TV Advertising Is no Longer the Holy Grail

Fragmentation in advertising is good for small businesses as it gives such businesses an opportunity to compete effectively.  Where small businesses were previously left out of advertising on video-rich platforms like television, YouTube has created opportunity.

Nearly 50% of U.S. households now have digital video recorders (DVRs), which have resulted in fewer television commercials being watched, but the proliferation of DVRs is not the only thing causing the shift in ad dollars from television to YouTube.  Here are four other drivers of this shift that small business owners need to know to take advantage of the increasingly fragmented advertising market.

  • YouTube advertising is more targeted than TV advertising.  Because audiences are so broad on television, TV advertisers end up spending ad dollars on prospects that are not their target.  With YouTube, advertisers can specifically target subscribers by age, gender, location and even interest.  And, they only pay when their ad is watched.
  • YouTube advertising is more measurable than TV advertising.  An advertiser just cannot know with certainty if a specific audience was reached on television.  Nielsen’s use of a representative sample of the population (measured through people meters) is far less sophisticated than the viewer analytics available to advertisers on YouTube.
  • Smartphones rule.  YouTube audiences are growing while television audiences are shrinking.  YouTube is among the top ten most frequently used smartphone apps.  How many Cord cutters and Cord nevers have a smartphone?  A majority.  In fact, these individuals are more likely than the general population to use smartphones.  So, YouTube advertisers have an opportunity to reach an audience that is unreachable for TV advertisers.
  • YouTube advertising is more affordable than TV advertising.  Most small business don’t dare to dream of using television advertising to get the word out about their products.  By its very definition, broadcast advertising gets audio or video content out to a mass audience.  Mass audiences cost mass dollars.  Marketers can more effectively spend more modest advertising budgets on YouTube, where costs can be controlled on a daily basis.

While it’s great to have a budget large enough to warrant television advertising, it is not the only place to build brands today.  Advertisers with modest budgets can deliver targeted, measurable ads online and reach an audience that is not even accessible on television.  TV is no longer the Holy Grail of advertising…and that’s good news for small business owners.