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Television Advertising - US - February 2017

"Twenty years after the launch of Netflix, and more than a decade since the launch of YouTube, advertisers continue to increase spending on television commercials, with sales estimated at $81 billion in 2016. Growth continues because the television commercial remains the pièce de résistance for product introductions and brand equity, offering the ability to create a cohesive narrative viewed on HD screens."

- Billy Hulkower, Senior Technology Analyst

This report is looking at the following areas:

  • Viewers bombarded by hundreds of commercials weekly
  • Online and mobile gain traction, jeopardizing linear growth
  • DVR far more popular than TVE, cVOD

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Viewers bombarded by hundreds of commercials weekly
            • Figure 1: Number of commercials viewed daily (net of linear and digital) – Mean, by gender and age, November 2016
          • Online and mobile gain traction, jeopardizing linear growth
            • Figure 2: Sales of commercials on digital platforms, 2011-16
          • DVR far more popular than TVE, cVOD
            • Figure 3: Use of ad-free methods of watching video in past week, November 2016
          • The opportunities
            • Focusing on young men
              • Figure 4: Positive response to a commercial, by gender and age, November 2016
            • Reminders and introductions both effective
              • Figure 5: Product introductions and reminders to purchase, November 2016
            • Jingles keep ringing
              • Figure 6: Attractive attributes of commercials, November 2016
            • What it means
            • The Market – What You Need to Know

              • Rise of sVOD endangers linear
                • Cord-shaving to concentrate audiences
                  • 2020: Peak linear sales
                  • Market Size and Forecast

                    • Cyclical market shows growth in even years
                      • Improved measurement a spur to sales
                        • Secular decline ahead
                          • X-factor: DVR vs TVE/cVOD vs sVOD
                            • Figure 7: US television advertising sales and fan chart forecast, at current prices, 2011-21
                            • Figure 8: US sales and forecast of market, at current prices, 2011-21
                        • Market Perspective

                          • Ad-free platforms competitive
                              • Figure 9: Use of ad-free methods of watching video in past week, November 2016
                            • DVR successful in blocking ads
                              • Figure 10: Cognizance of ads during fast-forwarding via DVR, by gender and age, November 2016
                          • Market Factors

                            • Cord-cutting tapers off in favor of cord-shaving
                                • Figure 11: US residential pay TV subscriptions, 2012-15
                              • Improvements in hardware
                                • Figure 12: Sales of 4K TV sets, 2014-2017
                            • Key Viewing Platforms – What You Need to Know

                              • Live viewing still king
                                • Young audiences gaining devotion to Hulu, TVE
                                  • Significant boosts in ad-spending on desktop and mobile
                                  • What’s Working?

                                    • Use of ad-based platforms nearly universal
                                      • Figure 13: Use of traditional television and ad-based online content in past week, November 2016
                                    • Live TV most commonly used format across all ages
                                      • Figure 14: Use of live television in past week, by age, November 2016
                                  • What’s Struggling?

                                    • TVE not quite there yet . . .
                                      • . . . but usage blossoming among younger adults
                                        • Figure 15: Use of Hulu and Television Everywhere in past week, by age, November 2016
                                      • Use of Hulu, TVE, linked to more frequent purchasing
                                        • Figure 16: Use of Hulu and Television Everywhere in past week, by parental status, November 2016
                                        • Figure 17: Use of Hulu and Television Everywhere in past week, by number of children in the household, November 2016
                                        • Figure 18: Use of Hulu and Television Everywhere in past week, by household income, November 2016
                                        • Figure 19: Use of Hulu and Television Everywhere in past week, by race and Hispanic origin, November 2016
                                    • What’s Next?

                                      • Online and mobile gain traction
                                        • Figure 20: Digital video ad sales, 2011-16
                                      • One in six ad dollars headed toward digital video by 2020
                                        • Figure 21: Digital video share of total television and digital video ad spending, 2011-21
                                      • Mobile video mainstreams
                                        • Figure 22: Frequency of viewing video on mobile devices, by type of video, December 2015
                                    • The Consumer – What You Need to Know

                                      • Excessive exposure, poor recall
                                        • Commercial viewing more common than avoidance
                                          • Commercial prompted one in three to buy in past month
                                            • Young men show highest levels of engagement
                                            • Exposure

                                              • Viewers inundated by 50+ commercials daily
                                                • Figure 23: Number of commercials viewed daily – Mean, November 2016
                                              • Greater exposure leads to more purchasing
                                                • Figure 24: Number of commercials viewed daily – Mean, by location of residence, November 2016
                                                • Figure 25: Number of commercials viewed daily – Mean, by Hispanic origin, November 2016
                                                • Figure 26: Number of commercials viewed daily – Mean, by parental status and number of children, November 2016
                                            • Behavior during Commercials

                                              • The audience is watching
                                                • Figure 27: Behavior during commercials, November 2016
                                              • Young men most likely to watch
                                                • Figure 28: Behavior during commercials, by gender and age, November 2016
                                              • High-income groups opt out via DVR
                                                • Figure 29: Behavior during commercials, by household income, November 2016
                                              • Blacks stay tuned
                                                • Figure 30: Behavior during commercials, by race and Hispanic origin, November 2016
                                            • Response

                                              • Limited recall the norm
                                                • Figure 31: Commercial recall, November 2016
                                              • Viral pass-through needs to be incentivized
                                                • Figure 32: Viral spread of information in commercials, November 2016
                                              • Reminders and introductions work
                                                • Figure 33: Product introductions and reminders to purchase, November 2016
                                              • Digital pursuit
                                                • Figure 34: Visits to brand websites and clicks on video overlays, November 2016
                                              • Majority indicate some positive response
                                                • Figure 35: Positive response to a commercial, by gender and age, November 2016
                                              • Higher-income groups less engaged
                                                • Figure 36: Positive response to a commercial, by household income and by parental status, November 2016
                                            • Purchasing

                                              • One in three acknowledge a purchase in past month
                                                • Figure 38: Date of most recent purchase because of a television commercial, November 2016
                                              • Dads with multiple children most likely to be influenced
                                                  • Figure 39: Purchasing in response to a commercial in past month – CHAID – Tree output, November 2016
                                                • Young men softest target
                                                    • Figure 40: Incidence of making a purchase in past week because of a commercial, by gender and age, November 2016
                                                    • Figure 41: Number of commercials viewed daily – Mean, by gender and age, November 2016
                                                  • Focusing on the mass market
                                                    • Figure 42: Incidence of making a purchase in past week because of a commercial, by household income, November 2016
                                                  • Urbanites, Hispanics identify and buy
                                                    • Figure 43: Incidence of making a purchase in past week because of a commercial, by Hispanic origin, November 2016
                                                    • Figure 44: Incidence of making a purchase in past week because of a commercial, by location of residence, November 2016
                                                • Negative Attitudes to Commercials

                                                  • Only a minority don’t identify, trust, or buy
                                                    • Figure 45: Negative attitudes to commercials, November 2016
                                                  • Commercials have more impact on younger shoppers
                                                    • Figure 46: Perception of influence of commercials on purchasing, by age, November 2016
                                                  • Over $100Ks claim to be less influenced
                                                    • Figure 47: Perception of influence of commercials on purchasing, by household income, November 2016
                                                  • Alienation from characters more common among rural residents
                                                    • Figure 48: Alienation from characters, by location of residence, November 2016
                                                  • Hispanics less likely to feel alienated from characters
                                                    • Figure 49: Alienation from characters, by Hispanic origin, November 2016
                                                • Positive Attributes in Commercials

                                                  • Music makes memories
                                                    • Figure 50: Attributes of commercials, November 2016
                                                  • Younger ages grateful for the sales tip
                                                    • Figure 51: Interest in hearing about sales and discounts, by age, November 2016
                                                • Appendix – Data Sources and Abbreviations

                                                  • Data sources
                                                    • Sales data
                                                      • Fan chart forecast
                                                        • Consumer survey data
                                                          • CHAID analysis methodology
                                                            • Abbreviations and terms
                                                              • Abbreviations
                                                                • Terms
                                                                • Appendix – Market

                                                                    • Figure 52: Total US sales and forecast of market, at inflation-adjusted prices, 2011-21
                                                                • Appendix – Consumer

                                                                    • Figure 53: Interest in recognizable actors in commercials, by age, November 2016
                                                                    • Figure 54: Purchasing – CHAID – Table output, November 2016

                                                                Television Advertising - US - February 2017

                                                                US $3,995.00 (Excl.Tax)