It is easy to spend much money on advertising and marketing without seeing results. When I ask clients about their advertising spending and results, I receive a variety of answers. Many are discontented with the results or lack good tools to get to the bottom of the picture. Let’s put those observations into a broader context.
Key Facts About Advertising In America
The struggle to earn attention, win new customers and maintain customer loyalty has never been more difficult. At the same time, we live in a golden age of technology when there are more options than ever before. Take note of the following observations from recent reports:
$67 Billion. That is the estimated spending on US TV advertising in 2016 as per Adage. It remains a major category even while digital advertising continues to grow.
19-46 Hours of TV Watched Per Week. In Q4 2016, Americans watched between 19 to 46 hours of television per week (Source: Nielsen).
The Older Demographic Opportunity. According to the Nielsen data reported above, TV viewership is highest for households over the age of 50. That represents a major opportunity for advertisers to make an impact. According to Harvard research, Americans between the ages 65-79 have the highest home ownership rates – over 80% – in the population.
$46 Billion. That is how much money was spent on digital advertising alone in 2016 in the United States according to Adweek. That equates to $148 of digital advertising spending per year per capita in the United States!
Standing out in this crowded media environment is difficult!
The Fundamental Cause Behind Runaway Advertising Costs
Based on the above data, it is clear that TV and digital advertising are vibrant media with many viewers. If that is true, why are so many businesses frustrated with their advertising results? As I get to the bottom of the situation with client after client, the true cause comes to light. There are usually fundamental problems with the company’s marketing strategy.
An effective marketing strategy reduces costs because it helps you to focus your efforts. For example, if you are seeking affluent Baby Boomers for a wealth management service, Pinterest will probably be a waste. Instead, you are likely to generate much better results by targeting your message to affluent ZIP codes. If your strategy points you toward TV, then you owe it to yourself to use TV effectively.
How Rentrak Reduces TV Advertising Costs
For decades, Nielsen ratings have been a prime factor in guiding TV advertising spending. However, this data resource has significant limitations. For example, you may be able to identify residents by age range or family composition. Within those categories, there are likely some people who are likely buyers for your services. However, the process is like trying to find a needle in a haystack! Fortunately, there is a better way.
In the hands of a skilled media buyer, Rentrak StationView is a powerful tool to improve advertising results. If you are in the automotive industry, you have an especially powerful opportunity. You have the ability to target households by car ownership. If you sell BMWs, you can focus your advertising on households that already own BMWs and similar high-end vehicles. That way, you reduce the advertising directed to people who have no interest or budget to purchase your products.
Using Rentrak with your marketing strategy reduces advertising costs due to the structure of the advertising market. Generally speaking, TV advertising prices are strongly influenced by Nielsen ratings. However, I have also found that Rentrak data identifies opportunities to buy access to a client’s preferred target market at a lower cost. Why? In short, there are lower-priced advertising opportunities where you can place your message. This does not occur every day or on every program – Super Bowl advertising is likely to remain highly expensive. Today, this targeting represents an excellent way to focus your TV advertising where it can make the greatest difference.
Saving Money On Existing Marketing Programs
What if you are already using TV, digital and direct mail? How do you know if you are receiving good results from these activities? In my experience, the solution lies in analytics and reporting. This program starts with obtaining historical data on your marketing activities from all of the media channels currently in use. The next steps include comparing these results to your strategy. Are these efforts producing a good return on your marketing strategy? Starting to ask these questions is one of the best ways to set yourself apart.
With over a decade of experience in TV sales, I know how to make TV work… And when it just isn’t right for your marketing needs.