Marketers to spend 3.5% less on TV in 2016: ACA study

The portion of advertising budgets dedicated to TV is expected to fall 3.5 per cent in 2016, as Canadian marketing companies plan to allocate more of their budgets to advertising on digital platforms, according to a new study released Thursday by the Association of Canadian Advertisers (ACA) in collaboration with Nielsen Co. The study, which asked respondents about their marketing budgets for 2015 and 2016, found that the portion of budgets allocated to digital display advertising rose 0.4 per cent, while digital video rose 2.1 per cent in 2016. Overall allocation for search advertising increased 1.2 per cent and native advertising rose 1.5 per cent in 2016 budgets compared to those from a year earlier. It also noted that budget allocation for radio advertising fell 0.1 per cent. The online study was conducted over the last two months of 2015 and the beginning of 2016 among 66 anonymous ACA members, Imran Hirani, vice-president of media analytics at Nielsen said. Judy Davey, vice-president of media policy and marketing capabilities at the ACA, said it doesn’t have a margin of error. According to the ACA’s website, the organization is “exclusively dedicated to serving the interests of companies that market and advertise their products and services in Canada,” and membership is restricted to marketers. While the study said the share of TV advertising saw a decline in budgets for this year, it noted that in 2016 “TV still dominates in dollar share,” accounting for 45 per cent of the media budget of all marketers. It added that overall in 2016, 13 per cent was allocated towards digital display and 12 per cent on digital video, 11 per cent to search advertising and six per cent to native advertising. In phone and email interviews between Tuesday and Wednesday, Hirani said that while these numbers show there is a shift in budget allocation from TV to digital, it doesn’t mean that TV advertising is in trouble. “You can see there’s still a ton of viewership in TV, the TV audience is still dominating media consumption time,” Hirani said. “But, it does call out that there are a number of growing media. That … reinforces the idea that the media landscape is fragmenting.” He noted that while TV is down, the media industry overall is benefiting from stable or growing ad budgets for most advertisers. “For about a quarter of them the budget is growing more than 10 per cent,” Hirani added. The report said, in what ACA spokesman Matthew Chung said were statitics from 2015 budgets, that marketers with larger budgets, defined as $36.2 million on average, allocated 50 per cent to TV and 31 per cent to all digital advertising. Marketers with medium budgets, which had an average of $7 million, allocated 39 per cent to TV and 36 per cent to total digital advertising in 2015. Small marketers, with average budgets of $1.9 million, allocated 37 per cent to TV and 34 per cent to total digital advertising. Hirani said that marketers that previously had 50 per cent or more of their investment in TV were making bigger changes in terms of moving funding to digital than other marketers. He added that this was because they are trying to find new ways to reach their audience through different platforms. “To be clear, TV is still an important medium, it’s just that if as a marketer you’re trying to find ways to reach people… might find it beneficial to strategy to say ‘I’m willing to go down from an X frequency of exposure on TV to Y frequency of exposure on TV and try to find people in other mediums that I haven’t reached on TV,’” Hirani said. Hirani added that the study bolsters the assumption that advertising companies are choosing to allocate more money towards advertising on digital platforms. “There’s this buzz in the industry about how digital media formats are growing and they might be stealing share from other media formats,” Hirani said. “One thing that the study did is it started quantifying what the changes are that are expected…it actually provided first hand measurement what we heard as anecdote.” — With reporting by Shruti Shekar at sshekar@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Marketers to spend 3.5% less on TV in 2016: ACA study

News | March 16, 2016

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Marketers to spend 3.5% less on TV in 2016: ACA study

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