Traditional TV, ‘neuromarketing,’ to play key roles in advertising in 2012: Deloitte

OTTAWA—Traditional television advertising and the use of Functional Magnetic Resonance Imaging (FMRI) are new and potentially “more effective” advertising strategies, Deloitte and Touche LLP’s TMT Predictions 2012 report says. “Traditional TV advertising is potentially more effective than strictly targeted advertising since it reaches a larger number of influencers as well as decision makers,” Deloitte said in its 2012 predictions report. “There are actually very few TV ads that will never influence what we purchase, either today or in the future.” Deloitte said one of TV’s most important roles is serving the launch of new products and brands. The traditional advertising medium is an asset to companies that don’t always know who their target audience is, the firm said. Unlike targeted advertising, which Deloitte said delivers a specific message to an individual, TV can offer a more general “shot gun” approach. “When people watch television, they are generally passive, and a variety of messages tend to work well in this context,” the report said. The firm said at an event in Ottawa Friday that the overall advertising sector will grow by five per cent globally in 2012 and that online brand spending is expected to grow by 50 per cent. The company discussed the emergence of a new market research medium called “neuromarketing,” which looks into the minds of consumers through FMRI scans as they watch videos or try products. Duncan Stewart, director of research for technology, media and telecom at Deloitte Canada said an FMRI is similar to a medical MRI, but the machine is capable of measuring how “activity in certain regions of the brain correlates with specific emotions and types of thinking,” which is useful to measure while watching test advertising. Deloitte said North American marketers are now using neuromarketing to construct ad campaigns, alter packaging and even change the flavours of their products. The firm added that FMRI research is considered to be “more reliable” than focus-group testing, where individuals are not honest about what they truly think. Deloitte cautioned that television advertising should be combined with online advertising. Online brand advertising will reach $20 billion this year, Deloitte said, as marketers acknowledge the value of online media to build the long-term value of brands and turn their efforts to tailoring ads for emerging Internet video and social media platforms. Stewart said at the event Friday that global TV ad spending totaled nearly $245 billion in 2011. He added that online display advertising was up by 100 per cent for Google Inc. year over year. He said search advertising still makes up the bulk of Google’s revenues, “but display is going really rapidly for Google and that’s not even counting YouTube .” He estimated that spending on advertising via YouTube was “a couple billion” in 2011. “They’re a one-ish per cent of the market,” he said. “But a lot of very successful viral video campaigns have been very successful on YouTube and they haven’t been on TV.” Deloitte noted that, despite the emergence of sophisticated on-the-go devices such as smartphones and tablets, Canadian consumers will continue to view television content in the traditional linear way. “Ninety five per cent of all television in 2012 will be consumed within 24 hours of being broadcast,” Stewart said. Traditional TV viewing habits remain “virtually unchanged from a decade ago,” he said, despite the emergence of devices that allow viewers to record programs watch them whenever they want or wherever they are. Stewart said Deloitte’s TV consumption prediction for 2012, as part of its annual TMT Predictions, is based on data from Nielsen showing that minimal amounts of TV content were consumed by Americans on other mediums in 2011. The Nielsen data for 2011 showed that Internet TV consumption totalled four hours per month, while time shifted TV consumption totaled 2:21 minutes. Stewart said the time dedicated to Internet video consumption was 27 minutes per month. According to Nielsen, Mobile consumption came in last with 0.07 minutes per month. Stewart said social media networks have also enhanced the traditional schedule’s appeal through online discussion. “It may be PVR or DVR, or on a tablet, but that idea of simultaneity is still there,” he said. “You can’t talk about a show with a friend, or at the office in the morning, if you haven’t seen it.” Deloitte noted that consistent, traditional TV viewing habits are also causing broadcasters to be more creative in showing advertisers the advantages of the standard TV schedule. In terms of television consumption on other mediums, Deloitte predicted that five per cent of smartphone owners and one-in-10 tablet owners will use their devices at least once per month to catch up on TV viewing during their commutes. “Globally, this could represent an additional five billion hours of television viewing for the year,” Deloitte said in its predictions release. Stewart noted that although commuters are expected to watch TV on these devices, this isn’t happening as much globally because the streaming quality on 3G is not ideal and consumers are concerned about data usage. Deloitte said demand for data around the world is growing at a rate of more than 30 per cent per year. Stewart said that, in 2012, more than 100 million households will have broadband data caps. He added that although some countries still have “all-you-can-eat” data plans, “the rest of the world is moving towards the Canadian model.” He said that Deloitte is starting to see people using wireless devices as portable PVRs. “They are downloading content the night before and then watching it on their device on their commute,” Stewart said. He added that Deloitte expects this type of viewing to add an additional 30 billion hours of TV viewing per year. The firm also predicted that, globally, tablets will total “just over” 100 million units by the end of 2012 and account for three billion hours of usage per month. Smartphones, Deloitte noted, would total one billion units and account for 60 billion hours of usage per month. Stewart added that PCs in 2012 would total 1.5 billion units and account for 300 billion hours of usage per month on a global scale. “Seventy five to 85 per cent of our content will still be accessed through a PC,” he said. In terms of the rise of the “virtual assistant” in 2011, such as Apple Inc.’s Siri technology, Stewart said it could become significant for television in later years as its functionality could one day replace the TV remote. Stewart said Deloitte expects the demand for tech, telecom and other media products to continue to increase despite a looming European economic recession. “People might say, ‘I’m not going to buy a new car this year, but I can go and buy a couple of tablets for my family,’” Stewart said. “It’s an affordable luxury.” He noted that, in North America, a car costs an individual $10 an hour per year while a tablet costs $0.40 an hour per year. “Regardless of Europe, 2012 is going to be a good year,” he said. dgrenier@thewirereport.ca

Traditional TV, ‘neuromarketing,’ to play key roles in advertising in 2012: Deloitte

Broadcast | January 21, 2012

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