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TV budgets shift online

News, 11 March 2016

NEW YORK: Some 40% of marketers are shifting funds from television to online, with Facebook and Google likely to be among the main beneficiaries of this trend, according to a study.

RBC Capital Markets, the investment bank, polled 2,000 advertising executives in February 2016 regarding their attitudes and strategies.

And 40% of contributors categorised television as a "source of funds" for digital spending, measured against 37% in September 2015 and the 25% recorded in both February 2015 and June 2014.

"The trend of pulling ad dollars from television seems to have meaningfully increased," Mark Mahaney, an RBC analyst, wrote in the report.

"We found that most of a marketer's online spend is, in fact, coming from offline channels, the biggest sources of which are print and television."

Fully 57% of respondents now commit over 20% of their budgets to new media, compared with 49% in the organisation's last two polls. And for 23% of participants, digital today takes more than 50% of expenditure.

Looking ahead, an 82% majority planned to boost their online spend in the next year, suggesting the growth of this channel is a "strong secular investment trend", Mahaney argued.

"Clearly, online has become a crucial marketing channel and is continuing to gain importance – a strong secular investment trend, in our view," he added.

More specifically, a 62% share of interviewees expected to increase their outlay on Facebook, versus 54% for Facebook and 32% for Twitter.

Google led the pack when executives were asked to rank the leading digital platforms in terms of return on investment, ahead of Facebook, YouTube, Twitter, LinkedIn, Yahoo and AOL.

Twitter, the microblogging property, was the sole member of that group to have witnessed a decline in performance in this area since RBC's previous survey.

"We also asked marketers about their perceptions of the changes to ROI on each platform over the past six months," Mahaney wrote.

"Facebook saw, by a large margin, the greatest improvement, with 59% of marketers seeing 'dramatically' or 'somewhat' improved ROI, while Google, YouTube and Twitter had 43%, 39% and 28% of marketers responding positively.

"We see Facebook as making strides ahead in improving its ROI for marketers, likely through better targeting and attribution (the importance of measurability has been a consistent theme we have increasingly heard at industry events)."

Data sourced from Barron's, Investor's Business Daily; additional content by Warc staff