There is quite a stir in the market now that RTL has announced what it will do with the prices for BrandDeli. The price increase is substantial and of course we as an agency will do everything we can to minimize the effects for our clients. But this price increase also shows that advertisers need to look at the digital domain at an accelerated pace.
"Sometime in 2020, online video may well be the 'main medium' in an AV campaign"
TV is still the 'main medium'
In 2019, TV is still dominant: despite a decline in viewing time, TV can still reach a lot of people. Moreover, TV is a lot cheaper than online video. If we calculate everything back to CPM (cost per mille), TV with CPM of €10 is twice as cheap as online video (in both cases, of course, depending on type of purchase). So TV is the "main medium," online video is used to increase reach.
The question I keep getting back is when online video will overtake TV as the main AV channel to reach a wide audience. This has to do with two things: the reach of an online video campaign must come close to that of a decent TV flight. For this, online video needs to become less fragmented.
When to generate 1 million views you need 10 channels, it is difficult to run a visible campaign. In addition, online video needs to become cheaper to compete with TV. My prediction at the end of 2018 was that sometime in 2020, online video could well be the "main medium" in an AV campaign aimed at a broad audience. With this price increase, that could be sooner.
Branddeli price hike means TV is no longer the 'main medium'
However, with RTL's fresh and unexpectedly large price increase, things may be moving faster. The CPM of TV will be so high that online will become a full-fledged alternative in terms of price. Thereby, we see a big increase in the reach of online video campaigns from the end of 2018. This is partly due to the fact that a limited number of Youtubers and videos are realizing a lot of views in a short period of time.
Whereas Gangnam Style by rapper PSY was the most watched video ever for five years, in the past two years three videos have already broken that record. Online video is thus starting to resemble TV where "ratings guns" generate the bulk of views, and that does make building reach a lot easier.
TV continues to exist thanks to Mies Bouwman
I believe TV will definitely continue to exist. Actually, TV has been a social medium since Mies Bouwman and it will continue to fulfill that role with live content. For everything else, VOD (video on demand) and online video is a better alternative for viewers. Therefore, it will not be long before TV and online video are equivalent for campaigning.
This is a column by Rutger Mackenbach - Director Stroom