Traditional Holiday Ads Move Online
Shortly before Hallmark would have traditionally launched its seasonal commercial heart-warmers, the greeting-card giant made a surprising confession: This year, for the first time ever, it would spend nothing on holiday TV ads.
Instead, the struggling keepsakery will go all-digital, spending on cheeky YouTube ads and partnering with bloggers to sing the brand’s praises. It is also paying the photo-sharing app Snapchat to plaster Hallmark’s logo onto family pictures taken beneath America’s big downtown Christmas trees.
Hallmark’s decision to forgo its decades of feel-good marketing was seen by many as another blow against TV. Where television ads are pricey and imprecise in their reach, a growing number of companies say, digital marketing is a cheap laser beam.
But in the holiday selling season, can the Web truly replace old-fashioned tear-jerker TV?
“When’s the last time a banner ad made you cry?” said Brian Wieser, a media analyst for Pivotal Research Group. “If you’re a greeting-card company, it sure better.”
Google and other kings of digital ad space have argued that one of TV’s biggest selling points, its vast and undiscriminating sway, is also its fatal weakness. Spending on search, smartphone, online-video and social-media marketing campaigns has exploded and is expected to overtake TV ad spending next year, data from media researcher Magna Global show.
Companies such as travel-planning site TripAdvisor, which spent $20 million on TV ads in the third quarter of the year, have said they will pause TV ads next year and spend some or all of the ad money elsewhere, hoping to save cash on expensive broadcast ads and follow a shift in customers’ attentions.
Between 2008 and 2015, the typical American’s share of daily media time spent in front of a TV tumbled from 44 percent to 36 percent, while the share spent with a smartphone grew from 3 percent to 24 percent, Nielsen data show.
Katherine Cartwright, a Hallmark spokeswoman, said the company’s shift to digital ads lets it focus on its target market of “millennial moms” in a finer way than a national TV campaign could allow, and with the hopes to go viral.
For the campaign, the company has partnered with Angie Keiser, a Cincinatti blogger who makes dresses out of paper with her 5-year-old daughter, Mayhem.
The company is also riffing off its reputation of advertising ever-so-perfect “Hallmark moments” with comedic Web ads — in one, a perfectionist micromanages her kids’ Christmas-tree decorations — set to air on streaming services such as Hulu, hoping to reach, Cartwright said, the “mom watching Scandal in bed on her phone after the kids fall asleep.”
Hallmark’s turn toward irreverence marks a curious change of tone for a gift shop known more for sappy inspirationals. One ad last year featured a kindly trash man saving a mother’s cherished Christmas ornament, and it ended with them sharing a hug.
Changing viewing habits back up the argument that the small screen has lost shine to one far smaller. Last month, a Google director told the crowd at a London marketing expo that savvy advertisers hoping to best reach young viewers would need to shuffle 24 percent of their TV budgets directly to a more targeted medium: YouTube, which Google acquired in 2006.
But a chorus of analysts argue that the television commercial’s demise at the hands of digital upstarts has been wildly overblown — particularly in the coming weeks, as millions of families gather around the hearth of holiday TV.
Americans still watch traditional TV for roughly five hours every day, twice the time they spend on their computer or smartphone, Nielsen data show.
The networks’ feared mass expansion of “cord-cutters,” who slashed their cable bill, and “cord-nevers,” who ignored them altogether, has yet to fully materialize: The number of American households with Internet but no TV service grew 12 percent between 2013 and 2015, according to media researcher SNL Kagan- but that’s only 3 percent of the households tracked by Nielsen, recent data show.
“We’re seeing the cresting of the hype that digital will kill off TV,” said Jim Nail, principal analyst for Forrester Research. “These kinds of social components can add an extra bit of juice, but very rarely can they stand on their own. … This is Hallmark, this is mainstream America, and these are real people who still consume a lot of regular TV.”
TV-industry stocks have been roiled in recent months over fears of accelerating cord-cutting, with weak ad sales damaging the revenue of networks such as Comedy Central-owning giant Viacom.
But advertising spending has actually jumped in the most recent quarter for broadcast and cable titans including NBCUniversal, 21st Century Fox, Disney, AMC Networks and Discovery Communications. At CBS, ad revenue jumped 8 percent in the most recent quarter when sized up against last year.
Network chief executive Les Moonves told analysts in a call this month that “advertising is coming back in a big way.”
The fear that viewers with digital video recorders, or DVRs, will skip past all those pricey, sentimental commercials has also proved to be exaggerated, the networks argue. CBS’s chief research officer, David Poltrack, says their ranks are slimming, mostly because viewers are “too busy on their phones to fast-forward through the ads.”
The holiday draw of social media poses a growing threat to traditional television: Snapchat said this month its daily video views have tripled since May, to 6 billion views a day. Jefferies analyst Brian Pitz wrote in a recent note to investors that Facebook, with its 8 billion daily views, also “looks well positioned to capture” an increasing portion of TV commercial cash.
Hallmark, which also owns its namesake cable channel and Crayola, has seen its cards, gifts and books business struggle because of online competitors and the rise of low- to no-profit digital greetings. In five years, the company has cut its worldwide workforce in half, to about 10,500 employees.
With its shift to the Web, Hallmark has joined a growing wave of companies who see cheaper digital ad budgets as a convenient way to cut costs. Cartwright, the Hallmark spokeswoman, would not share the privately held company’s ad budget, but said “it wasn’t a low-cost investment.”
“It’s much more than selling one single ornament,” Cartwright said. “It’s a much longer-term investment. We want to be what people think of when they think of these memories.”
But for companies with budgets big enough to handle a wide-scale ad blitz, TV is still the star attraction. Last year, Wieser said, Apple spent 80 percent of its $800 million U.S. ad budget on TV commercials — including one sappy holiday spot in which a girl gifts her grandmother an emotional memory with the help of an iPad Mini.
And over the last week, Wal-Mart has spent about $13 million on more than 3,600 airings of an ad featuring a dad working hard to order his son a Yoda doll.
“Television is unique, in all forms of advertising, in being able to deliver that emotional power,” said Nail, the Forrester analyst. “I don’t believe human nature has changed so much that those kinds of classic impacts of marketing are irrelevant.”