All I know is everything you know is wrong.
Leading advertisers allocate most of their budgets to Digital platforms. TV is dying. Most video time is spent on cell phones. Only young people use Facebook. Only old people buy BMW’s. There are more iPhone users than Android users. Abraham Lincoln said, “Not every quote you read on the Internet is true.”
Which one of those assumptions is not true? If you picked Abraham Lincoln’s Internet advice you are partially correct. In fact, against common beliefs, none of the statements are true. Yet businesses often make strategic, game-changing decisions based on misconceptions like these.
One of the first lessons I was taught as a young television advertising sales executive, “It’s not what you watch that matters, it’s what everyone watches that matters. Know the data.”
Let’s look at the data.
The [not so] Big Apple. In 2014 the news department of my local CBS television affiliate developed its first mobile news application. It was a proud moment on launch day. The only problem was that most of our staff could not install the application on their phones. Why? The development team, iOS users, assumed that iOS usage dominated the market. Android compatibility could wait for phase two. In a microcosm of iOS users that reasoning works. On an application relying on total market penetration for revenue generation, it was a poor strategic decision. At the time, iOS had a worldwide market share of 24% and a 42% share in the U.S. Android OS held a 54% market share worldwide and a U.S. share of 52%. Globally in 2021 iOS has increased only two percentage points, while Android OS dominates with an increase to 73% market share.
Snappy Beamer. An associate recently presented a social media marketing case study wherein automaker BMW partnered with Snapchat to promote the launch of the BMW X2. The campaign implemented 3D augmented reality to allow Snapchat users to configure and virtually drive the X2. My first thought was, “Cool.” My second thought was, “cool” doesn’t always accomplish a campaign’s goal. I questioned whether Snapchat’s [assumed] young audience matches BMW’s [assumed] older buyers. I pulled the data which appeared to validate my assumptions. 59% of new BMW purchases are by folks over age 55. Only 1% of BMWs are sold to people under age 24. Meanwhile 48% of Snapchat’s users are 14–25. Looking closer at the data, however, BMW’s second largest buying group, 40%, is aged 25–40. This aligns perfectly with Snapchat’s second largest user group, 30%, aged 26–35. The X2’s price point at $37,000 also matches this demographic. Score: BMW Marketing Team’s Data Research: 1, my assumptions: 0.
Face the Truth. Wealth, and therefore disposable income, is in the hands of older Americans. They are not the largest slice of the American population pie (about 30%), but 69.3% of America’s wealth is held by people age 55+. So why are Madison Avenue advertising agencies and entertainment producers so enamored with targeting a primarily young audience? The buying community often thinks only older people watch TV, not young people. Conversely, it’s often assumed only young people use Facebook, not older people. Data shows that younger Americans watch plenty of TV and plenty of older Americans hang out on Facebook. In 2021, 51% of people ages 50–65, and 34% of people 65+ use Facebook. Facebook shouldn’t dominate advertising budget allocation when targeting older Americans, but it should be in the mix. You don’t have to be a politician to follow the money. You simply must follow the data.
“I’m not quite dead yet. I might get better.” -Monty Python and the Holy Grail. Television advertising died when the first, appropriately named, remote control, The Lazy Bone, was introduced in 1950. People were sure to click to another channel when commercials aired. Then TV died when VHS players came along in the 1970's. Fast Forward to a fragmenting cable audience in the 1980’s and TV advertising once again gasped its last breath. Finding my advertisement is like finding a needle in a haystack. Time-shifting DVR’s twisted the knife, making sure TV was dead in the 1990’s. In the 2010’s Over-the-Top (OTT) Streaming was a serial killer, first slaying VHS and DVD rentals, and then cable and broadcast TV. Today television is moving to addressable placement, away from the traditional linear TV programming grid. Similar to Internet placement, buyers will purchase viewer impressions with set target parameters. Commercials will be served to viewers based on tracked personal data. Two people on your street will watch the same program, yet are served difference commercials. Cripes, my broadcast television station’s call letters might as well be KR.I.P.
Take the fork out of the TV. Someone forgot to tell advertisers that Television advertising died. According to Nielsen Media’s Total Audience Report, March 2021, of the $112 Billion dollars spent on advertising in the U.S. in 2020, 80% went to television. That’s roughly the same percentage allocated (between 60% and 80%) to TV advertising by digital giants Facebook, Amazon, Netflix, Google, and Verizon. Of the record setting $7B of advertising spent in the 2020 Elections, 78%, $5.45B went to TV.
Why this trend? Data matching. The allocations of advertising spend line up with media usage and a medium’s effectiveness to influence. In 2020 the average person 18+ spent 3-Hours and 41-Minutes of each day watching TV. This is the most consumption time of any medium in a 10-Hour media-usage day. Time spent watching video on a smart phone each day averaged merely :15 Minutes.
Traditional media - television, radio, and print - is not dead. These mediums evolve digitally to remain relevant. Advertising strategies must also evolve to remain effective and efficient.
How you allocate your advertising budget is determined by your goals, needs, mission statement, budget, competition, customer desires, and other market forces. After these factors are considered, research and data will largely dictate which medium mix will be most effective and most efficient. Pay attention to what successful businesses locally and nationally do. During and after your campaigns the most important data, your data, should be assessed. What are the Key Performing Indicators? Is the strategy accomplishing our goals? Adjust as needed.
Now you know all I know: know the data.
__________
References:
Mobile OS market share 2021. (2021, June 29). Statista. https://www.statista.com/statistics/272698/global-market-share-held-by-mobile-operating-systems-since-2009/
Sacco, A. (n.d.). U.S. smartphone market share numbers for Q1 2014. CIO. https://www.cio.com/article/2376882/u-s-smartphone-market-share-numbers-for-q1-2014.html
BMW test drives Snapchat’s AR lenses in their 3D car ad. (2020, November 17). Digital Agency Network. https://digitalagencynetwork.com/bmw-test-drives-snapchats-ar-lenses-in-their-3d-car-ad/
BMW buyer demographics by age, income, gender, home value. (2021, June 1). Hedges & Company. https://hedgescompany.com/blog/2019/03/new-bmw-owner-demographics
(n.d.). SEO Training and Link Building Strategies — Backlinko. https://backlinko.com/snapchat-users#snapchat-age-demographics
The 2021 social media demographics guide. (2021, June 15). Khoros | Digital care, communities, & social media software. https://khoros.com/resources/social-media-demographics-guide
The Fed — Distribution: Distribution of household wealth in the U.S. since 1989. (n.d.). Federal Reserve Board. https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:12
Population distribution by age. (2020, October 23). KFF. https://www.kff.org/other/state-indicator/distribution-by-age/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Record shattering political ad spending in the 2020 election cycle. (2020, October 15). https://www.businesswire.com/news/home/20201015005996/en/
Datacenter. (n.d.). Advertising, Marketing, Agency, Tech and Data News | Ad Age. https://adage.com/datacenter/marketertrees2019#
The Nielsen total audience report: Advertising across today’s media. (n.d.). Nielsen | Audience is Everything — Nielsen. https://www.nielsen.com/us/en/insights/report/2021/total-audience-advertising-across-todays-media/
Nielsen total audience report shows signs of media ad spend recovery for 2021. (n.d.). All Access. https://www.allaccess.com/net-news/archive/story/205771/nielsen-total-audience-report-shows-signs-of-media
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