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Big Budget Commercials are Poor Customer Acquisition Tools Thanks to Audience Fragmentation

Audience Fragmentation Media Customer Acquisition

This is not a Super Bowl commercial post; it will not rank the best/worst commercials. I made a promise to myself that I would never write another one of those; God knows there are way too many already being published. However, this post, on the day after the 2015 Super Bowl, is certainly inspired by the continued frenzy over these commercials.

Super Bowl commercials have become an event in their own right, inspiring blog fodder and YouTube-watching frenzies all around the world. The demand for Super Bowl commercials is so high that Canadians, tired of having broadcasters substitute their own ads for the popular ones shown in the US, successfully lobbied telecommunication regulators to put an end to the practice.

Clearly, there’s a big demand for these commercials, which – along with the impressive real-time audience the big game receives – is the reason television networks can demand such a high price. However, is the investment worth the return when audience fragmentation is so high?

Big Budget Commercials are Poor Customer Acquisition Tools Thanks to Audience Fragmentation  

There’s no question that television continues to command large audience attention; however, there has been a ten-fold increase in the number of channels available. Combine that with the hundred-fold increase in the number of programs and episodes available on those channels, and we begin to see the audience erosion marketers must address. And that doesn’t include the effect of that media shared across the Internet, YouTube channels, or made-for-Internet television (Eg. Netflix original programming).

According to audience research firm Simulmedia, “Compared to the 67.3 rating received by the highest rated show in 1953 (CBS’s I Love Lucy), the highest rated show for the 2013–2014 season earned only a 12.8 rating (NBC’s Sunday Night Football). So while big TV networks can deliver audiences, fragmentation requires advertisers to look deeper into the data to find their best target audience and optimize their media investment.”

Are You Reaching The Right Audience?

With the audience so fragmented, is this an achievable goal? Advertisers today are more challenged than ever before to be both strategic and reactive in their efforts to reach, engage, and drive action among their audiences.

To understand the effect of audience fragmentation in television, Simulmedia looked at three television networks that ranked high in their concentration of adults 18 to 34 for the month of May, 2014. They then delved deeper into that database to pinpoint the concentration of 18- to 34-year-old pizza buyers. The study determined that while those networks reached the largest number of adults in the target age range, the desired sub-set (18- to 34-year-old pizza buyers) were largely missed. In fact, one-third of the target group of pizza-buyers were enjoying television programs on smaller niche networks not tracked by Nielsen.

If marketing has one goal, it’s to reach consumers at the moments that most influence their decisions.

Reaching the right consumers is difficult enough; reaching target consumers at the moment most likely to influence their purchase decisions requires data. Big data.

More importantly, to acquire new customers in this fragmented media world, marketers must rethink  traditional advertising strategies and metrics. The media landscape has become impossibly large and convoluted by time-shifting, DVRs, and mobile devices. The go-to “reach” metric is no longer sufficient to justify big-dollar ad campaigns. Local and niche campaigns require more investment in data infrastructure and analysis, but when combined with an understanding of the customer journey, will generate greater return on investment (ROI) than big-budget commercials.

Sensei Debates

Are big-budget television commercials, like those created for the Super Bowl, effective for customer acquisition?

Sam Fiorella
Feed Your Community, Not Your Ego

Supporting Data: Simulmedia Case Study

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2 comments
berkson0
berkson0 5pts

The last throws of a dying model? Super Bowl ads remind me of the phrase "Nobody ever got fired for buying IBM." I hear conversations (including our own internal) around effective marketing but when new models and methods have yet to prove efficacy, fear continues to drive marketing spend to "tried and true."

samfiorella
samfiorella moderator 5pts

@berkson0  I'd say that mass advertising (television commercials) is not a dying model, but it has dramatically changed. We need to dig deeper into available data (or work on creating new data sets) that are combined with customer journey analysis.  Over here, we're looking at how we craft the micro-targeted commercials with other media campaigns to better target and track the effect on customer lifetime value. 


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