Television Advertising Basics

The purpose of television (in the US, at least) is audience delivery

TV is an audience delivery system: its value to advertisers is in the manufacture, collection, and delivery of an audience to an advertiser.

The first TV commercial was aired in 1941.

Advantages of Television Advertising 

Television reaches 99% of American homes and is particularly popular with consumers who are often targeted by advertisers.

TV is great for advertising "common consumables:" cars, household necessities, snack food, etc. "Stuff you get Walmart and Target."

TV's combination of color, sound, and motion offers tremendous flexibility in delivering an advertiser's message.

Despite some declines in viewership due to the Internet, TV still delivers a large audience: Americans watch TV twice as much as they listen to radio and 10 times as much as they read newspapers...

...and since the advent of cable, it also delivers a more targeted audience. Advertisers reach fewer people, but they are more like to reach the people they want to reach most. Their advertising dollars are spent more efficiently.

It's also easier to localize and regionalize advertising on cable, making TV advertising more possible to businesses who couldn't have afforded it in the past.

TV is still the choice of an overwhelming number of people for news (70 percent for TV, 10 for newspaper) and entertainment.
 

Disadvantages of TV

Viewers often tune out ads. Heavy (and expensive) repetition is often needed before the advertising message "sinks in."

As a mass medium, it doesn't work as well for upper income individuals (with lots of discretionary income) who would otherwise be desirable targets for advertisers. Historically, daily viewing times tend to decline as income rises.

Viewers often "evacuate" when commercials come on.

Channel surfing has become an ingrained habit for most viewers.

Viewer attention spans tend to be short.

Viewers tend to think of commercials as "clutter." Anything that ISN'T the program they want to be watching is considered clutter.

Clutter used to take up about 15 minutes per hour, but that number has been rising in recent years. Additionally, more commercials have become shorter, contributing to the perception that there's more clutter.

TV Ratings and Related Advertising Factors

DMA

Designated Market Area: basically, the metropolitan area covered by a TV signal. Markets are ranked according to the number of people reached by TV signals in that area.

Example:

#1: New York,
#2: Los Angeles,
#3: Chicago,
#22 Pittsburgh,
#36 San Antonio

"The Nielsens"

The rating service used by TV stations and networks to determine how many people are watching. Stations pay a LOT of money to this company to get this information, and they use Nielsen statistics to sell advertising.

Measurement has traditionally been done through diaries that are filled out by the "Nielsen family."

Electronic measurement "boxes" called People Meters are becoming more common.

About 9000 households participate in this service during any particular "sweep."

"Sweeps"

Time periods during which audience research is conducted.

Most important: February, May, and November (when you see a lot of "series" shown on news programs).

In some DMAs, sweeps of some kind are done constantly.

Overnights are measurements that are available the morning after a program airs.

Ratings

Broken into "Rating" and "Shares"

A program's rating is expressed as a percentage, usually referred to as rating points.

Formula: Program audience divided by total TV households. The TVs DO NOT have to be turned on.

Example: There are 1,000,000 TV households in a TV market. If 300,000 are watching Desperate Housewives, then the rating for the program is 30

The share is the percentage of households watching a program compared to other programs which are on at the same time. In this case the TVs MUST be turned on.

Example: There are 1,000,000 TVs in a TV market, but only 600,000 are turned on and actually have someone watching. 300,000 of those TVs are tuned into Desperate Housewives. The program's share is 50.

HUT Levels

HUT=Homes Using Television. Tells you how many TVs are turned on at any given time. Used to determine share but not ratings.

Dayparts

Each TV viewing day is broken down into segments called dayparts.

Morning: 7-9 AM Monday thru Friday (called "morning drive" in radio)
Daytime: 9 AM-4:30 PM Monday thru Friday
Early Fringe: 4:40-7:30 PM Monday thru Friday (afternoon or evening drive in radio)
Prime Time: 8-11 PM (7-10 PM in Central Time Zone)
Late News: 11-11:30 PM
Late Fringe: 11:30 PM-1 AM
Overnight or "Graveyard" 1-5 AM

Avails

Advertising slang for time slots that are "available" and can be sold to advertisers.

Pre-emption and rate scales

Avails are sold to advertisers according to three classifications (may vary by station or market).

• Nonpremptible (most expensive)
• Immediately Preemptible
• Preemptible with Notice

Make goods

When a commercial doesn't air for some reason (could be technical difficulties, preemption for breaking news, etc), the station must do a make good at some other time.

Syndication

Most TV stations buy programming from some source. They pay for it by

Off-Network Syndication: reruns of network shows, usually on cable channels or networks.

Television Advertising Today

It's not just the "idiot box" in the living room anymore. Boxes are all over the house, and video is available on computers and other mobile devices. This poses new challenges, but also new opportunities for advertisers.

Major networks have generally sustained their audiences despite fragmentation.

"Lowest common denominator?"

Network revenues have increased lately, but it's probably because there's more "clutter."

More advertisers are buying sponsorships of entire programs: ABC News.

• Advertisers get less competition during the program
• Viewers get less clutter

Brand Placement or Product Placement

An advertiser pays to have a product shown prominently during the content of a program. Some people refer to this as "subliminal" advertising, but technically it's not.

Block Programming

Few network shows stand on their own. Each is connected to programs around it.

• Lead in: the program before
• Lead out: the program after
• Block: a combination of programs in a given time period
• Hammock position: a new show placed between two older, successful shows.

Pricing of a new show often depends on where it's placed in the schedule.

A new show is judged by how well it "holds the audience" that has been built by the shows around it.

Related information: TV Infomercial Advertising and Cable Television Advertising.