Rethinking The TV Plan
Marketers in Asia’s growth markets may have a point when they grumble about ending up with the same TV plan, given the relatively few choices media planners have had to play with.
All that, however, is changing.
New channel launches, especially across digital networks, are dispersing TV viewers, making reach and frequency targets harder to meet.
At the same time, broadcasters are investing in bigger budget shows, triggering ratings volatility that threatens to disrupt inflexible ad buys.
The job of a media planner is getting noticeably harder, and agencies are responding with more sophisticated software to provide better, as well as increasingly differentiated, media plans.
“When the TV environment was simpler, planners could use their own heuristics and their own experiential judgement to make the call,” explains Malli CR, CEO of media agency network Starcom MediaVest Group (SMG) in India.
“In a fragmented scenario, judgment and experience have to be supplemented with optimization using algorithms.”
A better toolkit
Starcom, as with many other agencies, is ramping up investment in its planning toolkit, looking to improve the media mix around traditional yardsticks such as reach and frequency while blending in alternative measures for sales or brand KPIs.
Advertisers are under greater pressure to improve the performance of marketing plans, Malli points out, especially as media costs rise and internal targets become more demanding, which should accelerate take-up of new planning tools.
At the same time, India’s media landscape is becoming more complex as the phased digitization of India’s cable network, the primary TV platform for over 60% of India’s TV households, paves the way for more channels to enter millions of homes.
In Hindi-speaking markets for example, more than 70% of programs already deliver less than 1% of the TV audience.
With more channels on the way, fragmentation will only get worse, raising the price of using last year’s plan to reach the same audience.
Digitization should have an upside, reducing commercial clutter and making it more cost-effective to target specific consumer groups, but there are signs online video sites compete more directly with niche channels for ad revenue, posing separate challenges for agencies and media owners.
“TV optimization is going to be core to improve the television ROI,” Malli says.
“Secondly, we shouldn’t wear blinkers and only look at TV, but see how we can increasingly find a role for digital in plans.”
In June, SMG India unveiled optimization software that could plan across both online and TV, having run tests that showed online video consumption had become high enough among upscale audiences to warrant a slice of spend that would normally go towards TV.
The software is already being used by some big spending categories such as telecoms and banking, Malli says, but the biggest endorsement would come when FMCG brands, who contribute more than half of TV ad revenues, come on board.
Combined TV and online video plans are becoming well established in China, a critical market for many MNCs where online penetration and consumption is high, and overall levels of TV spend, combined with soaring inflation, continue to spur investment in planning tools and media research.
Similar advances in Asia’s other growth economies have been more muted. Digital volumes in much of Southeast Asia remain small, while TV spend congregates around a smaller number of channels, limiting the options planners have.
Moreover, in priority markets such as Indonesia and Vietnam, vital fuel for planning software – good data – is in short supply. Improving the quality of the raw material, rather than devising clever things to do with it, is the priority here.
Nonetheless, while China remains a hotbed of activity, agencies feel online remains underinvested as an ad medium across Asia, despite low levels of penetration in many markets.
As a result, different approaches are starting to evolve. Mindshare for example has placed digital planners alongside traditional planners across all of its client teams in APAC, while activating online planning capabilities for TV planners from the last quarter in 2012 through to the first quarter in 2013.
China and India are already well placed to benefit from multiscreen planning, with Indonesia, Malaysia and Thailand likely to come on stream soon, points out R Gowthaman, Mindshare’s CEO of South and Southeast Asia and chief client officer for the Asia-Pacific region.
“The CPM in digital is quite competitive compared to the CPM in television,” he says.
“When you shave off the long tail channels in television and place those investments in digital, you invariably get cheaper incremental reach. A ballpark figure which won’t be way off would be on average 4% more reach at 4% less cost. Why would anyone say no?”
This is an edited extract from the Q4 2012 edition of The Asia Media Journal. The entire issue can be downloaded as an iPad app here.