Traditional vs. Digital Advertising: What’s Best for Your Business
We spend a lot of time at my agency determining which platforms provides the best value for advertising. We work with a lot of businesses who have historically thrown all of their marketing into traditional advertising – TV, radio, mailers, etc. But we see more and more of these businesses shifting their budget to digital advertising. Why is that?
(Get the whole gist in less than 2 minutes with this video)
Some media such as radio are much older than other media such as social media. Each has its strengths and weaknesses, pros and cons, and benefits to marketers.
Traditional media is defined as media that existed before the rise of the internet. That includes newspapers, magazines, billboards, radio, and broadcast TV and direct mail. Digital media includes everything you see online — online advertising, search engines, social media, video streaming services, and websites. Digital also includes other online and mobile techniques such as geofencing, OTT (over the top) long form video, and Digital OHH (digital out of home) such as digital billboards.
This article provides a comparison of advertising options in traditional and digital media.
Disclaimer: I’m a digital marketer. But that’s no accident — if you want to know why I made it my career, keep reading.
Attention Trends in Advertising
Viewership and listenership — what I like to refer to collectively as attention — is quickly shifting from traditional to digital. The below chart from Statistic shows how quickly the two trends are converging.
Ok, but that’s for all of traditional as a whole. What about the advertising bellwether, TV? How is TV doing?
“Traditional TV viewership continues to fall among every major demographic between the ages of 2 and 49, according to Nielsen’s Q3 2016 Total Audience Report.”
~ Business Insider, Jan 4, 2017
When viewership and shifts from one media to another, their time and attention is shifting as well.
Advertising Trends: Follow the Money
Where attention shifts, advertising shifts.
The following chart shows advertising spend for the top 200 leading national advertisers by type of media, as reported by AdAge.
Internet advertising is growing like crazy.
TV advertising has taken a dip of about 8% from its high from 2012.
Newspapers have been absolutely decimated. They’ve lost an astounding 80% of their revenue! As an example of newspaper’s demise, our local paper in Norfolk, VA, was bought after 153 years of operations for just $34 million. Of that amount, $14 million was for real estate holdings. So after toiling away for 153 years it was worth only $20 million.
Our paper has since merged with another paper 30 miles away and the newsroom has unionized out of fear of losing their jobs and pay. Yikes!
Radio, after being hammered by the emergence of TV about 70 years ago, will have lost 38% of its revenue over a 20 years span.
Magazines — down a crazy 67% in revenue!
Out of home — billboards, signage, ads before a movie in the theatre — surprisingly, have seen consistent growth, increasing revenue 66% over 20 years. Well done OOH!
Storytelling in Advertising
Advertising relies heavily on storytelling. Storytelling allows advertisers to frame a scene that’s familiar and relatable to the consumer. The best way to tell a story quickly is through video and pictures. After all, if a picture is worth a thousand words then a video done well is worth a hundred thousand words.
Image sourced via Phaidon
TV historically was the king media for storytelling. In 15 to 30 seconds, a scene could be set, a trusted advisor introduced, and a common problem would be solved.
Moving pictures is the primary reason that TV dominated radio and print when it was introduced.
Second best to TV was print due to its ability to include images. After that, radio which had the ability to describe something best suited for visual consumption.
The first internet banner ad, via The Atlantic.
In the early days of Internet advertising we had banner ads. Obnoxious and conspicuous, they were the bane of the early days of the internet. But they worked.
According to The Atlantic, the above banner ad is widely described as the first ever was a little rectangle purchased by AT&T on HotWired.com in 1994.
About 44 percent of the people who saw it actually clicked on it.
Cool, but that didn’t last long.
Banner ads don’t tell a story. They demanded attention through antics that anyone who remembers the internet of the mid 90s cringes at. Slowly the state of internet advertising advanced to be more subtle. And bearable.
Now online advertising can include images, multiple images in a slide deck, and video. Internet ads are also much more relevant given the high degree of targeting capability. Many of the ads you’ll see online these days are actually products that could make sense for you to purchase.
The use of video online with ads is a powerful combination, one that rivals TV. With attention already shifting to search engines, social media, and the rest of the internet, the somewhat recent addition of video ads tells a story is familiar to the consumer.
Broadcast vs Targeted Delivery
Since traditional advertising is broadcast via mass communication, anyone can receive it. Generally a particular type of programming will attract the same type of person.
So a particular station, channel, or program will have more of one demographic profile than another. As an example, a show about hunting will likely draw older men than young women.
Targeting with traditional advertising is based on the percentage of readers, viewers, listeners, or people within proximity of a public ad.
Using polling mechanisms such as the Nielsen ratings, the percentage of each demographic of a medium can be estimated through statistically relevant sampling.
See my previous article The Soft Underbelly of Traditional TV Ratings for some more details on how those ratings work.
The best that traditional advertisers can do is to broadcast their ad on a medium that has a high concentration of the demographic they wish to attract. They cast a wide net and hope to grab the attention of the subset of viewers that their offering may appeal to. But, they’re paying to show the ad to the rest of the non-target audience as well.
As digital advertisers, we don’t know who the individuals are that are getting our messaging, but we know that they are relevant based on the filtering we specify.
To continue with the hunting example, if we were to advertise for a hunting product on Google or Bing then we’d have our advertisement show anytime someone searched for a relevant hunting term in our relevant geographic region.
Let’s say you’re selling a hunting tree stand. If someone searches for “tree stand”, and if they are in a geographic area that you support, you can have an ad shown for your hunting stand at the exact moment that they have the intent to find a hunting stand.
Amazing, right? But wait, there’s more.
Let’s say your Google or Bing ad resonated with the person searching for a hunting stand and they clicked through to your website.
But they didn’t buy. That’s ok.
With a technology called retargeting, we can show them an advertisement on Facebook and other social networks, and on relevant websites across the internet, for your tree stand.
Retargeting reinforces the recent intent that they already expressed by going to your website.
We already know that the individual was interested enough in tree stands that they went to your website — we don’t want to let the lead go. With retargeting, which is relatively inexpensive, we can reminder the consumer about what they’re missing by not buying your tree stand and why yours is the best tree stand in the world.
We can set a budget that will dictate how frequently they will see you ad after going to your website (ex: two times a day) and we can set how long they will see your ads for (ex: 30 days after visiting your site). With this, you don’t have just one shot at getting the attention of a relevant consumer…you can stay in front of them.
With social media advertising we can create text, image, and video based ads that target consumers individually by their interests and intent.
Using various techniques, we can find individuals on Facebook who are into hunting, and have sufficient income or net worth to afford the offering, and show them Facebook ads that are relevant to their interests.
We can even have different ads for different demographics — ex: an ad with a woman hunter to show to women who are interested in hunting — because people resonate better with those who look, sound, and act like us.
Within a large demographic, we can continue to segment even further. Once they click on the ad and go to your site, you can retarget them going forward.
How Reach & Engagement Are Measured
Reach is defined as how many people see or hear the media. Engagement is how many people take some sort of action such as calling, clicking, liking, or sharing what they receive from the media.
According to Nielsen, radio has the largest reach of all – 93% of adult Americans (18+) tune into AM/FM radio each week, and 243 million each month. That’s pretty amazing. Radio is the king of reach. But radio gets very low engagement.
There’s no user interface with radio, and most of radio’s listeners are in cars during the morning commute. A person has to take out their phone while driving, remember the number or website address they just hear, and call or click — while driving. Radio doesn’t have any form of direct engagement.
But radio can lead to brand awareness and lift other types of more engaging advertising.
It’s actually quite difficult to figure out how many people watch TV. Neilen provides the number US households with TVs (about 119 million), but that doesn’t equate to people.
And TV is no longer a well defined term that means broadcast over the airwaves or cable.
There’s “linear” TV which is effectively streamed by the broadcaster and you watch whatever is being broadcast, there’s time delayed (ex: DVR), connected TVs (delivered via the Internet), and OTT (over the top) is effectively TV content delivered on non-TV devices like phones. TV has really gotten quite unruly.
Anyway, here’s a relevant chart I found from Nielsen. There aren’t hardcore numbers besides the percentage, but you get the point that TV has less reach than radio.
But at least people are sitting on their couches and they have a laptop in lap or a phone in hand, and they can navigate online much easier than engaging with radio.
This is what’s referred to as “the second screen”.
Watching TV on the first screen and following up on the offering seen on TV with the phone (the second screen).
Measuring Digital Marketing
Measuring digital marketing – represented by smartphones, PC, and tablets in the above chart — is equally difficult to put my finger on for reach.
Neilsen says that search sites like Google reach 197M people per month, eCommerce 143M, social media 179M, video sites 143M, news sites 105M, and sports sites get 57M people.
But I’m unable to find how many unique people there are. Sometimes, like it or not, the data doesn’t yield clear answers.
But what is clear is that advertisers move to where the action is, and advertising is migrating to online.
(see the above chart from AdAge that shows internet ad spend skyrocketing)
That’s because of the rich ability to target individual, just-in-time intent instead of broadcasting to the general population provided by traditional TV, radio, and print.
Engagement is very high online — it’s one giant social experiment where people rate, review, like, share, and click. If someone has an opinion, it’ll be expressed online.
Online is where all the engagement happens.
What Does All This Mean?
I’ve dumped a lot of data on you. It’s can be tough to make heads or tails of this, so let me clearly summarize the state of traditional and digital media.
People are fleeing from traditional media (TV, radio, newspapers) to digital media (websites, social media) through their smartphones and laptops.
Although some traditional media such as radio continues to have reach in the US, their revenue stream is getting hammered as advertisers follow people as their time and attention migrate to digital media.
As a marketer, do you want to keep your marketing budget with the legacy of traditional media and declining returns, or make your name in emerging digital?