Tv media rates have seen huge fluctuations this year, with rates down a record 50% during covid as advertisers fled the market. However, just a few short months later TV is sold out for both November and December.
So what had happened? Why are advertisers flooding back into TV at record rates?
There are two main reasons…
1) EXCEPTIONAL TV ADVERTISING OPPORTUNITIES DURING COVID
TV advertising opportunities during covid were simply extraordinary. Brands who moved fast and capitalised on government and super stimulus combined with the crazy TV deals that were floating around, resulted in brands breaking all-time sales records.
The media ROI was breathtaking with some brands now reinvesting into bigger categories from automotive to banks.
2) TRADITIONAL OUTDOOR MEDIUMS SEVERELY IMPACTED
Traditional outdoor mediums such as outdoor, radio and cinema have been down as audiences numbers have been severely impacted by lockdown and restrictions.
Demand has reduced to up to 90% for some of these networks with advertisers simply pulling back and redirecting the revenue that would have gone to outdoor, radio, cinema to TV. TV audiences and eyeballs are well up due to work from home conditions and lockdown/restrictions keeping people at home.
So what does this mean for TV advertising in November and December
Agile advertisers who took advantage of covid deals, buying TV for less than 50 cents in the dollar and getting insane levels of bonus, had an effective media rate of 25 to 30% of pre covid conditions. It's not surprising that many aggressive TV advertisers like Harvey Norman were up a hundred and eighty-five percent profit during this period.
However, now the TV landscape couldn't look more different;
- Advertisers are now paying a premium for TV advertising
- December and November TV inventory is sold out, with these months traditionally the most expensive time of year anyway
- No bonus support is given by the networks to advertisers
- Government stimulus and support for business is reducing, with early super withdrawals also now a distant memory
- Demand is also expected to be lower as TV audiences decline with the easing of restrictions and more people get out and about
- As a result advertisers will effectively be paying three-four times the effective media rate compared to covid conditions
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Investing in Advertising is like investing in the Stockmarket
This media landscape makes for a very interesting scenario. Higher advertising prices, decreased market demand. Just as the stock market has been incredibly volatile, the media landscape is no different, you want to invest in value, you want to pull back when the market is high or risk a poor media ROI.
Investing in advertising is exactly that, it is investing. You don't want to pay absurd premiums for a stock. You don't want to pay absurd premiums for advertising inventory. Invest in value, invest where you see strong ROI, invest wisely. Just like the stock market prices fluctuate and you want to capitalise on value. You want to capitalise on discounted stock that is where the smart money goes.
If your company needs help navigating this changing media landscape don't hesitate to get in-touch. Our leading advertising and marketing agency in Melbourne, can help your business increase it's ROI through direct response marketing and savvy media buying. Contact us today to find out how we can help you to devise the perfect marketing strategy.
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