Thursday, March 7, 2013

Should advertisers pull TV budget because of cord cutting?

A constant worry that advertisers deal with is how an audience utilizes media. Are some media dying? Are some growing ahead of others? What makes the most sense for the target audience? Part of our job is to constantly be immersed in the latest research.

One of the newer worries for advertisers is the new trend of “cord-cutting” TV, which is when people stop paying for television services like cable or dish and go online for content. According to a new report by PwC on cord cutting, this is not a phenomenon that should cause advertisers to pull out of TV entirely.

MediaPost reports that while people have been cutting the cord, downgrading subscriptions, or simply not subscribing, the impact of this to pay TV will be relatively small over the next five years.

Television industry leaders stand by the fact that TV advertising still has a measured 37% of influence over adults 18+. In comparison, newspapers have about 11%, Internet 6%, and mobile 4% influence for the same target audience.

It’s estimated that because of the increasing viewership of online TV content, traditional television viewership will see a .9% decline every year through 2017.

Overall, while this is a trend advertisers should keep track of, it is not a good enough reason to encourage pulling all TV ad dollars out of the market. 

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