Brands and agencies believe that the pricing model for TV advertising is heading to a tipping point as audiences continue to fragment.
Speaking at The Future of TV Advertising event in Sydney, Omnicom Media Group chief investment officer Kristiaan Kroon and Nestle head of media, content and data Antonia Farquhar, were joined by Ten national sales director Lisa Squillace, discussing trends in TV advertising.
Farquhar was asked whether she is willing to pay more for premium TV advertising spots which have been trending up despite long-term declines in audiences.
“I’m a big believer in you get what you pay for,” Farquhar said.
“To get access to a primetime show versus something that's on very late at night or very early in the morning, there's going to be a difference there for sure.
“It goes back to our business results. Our budgets have shifted around and we have to follow the audience, so it’s just making sure we’re paying a price that is going to return on our brands in the short and long-term but yes there has to be a tipping point.
“If audiences do continue to decline, where is that tipping point where we do need to say this isn’t actually driving the business results that we need.
“But where it will go between quality and premium inventory versus your much lower ratings shows I don’t know.”
Kroon, who says OMG is the biggest TV spender out of the holding groups, echoed this.
“A large number of clients have very sophisticated media mix modelling so they know whether it works or not and clients are always going to come back to that, and rightly so,” Kroon said.
“As we move towards a Connected TV future, it’s going to be a great leveller because you’re going to be watching YouTube on the same screen you watch Ten, Nine, or maybe Facebook.
"So it’s the same size screen, the sounds on, same viewability so what you come back to is quality content, what's the integrations I can get, and most importantly will it drive the sale up if I want.
“The amount of revenue in TV has not changed for 10 years, audiences have gone up and down, the shows changed, we can have some amazing granulations in TV.
“To see what we do with individual spots in individual shows has allowed us to keep it very efficient for clients but it will reach a tipping point.”
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