As little as a decade ago, television advertising accounted for 30% of the total advertising expenditure in Australia however, it now accounts for just 21%.
The advertising marketplace is being dominated by online, in particular – Google and facebook.
Over the past decade savvy marketing managers have been questioning the value of TV advertising and just how many ‘wasted eyeballs’ we’re paying for. Online advertising and CPM bidding (you only pay when your ad is seen by your target audience) eradicate this concern for us.
Free to air stations are hurting the most with Networks Nine and Ten reporting losses of $236.9M and $231.7M and Seven reporting only a small profit of $12.4M in the half year to December 2016 report.
So, is this the end of TV advertising and inevitably the end of free to air TV?
For TV advertising to compete with online, their rates must become more competitive.
I attended Network Ten’s advertising seminar last week to see if they “have been paying attention” (pun intended) and the answer is yes, I was surprised by the low rates on offer. As much as a 72% discount and included programs such as Goggle Box and The Bachelor. Click HERE to see packages.
Cost per thousand (CPM) is as low as $63 and individual spots $112 each in metropolitan areas – this included the production of the TV commercial, which (surprisingly) was also very good. The production is outsourced to Oxygen360. Check out some of their work HERE.
However, the average CPM for facebook advertising is still only around $10.
The question is … have free to air stations reached their advertising rate threshold or will we see TV advertising costs continue to decline?