% of German online users. One of the criteria for targeting them is the probability that they will access TV. A display advertisement is then played out to those users where this probability is very high, thus generating TV and online contacts. At the same time, to increase net coverage, we then also show an online moving image campaign to those users whose profiles indicate that they are very unlikely to see the TV campaign.

Digital USPs hit the campaign bullseye

We can already optimise a TV campaign to a high degree using analogue media. As digitalisation has gained ground, TV campaigns have lost around 10% net coverage. However, if I invest 25% of the TV budget in niche channels, I get greater coverage than before because I can specifically target special interest groups. Online, the potential for individualisation is, of course, much higher. If an algorithm analyses the online success of a TV commercial over a week, we can generate up to 70% more TV-induced online sales in e-commerce by playing out the commercial on other channels and in other time slots. We’ve also found out that online advertising for a brand is improved by up to 30% when it is shown more often in the half-hour following the TV ad. And if I then tailor an online video to individual users with dynamic creation, the digital campaign can be 150% more effective! Google, Facebook and the like have made some weighty promises – and as a media agency, we can now actually keep them. Yes, online attention span for advertising messages may be minimal, and user attention may indeed switch to another screen as soon as a commercial break comes on. But we can turn the fragmentation problem to our advantage, generating efficiency potential like never before, as long as we use the latest technologies to join up media intelligently in the planning stages.

Artificial intelligence and automated advertising will give the advertising industry a huge boost in terms of effectiveness. But do we really want to let the algorithms take over? If we do, we’re just creating more opportunities for problems like ad fraud and fake news. Do we really want to keep blindly throwing money at Google and Facebook, making ourselves dependent on big businesses in the US? Our statistics prove that media planning in a fragmented media landscape, where every user has access to multiple screens, can only work well if it crosses media boundaries. Neither the super-fragmented internet, nor analogue media will be capable of bringing about a revolution in advertising efficiency in the future – at least not if they continue to be treated as two entirely different entities. But if we use synergies from both the old world and the new, we’ll soon find that the key to advertising won’t be how relentless your advertising strategy is, but how relevant.

Illustration: Nick Diggory

Dr Andrea Malgara

Managing Partner of the Mediaplus Group

Dr Andrea Malgara has worked at the holding company of the Mediaplus Group since 2011, a role in which he is responsible for internationalisation, business development and purchasing. Originally from Italy, he is well-known for his speeches, presentations and lectures on a range of fascinating topics, but mainly focuses on the challenges of digitalisation, digital television, the future of advertising, brand creation processes, legislative frameworks and the future of media. His popular appearances at the Catholic University of Milan, the Bavarian Academy of Advertising in Munich and the EGTA University in Brussels, the German Advertising Congress, the IFA, the EU Commission and the EU Parliament are always well-attended. Even in the digital age, Malgara continues to champion humans as a key factor to success: “We don’t believe that there is one single, all-encompassing algorithm that can optimise everything from second-hand clothes to mobile phones, insurances, oil, sweets and cars. If you believe that, you might as well believe in the good fairy who will make the media world a better place.”

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