Why Chips Ahoy’s linear TV budget is crumbling in the face of new digital options

The feature image is an illustration of a cookie woman.

Chips Ahoy is all but waving bon voyage to its linear television advertising budget. As the 60-year-old, Mondelēz-owned brand looks to better target Gen Z consumers over the last two years, ad spend has shifted almost entirely away from TV spend to social and digital.

“We really want to be focused on the channels where Gen Z are today. So we’re focused on TikTok, Instagram and Twitter to a certain extent,” said Natalie Gadbois, senior brand manager at Chips Ahoy. 

Per Gadbois, it was a data-driven decision, ushered in by cord cutting trends and lagging linear TV viewership seen across the industry. Still, there is some linear TV spend targeting Spanish-speaking audiences to account for the brand’s growing multicultural consumer, she added. (Gadbois declined to give exact ad spend).

“If we really wanted to build brand love, we needed to do that with the younger cohort. And the data indicated that they weren’t watching traditional TV anymore, generally,” she said. She added that a digital-first media strategy is more flexible in terms of media buying, given linear TV ad contract terms, and content creation, given TikTok’s format.

Besides that, the company is investing in experiences, something 69% of shoppers say they prefer over traditional advertising, according to a new report from Reach3 and the Keller Advisory Group. The cookie brand announced a number of activations in celebration of its 60th birthday, including a sweepstakes and chance to attend a Chips Ahoy-themed yacht party.

In 2020, the company went through a strategic overhaul, focusing on engaging younger shoppers to build brand affinity. By 2021, the team started to shift away from television advertising and spend more on digital advertising channels, including TikTok, Instagram, Twitter and connected TV. 

Last year, the Mondelēz-owned brand spent $22,933,040 on media, slightly more than the $22,596,828 spent in 2021, according to Vivvix, a Kantar Company, including paid social data from Pathmatics. 

Increasingly, brands are spending fewer ad dollars on linear television as the cord-cutting trend has yet to lose momentum. In Q1 of 2022, 43% of brand professionals said they weren’t spending any of their marketing dollars on TV, according to Digiday+ Research. That figure increased slightly by Q3 2022 to 48% and then again to 49% in Q1 of this year.

Last summer, Insider Intelligence reported that 2022 would be linear television’s last year as the dominant ad channel in the U.S., expected to account for 57% of video ad spend. That figure is a decline from 62% in 2021 and 71% in 2020, per the report. Meanwhile, connected TV and other digital video, such as video advertising on social media platforms, has vacuumed up ad dollars, expected to account for 7.3% of total media spend this year. That figure is up from 6.1% in 2022.

“Time spent with digital video, including streaming TV, has now officially exceeded time spent with linear TV on a daily basis,” said Charlie Legg, svp media director at Blue Sky Agency, in an emailed statement to Digiday. 

Legg added that brands investing in digital and social-first strategies to target Gen Z are poised for “greater efficiency behind their ad spend and for a greater return on engagement with their message.” This is increasingly becoming a focal point for the industry as economic uncertainty looms, forcing advertisers to scrutinize media budgets more than before.

Especially in a fragmented media landscape riddled with data privacy initiatives, marketers should still diversify their spends, said Cavan Chasan, director of connections at Guru creative agency, in an emailed statement.

Let Adidas circa 2017 be an example. Back then, the company stepped away from TV advertising to quadruple its e-commerce revenues in light of the digital boom and young online shoppers. It was short-lived as the company admitted its shortcomings two years later, over-investing in performance and digital marketing tactics over brand building, according to Marketing Week. 

However, much has changed since 2019, especially as technology has made connected television and other digital marketing offerings more viable in terms of measurement.

“From a deeper consumer engagement post TV ad viewing, connected is quickly proving its ROI in comparison to linear,” Chasan said.

For Chips Ahoy, digital advertising isn’t expected to be the end all be all for the brand’s media budget. Should cord cutters return to linear television and viewership increase, the cookie brand would reconsider its media mix, per Gadbois.

“We’re trying not to be black and white with the decisions that we make. If the consumers are there, we want to make sure that we’re reaching them. It all depends on where they’re at,” she said.

https://digiday.com/?p=496606

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