Theerosion of network TV. Up to 20 percent of your audience isn't watching TV... and the number's rising.
I got to the office Wednesday around 7 am, fired up my machine, and, as usual, began reading my daily dose of newsletters. A small, unassuming headline halfway down the page caught my eye: "IMS Study Shows GRP Changes." Given the heightened interest in online reach/frequency planning over the past couple quarters, I figured I might learn something about yet another development. I definitely learned of another development, but it had nothing to do with online reach and frequency. The article was specific to the significant erosion of network television from 1996 to 2001.
The goal of the IMS research was to identify changes in TV audience accumulation patterns over the period in question to feed models used by media planners. The results have huge implications across the media industry. In a period of just five years, network TV reach has eroded as much as 24 percent against certain audience segments and dayparts. Why this has not received more attention I have no idea, particularly given the goings-on during this year's upfront. Here's an example of reach erosion specific to the women ages 25-54 target segment, by daypart:
Significant numbers, to say the least. IMS's research shows the inverse occurring in the cable marketplace, which grew in reach over the same period. IMS appears to believe the two have a causal relationship, that is, network TV lost share to cable TV. I don't buy it. It's not that simple.
The media landscape during the period in question (1996-2001) arguably became as fragmented as it had ever been. According to the research, the number of cable networks increased from 35 in 1996 to 52 in 2001. Did anyone stop to think about what else was going on? There was this thing called the Internet that started competing for consumer attention. Did it contribute to fragmentation and erosion of TV reach? There are 10,000-plus ad-supported Web sites out there.
We view this as a major eye-opener for some of our clients. My agency handles a fair amount of consumer packaged goods (CPG) business. CPG advertisers tend to rely heavily on tonnage strategies in broadcast media, specifically TV. Buy as much as you can, as cheaply as you can. Problem is, now you have to buy even more. Based on the IMS's erosion reports, it's not as efficient.
We believe this research dovetails nicely with some recent releases from none other than IMS. Brand case studies from American Airlines, Kraft, and Subaru conducted by Nielsen and IMS that detail media mix modeling show how the Internet can effectively reach light TV viewers in the target demographic.
I have no hard data to support this, but I believe the reduction in reach seen in network TV is partly driven by increased penetration and usage of the Internet. Penetration has grown to roughly 70 percent of the U.S. and now accounts for somewhere in the neighborhood of 11-15 percent of media consumption for people over 18 (depending on your source). Eyeballs no longer watching TV are often captured online. As the above-mentioned case studies indicate, a reallocation of existing dollars can help address a vanishing TV audience. This could -- and should -- be a boon for you and me.
Agencies are faced with tough questions: Remain risk-averse and recommend more TV (or a revised mix that includes more cable) to address these findings? Or do the right thing and objectively assess our target's media consumption? The former allows agencies to stay in their comfort zone and efficiently make money with established procedures and practices, although it opens them up for potential disaster.
How about a media audit like the one just launched by Procter & Gamble? How about missing up to 20 percent of your target audience because they're light TV viewers? The latter scenario puts agencies without interactive media expertise in a precarious position. Invariably, they'll find their target audiences online. They will need to go there to reach them.
And that, my friends, is the boon for you and me.
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