TV Audience Fragmentation: Realizing the Advertising Opportunity
May marks a time of year when advertisers, media agencies and networks crouch to their starting-block positions in anticipation of the start of TV’s upfront marketplace. Like so many years past, thoughts run the gamut from what will be the hottest new programs to which networks or agencies will set the pace for the pricing of national TV commercial inventory during the coming year. The upfront process can be thought of as the ultimate sausage- making machine with as much as 65%-80% of the ingredients (one year’s TV inventory) being squeezed through for sale over the course of a six-week period. As this annual event unfolds, it makes sense to reflect on its true purpose: to deliver entertainment to viewers while tendering marketing value for the event’s ultimate underwriter, the advertiser.
For an advertiser, committing millions of dollars to a TV campaign budget is really the final step within a much longer process that involves establishing a budget, understanding the consumer target, producing the commercials, vetting the multitudes of TV network and program offerings, evaluating synergy with non-TV media, planning and scheduling the pacing and spacing of the TV spots, then, finally, executing the plan. So, it seems fitting to think about how well the final TV buy reflects the intentions of all the preparatory steps that came before. In order to get insight into the process, let’s first take a look at the dynamics of TV audience fragmentation and its potential for enabling the targeting of a diverse U.S. population. We will then follow this with a view on the quality and impact of steps taken in today’s advertising/media planning process that lead up to the actual placement of millions of commercial spots for advertisers.
The Big Bang of TV Fragmentation
Media audience fragmentation has been a fact of life for nearly three decades. Even before the internet spawned millions of sites, social networks, search engines and blogs, a big bang of media choice was in the making. This explosion in media options manifested itself in the proliferation of TV outlets, magazine titles, radio stations and newspapers, catering to the quilt work of changing consumer tastes within a quickly diversifying U.S. population.
Focusing on TV, the seminal move towards audience fragmentation occurred in the late 1970s when cable and satellite operators presented an alternative to over-the-air TV. The wide-bandwidth transmission technology of these then-emerging platforms made it possible to provide viewers with a multitude of channels, more than they could ever receive through rabbit-ears or rooftop antennae. Premium movie networks like HBO appeared on the scene as well as a dozen or so ad-supported networks like ESPN, USA, TBS, A&E and Lifetime. Today, this forty- year-old foothold of fragmentation has morphed into smithereens of options as there are literally hundreds of networks available for those who want to watch only sports, only news, only pop entertainment, only investment advice, etc. in one sitting.
TV Fragmentation: Friend or Foe? TV audience fragmentation can be viewed as both an opportunity and a challenge when evaluating on which networks and shows to place advertising. On the plus side, advertisers have the potential to tailor communications to specific consumer segments that reflect the ever-expanding variety of lifestyles, product consumption patterns and cultural denominations that make up the population. For example, they can run commercials for golf clubs on the Golf Network, for marinades on the Food Network and vacation packages on the Travel Network. But what happens when they want to find viewers of this TV fare, or others like them, on other channels/programs? The reality is that they don’t watch just the Golf, Food or Travel networks. Or how about advertising a product like laundry detergent or toothpaste, where everyone could presumably be the target audience? In this case, how can audience fragments be amassed during the media placement process in such a way to make up the most meaningful prospective group of viewers for brands? And how can advertisers be assured that there is enough commercial weight against their target to have impact?
To gain full insight into the question of how well current industry TV placement practices address TV audience fragmentation we need to examine the process of translating TV media plan goals into the actual purchase of specific networks and programs to support the campaign. In other words, how well do the TV programs on the ad schedule deliver the target audience in terms of descriptive match and communication weight?
Understanding who the target consumer is and what he/she watches on TV is a first critical step in this process. Today, many advertisers and their agencies conduct surveys and/or trawl customer data bases to produce rich psychographic and demographic descriptions of their consumer targets. Maintaining the integrity of these consumer target profiles from the first step in the planning stage all the way to the purchase of TV commercials, however, has been a long-standing industry challenge for a number of reasons. The obstacles lie in three key areas: TV audience data limitations, setting realistic effectiveness goals and program bundling in the TV buy.
Download the rest of this white paper TV, Audience Fragmentation: Realizing the Opportunity, from Pre-Mediated Media.
Gerard Broussard is president of Pre-Meditated Media, an advertising research consulting practice which provides clients with audience measurement ROI analyses, media strategy and marketplace analysis. Previously he was VP, Media Insights & Analytics, at Canoe Ventures.