Analyst Omar Sheikh of Credit Suisse said in a new report that he has “increased confidence” that advanced advertising will help networks grow domestic ad revenues “faster than in recent years and faster than investors currently expect.”
What is advanced TV advertising? The planning/buying of television ads against a specific target (auto intenders, quick service restaurant customers, etc.) and optimized to drive business outcomes (sales, etc.). This is in contrast to traditional advertising which is targeted to an age/gender demo (adults 35+ etc.) and optimized for reach/frequency.
Previously on SOTS. Unpacking Omar Sheikh’s $100B Call On Future Of Data-Targeted TV Ads
Quote from Omar Sheikh — Analyst @ Credit Suisse.
“Investors continue to regard U.S TV advertising as a structurally declining business, driven by erosion in viewing and competition from the growing reach of digital platforms,” Sheikh said. “In our view, if the TV industry can combine its reach with greater relevance by using technology to improve targeting, the medium will be well-placed to grow its share of the marketing mix over time. This will particularly be driven by below-the-line items, including direct mail and telephone marketing, which account for more than $100 billion of spend today.”
Bottom line. Advertising is about driving business results (customers, votes, etc.) and companies are adopting advanced TV advertising because they are getting a higher return on their ad spend.