The proliferation of digital has led to shrinking budgets in the traditional space such as TV. According to Zenith’s Advertising Expenditure Forecasts, traditional TV ad revenues to shrink annually from 2019 to 2021, falling from US$184 billion to US$180 billion in 2021. Interestingly however, while everyone is turning towards digital, four companies – Facebook, Amazon, Netflix and Google – also known as FANG on Wall Street, increased their spending by 70% to US$1.6 billion last year in the US.
Astro’s CEO Henry Tan said during the Malaysian Media Awards and Conference organised by the Media Specialists Association titled “Game Changers”, that the issue of the shift in budgets does not lie with TV itself but the way the medium is being measured. According to Tan, “old, archaic methods” are still being used to measure TV. On the other hand, digital allows companies to obtain live data, enabling them to know who exactly is being engaged. He explained:
“Digital advertising has far more information, is far more fact-based and sounds more intelligent and accountable. Therefore, it is thought of as being more effective.”
However, according to him, every piece of research including the FANGs’ behaviour, says that TV is still the most persuasive medium of all ad behaviours.
Despite the rise of digital, the popularity of TV has not declined. Instead, Tan said digital “has accelerated and promoted TV’s popularity”. What has changed, however, is that consumers no longer watch TV in a linear manner but instead, are watching it online or on the go on their mobile phones and tablets, for example.
“Again, the measurement tools available in our industry today do not account for all of that. While the progress of technology has offered consumers the flexibility of watching TV when and where they want, the measurement has not caught up,” Tan said. He added that when companies try to please consumers and offer them more flexibility, they end up being “penalised by the research”.
For example, if a consumer watches TV on demand on their mobile phones instead of linear TV, such behaviour is not included in industry research. This is the same case for radio, with consumers listening to radio on the go not being tracked in research studies, Tan explained.
As such, he urged companies to analyse what exactly they are buying into – whether it is effectiveness or measurement of TV. He added that if the measurement is flawed, industry players should collaborate to change it as a whole as there is no need to change the medium if it is effective and persuasive.
Tan also pointed out the issue of media research being siloed into TV, radio and digital, using different measurements and currency. “This is absolutely ridiculous. It’s the same consumer but research is done in silos. It’s as if the people listening to radio are different from the ones watching TV. If they are the same consumer base, why is the research carried out differently?” Tan said.
Besides siloed media research, another piece of information that is absent in today’s industry is the cross media consumption pattern, Tan said. He explained that companies are unable to find out the behaviour of consumers across the different types of media they consume.
To be true game changers, Tan said the industry needs to work together collectively and come up with a standard measurement for all mediums. According to him, such a move would be “revolutionary” because everyone is talking about it but nobody is moving this agenda forward. Tan added that a standard measurement will also offer clarity and transparency. He also explained that “not everything new is good and not everything old is bad”. Tan added:
“Be smart. Get the best of both worlds, don’t follow blindly but instead think about things. The most important thing is that the industry must work together to change the game.”
Are Malaysian brands ready for addressable TV?
Addressable TV is one area that allows brands to deliver targeted advertising on TVs based on the household content consumption. It has the ability to show targeted ads to different households and reach more specific audiences with better creative flexibility.
While it be an interesting way of offering personalised advertisements to consumers, Tan said addressable advertising matters to certain brands not all. He explained that for companies selling basic common denominators such as shampoo, for example, addressable TV would not make sense since they are trying to reach the masses. On the other hand, addressable advertising would make sense for companies in the luxury sectors. He added:
“This is what I mean about being smart. Addressable TV is great but if you are a brand that’s supposed to be marketing to the masses, why bother subcategorising?”
“There is a rule in place for different solutions. You cannot take one solution and apply it across the board, that would be wrong. So companies have to think about what is relevant to their brands and services,” Tan explained.
Separately, the local entertainment scene has come a long way, he added. Tan recounted the time when Malaysian movies in particular were “struggling” to maintain box office sales. According to him, it used to be big news when a movie amassed RM4 million in box office. Also, in 2017, local movies only contributed 5% of the total box office nationwide, Tan said.
However, things changed in 2018 when three to four Malaysian movies crossed the RM30 million box office mark, which is “something we have never seen before in history”, Tan said. He added that the contribution of local movies to nationwide box office increased to 15% within a year. “This tells you that there is an interest in local entertainment. That’s really exciting to me because all of us are working hard together to champion and promote Malaysian content,” he added.