Influencer Marketing

TV Advertising is a Waste of Money When You Look at the Data

By Editorial Staff

When the average person thinks of advertising, their minds likely will go to television commercials, since tv advertising has been so commonplace over the last 30 years. However, it is undeniable that television is quickly being replaced by streaming services and rising generations would rather surf social media than channel surf. If you weren’t skeptical of social media before, you will be once you finish reading this. Audience trends support this suspicion as the data shows just how low confidence in television really is among the generations with buying power.

Studies show that in the same six-year period, Americans have steadily increased the amount of time spent on digital media platforms. It’s no coincidence that around the same time this intense shift began towards digital media, influencer marketing began its meteoric rise. These figures can be represented by a 154% increase in the average time spent on digital media brings us to 7.95 hours per day. PER. DAY. At just under eight hours a day, that’s equivalent to the entire workday, school day, half the time you’re awake, and nearly ALL of your attention.

What is the digital media that has dominated American’s attention since 2014? It’s the internet. But it’s more than that. It’s any device that connects to the internet – phones, tablets, computers, wearable technology, Internet of Things, the list goes on. Each of these devices allows the user to stream, game, chat, post, like, engage, connect and consume. Needless to say, if Americans are willing to spend half their lifetime on digital media, why would they waste time watching TV ads when they can open a social media app and launch another form of personalized entertainment while they wait for their show or movie to return. The harsh reality is that traditional advertising is dead. Traditional used to mean print, but now it also includes television.

Want to know more about the future of influencer marketing? Read about TikTok’s value as a social media marketing platform here.

The data doesn’t lie as advertisers are also making the shift. Follow the market, as they say. 65% of companies indicated they were going to increase their spending on influencer marketing over the next year. We can see that over 50% of digital advertising spending by companies was on the Internet. And with the decrease in viewership and increase in costs of TV advertising, it would make sense this number should continue to grow.

daily time spent watching tv in US

Figure 1. Since 2014, Americans have reduced the amount of time watching television by 56.6% to an average of 2.38 hours a day in 2021.

time spent watching tv by age group

Figure 2. While people still watch tv, younger generations are watching tv less.

Referring to Figure 1, We’ll go so far as to say that when people are watching TV, if it is for two hours or more to hit the 2.38 hour average, they are probably on their phones during the commercials. 

Referring to Figure 2. Generations under the age of 54 spend less than three hours per day watching TV. The average Millennial consumer watches only 2 hours of TV per day and averages 3.5 hours on their smartphones alone. Plus, 48% of Millennials say they are “online constantly.” Gen Z and Millennials watch 40% less traditional TV than they did five years ago. And, the average adult spends almost five and a half hours each day watching videos, not television. Even Generation X watches less than 3 hours of television a day. Baby Boomers, even, average 3.25-4.75 hours of television per day. However, this generation is at retirement age and has a surplus of free time compared to other generations.

Since 2014 Americans have increased the amount of time on digital media by 154% to an average of 7.95 hours a day.

average time spent on social media daily

Figure 3      

advertising spending in 2021

Figure 4

According to the Direct Marketing Association it takes a customer hearing your message 7 times on tv on average to purchase a product. 

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It takes a consumer hearing a brand’s message 7 times through an advertisement before considering making a purchase of their product. If we are talking about TV advertisements, there is no guarantee that you hit the 7 mark, especially for the same individual consumer. What if they changed the channel? What if your advertisement only played once during their show? What if they just weren’t paying attention?

While television statistics provide rough viewership numbers, social media influencers have the real insights. Engagement on TikTok from influencers with under 1000 followers to over 100,000 followers varies by only four percentage points. Instagram engagement rates follow a similar pattern for the same account following size but at slightly lower engagement rates overall due to algorithm changes over the years. Yet, advertisers still pour money into television ads that provide no concrete metrics to measure success. Data-driven decisions, that’s all we’re saying about that.

tv advertising spending

Figure 5

In 2020, U.S. companies spent $72 billion on TV advertising, which is expected to decrease by $2 billion in 2021. While this may seem like a small percentage, the trend is expected to continue its gradual decline year over year. Removing money away from TV ad budgets and diverting that spend to digital forms of media – like influencer marketing.

Influencer marketing was a $10 billion industry in 2020. Being much younger than TV, this meteoric rise in just over five years sets this media channel off the charts in growth. Nearly 10x its market size in 2016, influencer marketing is growing in popularity, effectiveness, and, well…growth.

estimated influencer marketing growth

Figure 6: Influencer marketing is set to grow 9.7B in 2020.

Cost for TV

Production costs for television ads far outweigh social media and influencer marketing production costs. Depending on the quality and length of a TV ad, ranging from 30 seconds to half-hour infomercials, the estimated cost is $20,000 to $1 million. 

“Two other factors that affect the costs of TV commercials are the network and time of airing. Primetime rates between 6:00 to 10:00 pm are the highest. These are the peak hours of television entertainment, and when most consumers are watching. If a product targets the market audience within these hours, the media ad spend alone has an average going rate of $350,000 per 30-second national TV spot. On the other hand, daytime advertising ranges around $150,000 per 30-second national TV spot. Add that up to the production expenses to calculate the total costs.”

  • TOTAL is between $400,000-$1.35M during primetime and $170,000-$1.15M during the day between ad spot and production for 30 seconds.

In addition to the ad length, TV commercial production costs vary by network and time of airing. Primetime rates are the highest between 6:00pm and 10:00pm when the most consumers are watching. This is also the time most popular shows air for maximum entertainment. During these hours, ad spend goes for $350,000 per 30-second national TV spot. Daytime advertising isn’t much better at $150,000 per 30-second national TV spot. Add in production expenses and talent cost and you’ve got your hefty total spend anywhere from $400,000 to $1.35 million or more.

Television is not only ineffective compared to influencer marketing, it’s outright expensive. For just one primetime 30-second ad spot, you could hire two, three, four, or more full-time employees, plus benefits. Imagine what your team could do in a whole year that you’ve now spent on 30 seconds of a Hail Mary.

  • According to Statista Airtime for any national ad (including averaging in the middle of the night) is a little more than $104,000 in 2019)

average cost for 30 second commercial

Figure 7

Specific Cost Examples

Let’s take a step back to visualize what this looks like. Take the Super Bowl for example. In 2020, there were 102.1 million viewers of the Super Bowl and at least $5 million spent for every 30-second TV spot. A 30-second commercial was $5.6 million that would show one time, on one day, during one show.

super bowl tv ad cost

Figure 8

Another instance is award shows. We’ll look at the Oscars’. The Academy Awards are now the second most expensive TV buy, dominated only by the Super Bowl, with the number of commercials skyrocketing. The 3.5-hour telecast has 14-15 minutes of commercials per hour, which is equivalent to the 15 minutes of commercials per hour for the Super Bowl. In 2016, the Academy Awards brought in $155 million in advertising revenue with the average 30-second spot selling for $1.72 million. The following year ad prices rose to $1.9 million.

Costs for IM

Switching gears to influencer marketing costs, what would it look like for your bottom line if you invested in influencer marketing? “Extensive social media advertising and campaign management services range from $1,000 to $3,000 per month, ad spends not included.”

The net competitive advantage of tv advertising vs influencer marketing is that influencer marketing is a much lower cost because the same level of production and knowledge is not required. 

Speaking of cost, need to know your budget for a successful influencer marketing campaign? Check out our influencer pricing guide for TikTok here, Instagram here, and overall pricing breakdown here.

Production Value

TV ad production begins with the design phase which involves the development of creative content. The production process includes everything from developing the script, creating a storyboard, renting equipment, hiring a crew, and hiring actors. Each of these is a separate moving piece for a TV commercial production that must be worked into the budget and taken on as a responsibility of the brand sponsor.

After the production phase, the filming flow starts on the initial shoot, the scenes are edited to fit the time length, and then the commercial video is reviewed for final approval. Therefore, post-production requires just as extensive of a team and budget, not to mention the time frame for creating the commercials far outweighs their lifetime value. Once the commercial is actually made, then you have the additional broadcasting budget. That’s more than double the investment and more than double the team for a similar influencer marketing campaign.

Additionally, you don’t have to pick a time, the ads optimize for you and because the content from influencers always exists, you don’t have to pay a premium for the time slot.

When considering the timeline for influencer marketing it depends heavily on what medium is being used and whether the sponsorship fits into the creator’s content naturally.  According to some popular Youtubers, they typically think it takes about 3-4 hours for them to create an 8-10 minute video.  

Sponsored Instagram content takes much less time while building a long-term strategic partnership could be much longer.  It really depends on the complexity but long story short it is shorter than TV adverts by a lot and you can see the product throughout the process and make edits on the fly. 

Looking at the length of media and content lifespan influencer marketing is available 24/7 365 days a year and does not disappear as the content lives forever. Influencer marketing also gives the ability to reuse media and repurpose it to other social channels if success is found. As Well as the flexibility to have a short ad all the way up to a 30 minute dedicated video.

Furthermore, influencer marketing has a much quicker turnaround than TV and allows you to make more small strategic changes. The ability to change directions or strategies without having to reproduce an entire television commercial is valuable. There is also an opportunity to offer promotional codes, giveaways, while being more creative than network television would allow. With all this flexibility there is much less of a financial commitment that tv advertising while also having the ability to run dynamically tests with small investments ($1000’s of dollars) instead of $100,000’s of dollars are extremely feasible. 

In conclusion, the return on investment for influencer marketing has proven to be more effective than typical tv advertising. As the new wave of influencer marketing continues to gain traction with mainstream companies, it will likely make the cost and overall effort of tv advertising obsolete. Consumers typically will look to their phones for personalized content as the mundane and played-out tv advertisements air during their shows and programs. Influencer marketing is cheaper, more quantifiable, and more effective than traditional tv advertisements and is the future of personalized consumer advertising.

This article was written by Sawyer Cairns

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