A few weeks ago, we noted how advertising spending through digital media had reached new heights and is now nearly on par with television advertising in terms of total media spending. We even suggested, that in the very near future, television advertising, long the king of ad spending, will soon be supplanted by spending on digital media.
However, despite more people watching television on mobile devices or subscribing to video content services (e.g., Netflix) or reducing the number of channels they have available through cord-cutting packages, the future of television advertising may not be so dire. In the U.S. this media outlet continues to attract a massive amount of ad money and will likely remain that way for many years to come.
In fact, as discussed in this Wall Street Journal story, most major television networks are experiencing a growth in ad revenue. The networks attribute growth to two factors. First, the demand for scatter advertising, which consists of advertising slots purchased closer to a program?s air date, is increasing. While this is due in large part to strong U.S. economic conditions, advertisers like scatter purchasing because it offers more flexibility in their spending decisions, as opposed to making advertising purchase decisions many months in advance (i.e., upfront ad purchasing). For the television networks, higher demand for scatter advertising means they can charge higher prices.
Second, and more interesting, some advertisers appear to be returning to television after less than successful ad spending in other media outlets. In particular, some are moving away from the media outlet that many predict will overtake television advertising ? digital media. The story suggests these advertisers are concerned about the value being obtained from ad spending on digital media. In particular, problems with false ad clicks and whether viewers using mobile devices can fully experience ads given the size of a device?s viewing area.
So, despite the predictions, it would seem the future of television advertising is actually a bright one. Well, that may be a bit too optimistic. More likely, the future of television advertising is the same as the future of digital media advertising because in the future these almost certainly will be one in the same. That is, there will be no difference between television and digital media.