Opinion: Brands Are Still Spending Way Too Much On TV Ads

Although television used to be the gold standard for advertisements, the medium is facing a new threat as more and more advertisers are putting TV ads on the back burner to make way for digital advertising. New data from Interactive Advertising Bureau showed a 22 percent increase in revenue from digital ads in 2016, surpassing TV for the first time ever. With the rapid pace of growth of digital advertising, it’s natural that advertisers are turning their attention away from TV more than ever before.

The proliferation of platforms and users has created more opportunity for digital advertising, and missing out on digital ads, particularly video ads, is a lost opportunity for your brand. Below are three reasons businesses should commit more resources to digital advertising, rather than traditional.

Cord-cutting

One of the main motivators for the turn to digital ads has been falling cable subscription rates. In the first quarter of 2017, cord-cutting, or households canceling their TV subscriptions for digital options, hit its highest rate yet. Building out a business’ digital advertising efforts now puts them in a better position to compete in the future as new over-the-top devices emerge and cable companies incorporate their offerings into them.

To begin to make this switch, advertisers must dedicate more resources toward placing ads on these OTT device platforms, not just the traditional channels, as a way to reach those who no longer use cable. Millennials are leading the pack in cord-cutting with 43 percent of Americans aged 18 to 34 reporting that they’ve never had cable, satellite, or fiber optic TV or they have canceled their services. Therefore, reaching this coveted market relies on much more creative advertising solutions.

Increased engagement rates

The TV ads of the past have been a passive experience: every ten minutes, they come on and viewers watch them, or, more often, tune them out. However, digital video gives advertisers entirely new terrain to connect with audiences in an entertaining way. While digital ads may not receive as many viewers, they’re extremely targeted, which makes for a more engaged audience than TV ads.

Digital video advertisements average a clickthrough rate of 1.84 percent, higher than all other formats. Short videos on social media platforms can captivate audiences to act quickly, unlike TV ads. Right from a mobile device, a viewer can see an ad and turn to brands’ websites. To keep viewers interested, businesses should strive to create short videos that tell a story and makes them want to learn more about the brand or product in the ad.

Cost efficiency

It’s no secret that TV advertisements in primetime slots cost a hefty price tag, which is why nearly all national ads are placed by large enterprises. Digital advertisements provide a less expensive alternative to TV that is perfect for small to medium-size businesses. And it’s not just that they have a lower cost to place—businesses also see a better ROI on digital ads than TV. With their cost-effective nature, digital ads disrupt the old, expensive model of strictly TV advertising and allow for brands of all sizes to compete for audiences alongside one another.

In contrast with TV ad campaigns where one ad is created and runs for a certain length of time, digital ads give businesses the freedom to implement many different videos to see what connects with audiences. Businesses should create their digital ads in abundance and continually tweak them for increased engagement and greater ROI.

The opportunities for digital advertising are only growing, and they’re attainable for more businesses than ever before. Committing more resources toward digital advertising now puts brands and companies in a better position for the future. Businesses should do a deep dive into their current advertising budgets to assess what is working for them and what can be redirected toward digital ads. Reorienting spend toward digital is a decision businesses won’t regret.


David Lee is the founder and CEO of Shakr Media, where he and his team are making professional quality video accessible to everyone. David has nearly two decades of experience in the tech industry. Prior to founding Shakr, David served as the vice president of Zenitum, an augmented reality software company and founded several other startup tech companies, including Wetoku and Avenir Internet Systems.