Television is an increasingly wobbly target for ad spending and will likely soon begin hemorrhaging dollars to interactive and other channels. That’s according to a Forrester poll of 133 advertisers who control more than $20 billion in advertising.
The study, undertaken in conjunction with the Association of National Advertisers (ANA) and presented today at the ANA’s TV Ad Forum in New York, found 78 percent of these marketers feel the potency of their television advertising has declined in the last two years.
Seventy percent of those surveyed believe digital video recorders (DVR) and video-on-demand (VOD) will “reduce or destroy” the effectiveness of :30 spots. And once DVR penetration grows to above 30 million households, 24 percent said they intend to cut their TV ad budgets by at least a quarter and reallocate that money to online advertising, product placement and other channels.
The Internet fared particularly well in major advertisers’ future plans. Eighty percent said they’ll invest more in Web advertising, and 68 percent singled out search marketing as a source of future spending. Smaller percentages said they’d pursue program sponsorships, product placement and online video ads.
Just under half of advertisers in the study said they had experimented with ads on DVRs (49 percent) or VOD environments (44 percent).
Forrester analyst Josh Bernoff, who authored the study, noted the argument put forth by many in television that increased spending on the Web will come out of marketers’ direct marketing budgets, leaving the traditional ad mix relatively unaffected. He said the results of the ANA study do not bear that out.
“I think advertisers are telling us, ‘No, that’s not how we think of it,'” said Bernoff. “They have a media mix, and it includes TV… and it includes Internet. They’re saying they’re going to take money out of television and put it into [online] advertising. They’re not going to take money out of direct marketing and put it into advertising.”
Bernoff said that despite the weakness of the upfront last year, television recorded an overall increase in year-over-year spending. Forrester’s expectation is that TV budgets will experience their first full-year decline in 2007, he said.
The numbers released today were partial results from a survey of 133 advertisers. Among those surveyed were Charles Schwab, Colgate, Dunkin’ Donuts, Johnson & Johnson, Mattel, Pfizer, and Verizon.