The Shift from TV Budgets to Digital Video Advertising

by Mike Tyler | October 27, 2014

If someone yells out that television is dead once more, we’re going to shake our heads at them. Television isn’t dead, that’s being untruthful and overly dramatic. As of 2013, 62% of the major advertising industry budget was spent on television.

And according to this chart we found on the internet, television advertising is still the very best at advertising.

So to those who proclaimed the death of television, hold on and ease up on the hyperbole. You’re on the right track but what you’re saying is deceiving. The truth is this:

There is a growing shift from money allocated to television advertising to online advertising.

That’s it. No industry is dead, or dying even. There are just new players in the market (digital video advertising) and the advertising industry as a whole is learning to rebalance and readjust.

As long as the Superbowl and American Idol and Storage Wars is watched on television, television advertising will do fine. Not saying it will stay forever, but we’re still a long way from the death of television.

However… all that said, there IS a shift in power and it is coming at the expense of television video budget.

In fact, on average, video buyer budget for online advertising has gone up 50% in 2014 compared to 20% in 2013. That’s not just growth, that’s really fast growth.

According to more stats, 39% of this increased budget came from the pool of money dedicated to television. Buyer budgets are going up and more people are buying digital video advertising.

If you ask the next question of WHY, the answer is also very simple:
Because these advertisers have seen that they are getting better ROI.

And why to that?

Well, things like more direct targeting, better tracking, and supposedly better conversions are the mantra of modern video advertisers. Simply put, online video ads deliver better results for less money.

What does this all really mean?

Well, despite the shift in money, in terms of actual dollars, television budget is still going up. It’s just that video is going even faster. People are saying that one is better than the other, the other is better than the first, and it goes on and on. However, on our expert judgment, it’s not technically a war between the two.

Both are good in the sense that they have distinct advantages. This budget shift is a re-balancing act due to a very interesting new technology but not the New Age of Advertising. I say decide what you want and then see which one works best for you.

The rule of thumb is this:

Volume (higher budget) = Television

Specific demographic (lower budget) = Online


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