Breaking Down TV Ad Spend vs. Digital Ad Spend

If video killed the radio star, could digital kill off TV for good? Perhaps. Sixty-one percent of young adults in the United States say the primary way they watch TV is through streaming services like Netflix, Hulu, and HBO Go. Just five percent of millennials mainly watch TV through a digital antenna. This suggests a major shift in viewing habits over the last decade or so.

For the very first time in history, the money spent on digital ads in the United States will surpass traditional ad spend, according to a study from eMarketer. With this explosion of digital advertising, are TV ads headed for extinction?

Not quite. In a media landscape that is increasingly complicated and nuanced, it’s time to learn the main differences and advantages of TV and digital ad placement. Doing so will ensure your advertising dollars work for your business in the best way possible.

The Rise (and Rise) of Digital Advertising

Regardless of age, Americans are glued to their phones. Studies have shown that the average person spends more than four hours a day on their mobile devices, with at least half of that time spent on Instagram, Facebook, Twitter, Snapchat and YouTube.

As consumer behavior has shifted, so have marketing dollars. To meet people where they are consuming content, growing companies are spending on digital advertising.

This trend is only becoming more and more important. Just take a look at the numbers - By the end of 2019, eMarketer predicts companies will have spent almost $130 billion on digital ads, which is $20 billion more than the predicted spend for traditional ad formats. The vast majority of all digital spending will be exclusively for mobile ads.

Digital advertising is much more affordable, with a very low buy-in. Businesses have plenty of  flexibility with respect to budget, target audience, business objectives and timeline. Customization and personalization options are typically guaranteed for digital ad offerings.

The advantages of digital ads:

• Digital ads allow you to reach a very specific, targeted audience
• Digital ads are cost-effective
• Digital ads offer unparalleled data and insights

TV Ads 101:

The days of watching live cable TV together as a family may not be a shared traditional anymore, but the majority of Americans still love to view their favorite shows. Where and how they watch TV has shifted, with many opting to watch or stream videos on other devices.

Despite the ever-increasing importance of digital advertising, most marketers still view TV as the advertising medium that is most able to “build an emotional connection with a brand” according to a study produced by Adobe. The unique ability a TV ad has to present an immersive, audiovisual experience for the audience sets it apart and keeps it relevant in the modern age.

However, the benefits of TV advertising come at a price - Businesses can expect to pay a minimum of $5 per 1,000 viewers for local television stations. This means you will pay at least $5,000 per million viewers of a local airing with no actionable engagement. According to Adage, a 30 second spot on a national station will average around $115,000. These steep costs are typically major roadblocks for small businesses.

Digital marketing is going through a golden age, so it’s a good idea to strike while the iron’s hot. Partnering with a marketing agency that uses different types of ad platforms, gives you the best chance of success of reaching customers at every single stage of the sales cycle using search, video and display ads.Not sure where to get started with your advertising spend? At WDC, we offer a range of services, including digital marketing strategies specifically to your business. Contact Bill at [email protected] or visit www.wilmingtondesignco.com.