A new study by two units of giant media buyer IPG Mediabrands takes a closer look at the growing number of consumers who watch little or no traditional linear TV and finds that many of them are older and more affluent than previously thought.
The report, from Magna and IPG Media Lab, is entitled “Reaching the ‘Un-Reachable.’” It states that the need to connect with these consumers is more urgent than previously thought, and that a key way is through, non-linear forms of video.
“Linear TV may be declining but video consumption is as strong as ever,” said David Cohen, president, North America, of Mediabrands’ Magna unit. “There are no ‘unreachables’…rather there are device-agnostic streamers with deep pockets who watch just as much video as linear TV viewers and are receptive to relevant, targeted video ads. This segment is growing and it’s crucial for marketers to gain traction with them.”
Magna has been relatively aggressive about moving its clients marketing dollars from traditional TV to online video platforms including YouTube.
Kara Manatt, senior VP, intelligence solutions & strategy for Magna Global, says the new study validates the decision to shift dollars to digital video.
“Advertisers with “older targets and higher income targets are having to reconsider and start thinking about people who are shifting away from linear TV more than they used to,” Manatt said. “Understanding that the shift is happening among a broader audiences is a big part of the study, and certainly will change the way we look at buying.”
What can linear TV networks do to stanch the flow of marketing dollars to online video?
“I think they’re doing things to adapt to the changes. Premium ad pods. Less ad loads," said Manatt. "These are things that they’re doing to help compensate for the shift among viewers.”
Technology has reshaped the way people watch TV.
“The reason we wanted to do this study is because there were a whole bunch of assumptions about people who are not watching linear TV or just watching a little bit of linear TV that was probably based in some truth a long time ago, but because things are changing so quickly, people have just held on to some of those assumptions and they’re no longer true,” Manatt said.
One of the report’s key findings is that viewers no longer differentiate between traditional linear networks and online video. For the most part, consumer consider almost any form of video to be television. Even with short-form video, 71% of those surveyed believed that was television.
While that’s how video is increasingly consumed, it’s not the way it is bought and sold, so Mediabrands had to come up with a definition, so it called shows on broadcast and cable linear and everything else non-linear.
With that definition, the study segmented consumers into non-linear viewers (15%), light linear viewers (29%), moderate linear viewers (28%) and heavy linear viewers (28%).
Mediabrands says the study shatters the myth that those shifting away from linear TV are mostly the young, without purchasing power.
The study found that half of light linear TV viewers and 40% of non-linear TV viewers are generation X (age 38 to 53) or older. The light linear viewers had the highest proportion of households with incomes of $100,000 or more.
According to the study, consumers weren’t leaving traditional pay-TV just because of the cost. Some of those cutting the cord had very high incomes, making it unlikely that the price tag alone was the reason for the decision.
Even in the Mediabrands study, price showed up as a top reason for ditching linear TV. But Manatt added that “when consumers give you more personal feedback, it’s not just expense being the issue. It’s expense for what you get. It’s really a value exchange.”
The study also looked at why consumer were turning the Netflix and YouTube.
Netflix was seen as a good value and its subscribers said it has shows it can’t get elsewhere. Only 11% cited the lack of commercials as the reason why they watched Netflix.
Consumers said they liked YouTube because “there’s always something new” on the platform and “I know I’ll find the video I’m looking for.”
Another key finding was that non-linear TV viewers, light linear TV viewer and moderate linear TV viewers all spend roughly the same number of hours per week with media. Heavy linear TV viewers consumed upwards of 50% more media than the other groups. When it comes to video, those who don’t watch linear TV, watch just as much as those who do watch linear TV--they’re just watching more digital video.
“There’s no such thing as a non-video viewer,” was one of the report’s conclusions. On top of that, the report found that “it’s clear that digital video is persuasive for all types of viewers.”
According to the survey those who don’t watch linear TV like ads that tell a good story, ads that don’t interfere with their TV experience, short ads and entertaining ads.
Mediabrands found that those shorter ads are effective with non-linear TV viewers.
“The so-called ‘unreachable” can be reached through digital video. We know they are still watching video--it’s just streamed,” the report concludes.
“While digital video can be effective for all TV segments, those opting out of linear TV have unique ad preference, such as shorter ads,” the report said.”Advertisers should be sensitive to these preferences and continue to learn about motivations behind media usage shifts as they continue.”