Digital, TV integrated ad strategies suffer from budget disconnects

DetailsMichelle Clancy | 11 March 2015

More than half (54%) of CMOs in a recent survey say that they use digital video to supplement TV as an advertising strategy — but budgets aren't aligning.

The survey from the CMO Club and Simulmedia has found that in the past three years, digital spend has gone from 10% of advertising budgets to 24%, and is forecasted to rise to 36% in the next three years.

"For over a decade, marketers have attempted to find the most efficient balance between TV and digital video spend," said Pete Krainik, founder of the CMO Club. "Our report shows that it's not TV vs. digital video, it's about TV and digital video, both today and for the foreseeable future."

That said, only 31% align their budgets for TV and digital advertising spend. This separation leads to a disconnect between the value of each medium, as just over half (52%) claim that they have different expectations across the two platforms. In addition, three quarters of CMOs say that they measure reach the same way for both TV and digital video and but only one-third see Nielsen as the ongoing foundation of their reach metrics.

"CMOs say they want a holistic strategy, but neither plan, measure or budget for it as one thing," said David Cooperstein, CMO at Simulmedia and author of the report.

The interest in digital video is just now gaining noticeable traction as budgets have started to grow. In the US, digital video advertising expenditures are exploding: figures from eMarketer show that digital video ad spending is estimated at $6 billion this year, growing around 42% annually.

However, the actual dollars spent in TV still greatly trumps digital video. TV advertising dollars in the US were approximately $76 billion in 2014 and still growing just over 3% annually. While both will continue to grow, TV will continue to add more raw dollars of advertising than digital video will, particularly during pivotal political and Olympics years.

"Digital depth cannot match TV's breadth. Nor should it. Conversely, TV has not historically been as measurable or personalised, so it cannot perform the magic that digital delivers. In that very unique way, TV and digital do not compete, they complement. The winning combination is the joint approach. TV's reach and digital's depth make them amazing partners in the marketing mix," said Cooperstein.