Table of Contents
Overview
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- What you need to know
- Definition
Executive Summary
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- The issues
- Viewers bombarded by hundreds of commercials weekly
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- Figure 1: Number of commercials viewed daily (net of linear and digital) – Mean, by gender and age, November 2016
- Online and mobile gain traction, jeopardizing linear growth
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- Figure 2: Sales of commercials on digital platforms, 2011-16
- DVR far more popular than TVE, cVOD
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- Figure 3: Use of ad-free methods of watching video in past week, November 2016
- The opportunities
- Focusing on young men
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- Figure 4: Positive response to a commercial, by gender and age, November 2016
- Reminders and introductions both effective
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- Figure 5: Product introductions and reminders to purchase, November 2016
- Jingles keep ringing
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- Figure 6: Attractive attributes of commercials, November 2016
- What it means
The Market – What You Need to Know
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- Rise of sVOD endangers linear
- Cord-shaving to concentrate audiences
- 2020: Peak linear sales
Market Size and Forecast
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- Cyclical market shows growth in even years
- Improved measurement a spur to sales
- Secular decline ahead
- X-factor: DVR vs TVE/cVOD vs sVOD
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- Figure 7: US television advertising sales and fan chart forecast, at current prices, 2011-21
- Figure 8: US sales and forecast of market, at current prices, 2011-21
Market Perspective
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- Ad-free platforms competitive
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- Figure 9: Use of ad-free methods of watching video in past week, November 2016
- DVR successful in blocking ads
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- Figure 10: Cognizance of ads during fast-forwarding via DVR, by gender and age, November 2016
Market Factors
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- Cord-cutting tapers off in favor of cord-shaving
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- Figure 11: US residential pay TV subscriptions, 2012-15
- Improvements in hardware
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- Figure 12: Sales of 4K TV sets, 2014-2017
Key Viewing Platforms – What You Need to Know
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- Live viewing still king
- Young audiences gaining devotion to Hulu, TVE
- Significant boosts in ad-spending on desktop and mobile
What’s Working?
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- Use of ad-based platforms nearly universal
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- Figure 13: Use of traditional television and ad-based online content in past week, November 2016
- Live TV most commonly used format across all ages
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- Figure 14: Use of live television in past week, by age, November 2016
What’s Struggling?
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- TVE not quite there yet . . .
- . . . but usage blossoming among younger adults
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- Figure 15: Use of Hulu and Television Everywhere in past week, by age, November 2016
- Use of Hulu, TVE, linked to more frequent purchasing
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- Figure 16: Use of Hulu and Television Everywhere in past week, by parental status, November 2016
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- Figure 17: Use of Hulu and Television Everywhere in past week, by number of children in the household, November 2016
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- Figure 18: Use of Hulu and Television Everywhere in past week, by household income, November 2016
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- Figure 19: Use of Hulu and Television Everywhere in past week, by race and Hispanic origin, November 2016
What’s Next?
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- Online and mobile gain traction
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- Figure 20: Digital video ad sales, 2011-16
- One in six ad dollars headed toward digital video by 2020
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- Figure 21: Digital video share of total television and digital video ad spending, 2011-21
- Mobile video mainstreams
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- Figure 22: Frequency of viewing video on mobile devices, by type of video, December 2015
The Consumer – What You Need to Know
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- Excessive exposure, poor recall
- Commercial viewing more common than avoidance
- Commercial prompted one in three to buy in past month
- Young men show highest levels of engagement
Exposure
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- Viewers inundated by 50+ commercials daily
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- Figure 23: Number of commercials viewed daily – Mean, November 2016
- Greater exposure leads to more purchasing
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- Figure 24: Number of commercials viewed daily – Mean, by location of residence, November 2016
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- Figure 25: Number of commercials viewed daily – Mean, by Hispanic origin, November 2016
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- Figure 26: Number of commercials viewed daily – Mean, by parental status and number of children, November 2016
Behavior during Commercials
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- The audience is watching
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- Figure 27: Behavior during commercials, November 2016
- Young men most likely to watch
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- Figure 28: Behavior during commercials, by gender and age, November 2016
- High-income groups opt out via DVR
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- Figure 29: Behavior during commercials, by household income, November 2016
- Blacks stay tuned
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- Figure 30: Behavior during commercials, by race and Hispanic origin, November 2016
Response
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- Limited recall the norm
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- Figure 31: Commercial recall, November 2016
- Viral pass-through needs to be incentivized
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- Figure 32: Viral spread of information in commercials, November 2016
- Reminders and introductions work
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- Figure 33: Product introductions and reminders to purchase, November 2016
- Digital pursuit
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- Figure 34: Visits to brand websites and clicks on video overlays, November 2016
- Majority indicate some positive response
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- Figure 35: Positive response to a commercial, by gender and age, November 2016
- Higher-income groups less engaged
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- Figure 36: Positive response to a commercial, by household income and by parental status, November 2016
Purchasing
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- One in three acknowledge a purchase in past month
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- Figure 38: Date of most recent purchase because of a television commercial, November 2016
- Dads with multiple children most likely to be influenced
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- Figure 39: Purchasing in response to a commercial in past month – CHAID – Tree output, November 2016
- Young men softest target
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- Figure 40: Incidence of making a purchase in past week because of a commercial, by gender and age, November 2016
- Figure 41: Number of commercials viewed daily – Mean, by gender and age, November 2016
- Focusing on the mass market
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- Figure 42: Incidence of making a purchase in past week because of a commercial, by household income, November 2016
- Urbanites, Hispanics identify and buy
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- Figure 43: Incidence of making a purchase in past week because of a commercial, by Hispanic origin, November 2016
- Figure 44: Incidence of making a purchase in past week because of a commercial, by location of residence, November 2016
Negative Attitudes to Commercials
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- Only a minority don’t identify, trust, or buy
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- Figure 45: Negative attitudes to commercials, November 2016
- Commercials have more impact on younger shoppers
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- Figure 46: Perception of influence of commercials on purchasing, by age, November 2016
- Over $100Ks claim to be less influenced
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- Figure 47: Perception of influence of commercials on purchasing, by household income, November 2016
- Alienation from characters more common among rural residents
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- Figure 48: Alienation from characters, by location of residence, November 2016
- Hispanics less likely to feel alienated from characters
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- Figure 49: Alienation from characters, by Hispanic origin, November 2016
Positive Attributes in Commercials
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- Music makes memories
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- Figure 50: Attributes of commercials, November 2016
- Younger ages grateful for the sales tip
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- Figure 51: Interest in hearing about sales and discounts, by age, November 2016
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- CHAID analysis methodology
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – Market
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- Figure 52: Total US sales and forecast of market, at inflation-adjusted prices, 2011-21
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Appendix – Consumer
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- Figure 53: Interest in recognizable actors in commercials, by age, November 2016
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- Figure 54: Purchasing – CHAID – Table output, November 2016
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