Death Of TV Commercial

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Tv Ads On The Brink Of Extinction by BlueBrothers(m): 11:38am On Sep 09
It is still news that Facebook made $9.16 billion advertising revenue in the second quarter of the year. Last year was also interesting for global advertising.
Zenith, an international data and analysis agency, puts the revenue of Google and Facebook at $79.4 billion and $26.9 billion, surpassing the advertising revenue growth for television, radio and print media.
Magna Intelligence, another research and analysis agency, forecasts that digital ad sales will eclipse TV ad sales this year, and will consequently gain a market share of 50 per cent by 2021.
How true can this be?
Advertisers’ perspective
TV used to be the leader in generating ad sales, but all of these started changing with digital marketing and digitilisation.. Digital marketing brought more scientific opportunities to advertisers – in that they can measure end-users impact statistically. Metrics, such as clicks, views, engagements, total web visits, average duration per visits, trends, followership, and impressions are customer-centric information for the advertisers and they are needful for strategic planning. Besides the end-user statistics, Facebook gives the advertiser the opportunity to narrowcast, while traditional TV broadcasts. In the age of limited resources, advertisers want to select the gender, age bracket, demo-graphics and psychogra-phics of the target audience. This is made possible only with digital. And to make things exciting, results of ads are monitored real-time, in graphs, maps, and charts!
Consumers’ perspective
People spend more time on smart phones than on TV. The most recent “Total Audience Report” of Nielsen, a research company, shows: “Traditional TV viewing by 18-24-year-olds in US dropped by almost 12 hours weekly, or by roughly one hour and 40 minutes per day”.
Same report also highlighted the fact that Q4 traditional TV viewing by 18-24-year-olds has down-sloped to 41.3 per cent since 2012, and this implies that 40 per cent of the age bracket would have edged away to mobile completely by 2022. This analysis reinforces Magna’s forecast that Digital ad sales will take 50 per cent of the market by 2021. The Mobile Ecosystem Forum (MEF)’s report – Nigeria’s Mobile Consumers last year – revealed that consumers invest in data to get access to “downloading apps (64 per cent) and watching video (52 per cent)”. Thus, most of those who used to watch TV are investing data to view online video contents and adverts are also migrating to the online platforms.
Market outlook
The biggest threat to TV is not the growth of digital media, but the change in the business model of digital media.. Now, video is the new viral and digital marketing is mostly about videos! Google’s Youtube, Twitter’s Periscope, Facebook, Instagram and Snapchat have all taken over the video niche. Facebook announced early in the year that adverts will be slotted within popular videos and creators of such videos can have 55 per cent of the ad sales.
Also, digital media provides ad platforms at cost effective rates compared to TV; advertisers can pay per click or pay per impression. The most innovative proposition of digital ads is the opportunity for consumers to buy online by clicking the ads.
Conclusion
The obvious argument against this projection is that Television is still relevant in Nigeria and that its TV stations earned N357.9 billion ad revenue between 2006 and last year (Mediafacts Nigeria). That is a paltry $941.8 million in 10 years by a whole sector of an economy! A TV ad sale of $941.8 million for 10 years is an average of $94.18 million yearly. Facebook’s average revenue per user as of fourth quarter of last year was $4.83, according to Statistica, a leading online statistics company.
Sixteen million Nigerian users of Facebook amount to an estimated ad revenue of $77.28 million. This means the ratio of Facebook’s estimated revenue in the country to Nigeria’s TV ad revenue is about 4:5. This gives a picture of what would happen to the ad industry locally and globally in the next five years – the dearth of ads on TV!
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