In an Age of Streaming Services, Is TV Advertising Worth the Cost?

The most expensive television ad to date was done by Coco Chanel. Featuring actress Nichole Kidman and costing the company $33 million, many wonder, in the age of targeted content marketing, is such a costly television ad worth it? In a time where ad-less streaming services such as Netflix and Hulu have more viewers than live television, probably not.

According to a survey done by consulting firm, Deloitte, 56 percent of survey participants in Utah, and around the country, prefer to stream movies, 53 percent stream TV shows on a monthly basis and 45 percent of people surveyed prefer to watch TV programs live. This means TV advertising content is reaching less than half of the audience it had in years prior, due to the advent of streaming services.

The market is also beginning to mirror this change in preference. According to an article on Bloomberg.com, “Television ad revenue is estimated to drop 3.5 percent to $63.3 billion this year, while digital ad revenue will grow 17 percent to $57.7 billion.” Magna Global, the same firm behind the study, also estimates that by the year 2017, the majority of money spent on marketing and advertising will be on digital content.

This change has been coming to Utah and the rest of America for years. According to a survey done by Statista.com, in 2013, 61 percent of those surveyed indicated they trust or somewhat trust television ad content. In that same year, participants indicated more trust in online consumer opinions, branded websites and email ads they signed up for. 

While in terms of trust, television is ahead of online banners, search engine ad results and ads on social media, the last three options not only cost less, but they can be used to specifically target consumers in Utah, rather than blindly casting a net over the entire live television audience.

Media companies like Viacom and NBC Universal are desperately trying to keep up with the Internet’s ability to specifically target consumers in a cheap and efficient manner. Additionally, Bloomberg.com reports that by using information from cable boxes and credit cards, these companies plan on marketing to specific audiences, much like advertisements on the Internet. 

Even if these national companies do figure out a way to specifically reach a small population in Utah, they still have to make up for declining viewership. Plus, content marketing is changing so quickly that by the time media companies manage to directly target consumers, chances are, online advertisers will have already moved in another direction. Only time will tell, but most believe that the age of television advertising is already over.

Ian Carry writes for Fusion 360, an SEO and content marketing agency. He writes for many other clients as well. Follow on Twitter