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The Death of TV Advertising

Christopher Dring
The Death of TV Advertising

There was a time when you couldn’t flick on Coronation Street without seeing Ant and Dec prance about on a Wii Fit Balance Board.

If a game was worth stocking, it had a TV ad. And there were hundreds of them, often found alongside big football matches orThe X Factor.

But that was then. Today games like Gears of War are launching without so much as a 30 second teaser on ITV.

During 2012, video game TV advertising dropped by 35 per cent year-on-year. So far in 2013 that’s fallen even further – down 44 per cent. And that’s despite the fact that the overall TV ad market has grown.

“The really big years of TV games ad spend are closely linked to hardware releases. In the years following the launch of Wii, 360, PS3, Kinect and Move we’ve seen large spikes in software and above the line advertising,” says Andrew Mallandaine, the UK sales director of Turner Media, the firm behind kids channel Cartoon Network.

“There have not been major hardware releases in recent years which has impacted expenditure. We’ve also seen a consolidation of spend behind key franchises such as FIFA, Assassin’s Creed and Call of Duty, which has been at the expense of smaller titles.

“This has been compounded by the economy. Marketers are reluctant to spend big when the retail environment is so unstable and disposable income is under pressure.”

But there’s more to it than economic uncertainties and the absence of a new consoles.

How people watch TV has changed due to the dramatic rise of on-demand TV, Sky+ and the internet.

This change in viewing habits is even more evident amongst gamers. According to Google, video games is the second most popular category on YouTube. Meanwhile, Twitch TV, an online video network that specialises in games, recorded 28m unique viewers in February.

“TV’s starting to be seen as a bit of a blunt object versus the fine targeting that’s available online,” says Twitch TV chief commercial officer Jonathan Simpson-Bint.

“This is exacerbated hugely by the fact that both video-on-demand and live video online are now exploding at phenomenal rates.

“Live internet video allows for interactivity between broadcaster and user, and among users, so the  dream of an ‘interactive’ and ‘shared’ TV experience is now finally happening, but it’s happening on phones and computers and not the TV set. This interactivity creates lots of engagement opportunities for advertisers, so it’s natural that they’d start to gravitate there.”

“Live internet video allows for interactivity between
broadcaster and user, and among users, so the
dream of an ‘interactive’ and ‘shared’ TV experience
is now finally happening, but it’s happening on
phones and computers and not the TV set.
This interactivity creates lots of engagement
opportunities for advertisers, so it’s natural
that they’d start to gravitate there.”

Jonathan Simpson-Bint – TV chief commercial officer, Twitch


But there are risks to this form of advertising, warns Mallandaine.

“It would be foolish to suggest that online video networks don’t have a place on a well-rounded and targeted media schedule but there are aspects of their usage that need to be taken into consideration,” he tells MCV.

“TV gives instant scale, the ability to regionally target, very defined launch dates, the ability to control the way the message is received and a defined target market. No other medium can create brand fame in the way     that TV can.

“You can also rest assured that the quality of the content within which your ad will be aired will be of a very high level.

“My biggest concern with online advertising is that of control. Who’s viewing the ad? What comments are being made below the content in an open forum? Will there be a backlash from parents of children watching inappropriate content? Anybody who wants control over

the way their brand is being perceived is always taking a risk in the online space.”

Despite the drop in spend, statistics from Nielsen suggests that the share TV has of all video game advertising has remained largely the same over the last five years.

Online advertising for games has grown from one per cent to ten per cent between 2008 and 2012, the firm says. But this has not been at the expense of TV, which has seen its share remain static at 53 per cent [54 per cent in 2012]. The biggest loser has been print media, which has seen its share fall from 27 per cent to 14 per cent.

But that’s not the full picture.

“This evidence suggests that TV advertising is still as important to video game advertisers as it was five years ago,” says Jonathan Chambers, audio visual manager at ad specialists Generation Media.

“But Nielsen’s reports give us a distorted picture. In terms of online spend, only display activity is captured, with elements such as SEO and preroll not accounted for. So it’s likely that TV’s influence would be reduced.”

Indeed, although television remains a crucial part of video game marketing campaigns, advertising budgets are now being stretched over a wider spectrum of channels.

“TV advertising is still one of the most effective – but no longer the only – means to create awareness by reaching lots of people repeatedly over a short space of time,” says the UK marketing director at Xbox, Harvey Eagle.

“There is still much to gain from airing a beautifully crafted TV commercial in a highly watched media environment. We used the England vs France Euro 2012 match to air the worldwide premiere of the Halo 4 live-action trailer. By doing so, we were able to reach a large part of our key audience at a time when they were highly engaged in viewing something they liked.

“TV advertising therefore has its role, but in a crowded marketplace such as in the lead up to Christmas, the best way to get cut-through is with an omni-channel approach, combining different elements of the marketing mix to drive success including but not limited to TV.”

Although core gamers may be increasingly watching their entertainment online, there are still audiences where the television set remains king.

For children and mass-market consumers, TV is still hugely effective. That’s why King has decided to book TV ads for its hit casual game, Candy Crush, or why Nintendo and Mind Candy are amongst this year’s biggest TV spenders.

“The average hours of kids TV viewing in the UK has stayed stable at around 2.5 hours for over a decade with no marked decline despite other media platforms becoming available or growing,” says Mallandaine.

“According to BARB, the majority of kids TV viewing is live, linear broadcast with only 10 per cent watching via playback, such as Sky+ or Tivo. And despite the growth of on-demand services like iPlayer, 4OD and ITV Player, an Ofcom report says that only 28 per cent of kids claim they’ve watched a programme or film on demand in the last year.

“So you can see why 95 per cent of the toy industry’s above-the-line media spend still uses TV for its high return-on-investment delivery. This figure has barely changed since our channels launched and it’s testament to the enduring power of TV to drive sales.”

"The majority of kids TV viewing is live, linear broadcast
with only 10 per cent watching via playback, such as Sky+
or Tivo. And despite the growth of on-demand services
like iPlayer, 4OD and ITV Player, an Ofcom report says
that only 28 per cent of kids claim they’ve watched a
programme or film on demand in the last year. So you
can see why 95 per cent of the toy industry’s
above-the-line media spend still uses TV for
its high return-on-investment delivery.

Andrew Mallandaine – UK sales director, Turner Media


Indeed, TV is not dead. It’s having to fight a little harder, be a little more creative (just look at the tie-up between SyFy and Trion Worlds on Defiance for example). But there are still audiences out there that TV can reach that YouTube does not.

But there is a new generation of consumers coming through that no longer see the TV as central to their entertainment. Young 20-somethings and teenagers that spend more time in front of their computer or tablets than sitting on the sofa in the living room.

“Kids simply don’t have the same relationship with TV that previous generations have had,” adds Simpson-Bint.

“They don’t watch as much and they watch on their own time. TV used to be a sort of omnipotent entertainment and information force and it’s not anymore. It’s gone from being the screen to a screen.

“YouTube has made everything available all of the time. You want to see that funny scene from The Office? It’s on YouTube. And you can watch it, share it, talk about it anywhere at anytime.

“We’ve got generations of people growing up now for whom the web is primarily a ‘now’ experience. Look at Facebook, Twitter and Reddit and so on. These are instant gratification machines. Little dopamine generators. My kids have almost no concept of waiting for content, be it music, TV, video, news and so on.

“Here’s an analogy for you. The decline of magazine sales has largely come down to a breakage of the business model. The magazine experience – that oasis-like private time with a cup of coffee and beloved read – is not broken. People still crave the experience that magazines offer. TV’s different. Whereas, tablets thinly replicate the magazine experience, web video completely enhances and revivifies the video experience. Magazines have struggled because the business model is broken not because anyone reimagined the experience. But with TV that’s exactly what’s happened.”

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Tags: video games , tv , advertising , analysis , feature , death , Market Data

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