Cable is expensive, and TV viewers are increasingly canceling traditional cable subscriptions in favor of “skinny bundles” like Sling TV or streaming services such as Hulu. Many TV networks are also launching streaming services to supplement their traditional business models, such as NBC Universal’s Peacock streaming service or the WatchESPN app. While there is a lot of analysis about what this trend means for the cable TV industry, advertising is also affected dramatically.
People who cancel their cable packages obviously do not see any traditional TV spots. Worse, many cable companies allow customers to fast-forward any aspects of their programs they do not wish to watch (like commercials) to keep them as customers. As the number of pay-TV households continues to dwindle, advertisers are looking for new ways to reach their audience.
Luckily, many of those streaming options TV viewers are turning to also offer dynamic options for marketers. Please continue reading to find out more about Connected TV advertising.
What is Connected TV?
Connected TV may be defined as any form of watching television that does not involve a traditional set-top box or satellite dish. Alternatively, this technology can be called “over-the-top (OTT).” Consumers can watch CTV content on a variety of devices, including smartphones, tablets, computers, gaming consoles, streaming players, and Smart TVs, so why not meet them where they are?
Experts predict that Connected TV (or CTV) advertising will become more popular in the future, making right now a great time to get in on the ground floor. While traditional ads can be skipped at an alarmingly high rate, CTV ads generally cannot be. Better yet, CTV ad breaks are usually too short for viewers to really leave their seats without missing part of their show, giving advertisers a captive audience that traditional TV ads no longer can. OTT advertising also avoids the high upfront costs associated with traditional TV ads, as there are generally no monthly minimums to meet.
Why should CTV advertising be a part of my marketing strategy?
Cable advocates will tell you that ads on Hulu and similar streaming services don’t reach the same audience that cable ads do, inadvertently revealing one of the biggest problems with the cable TV model. With traditional ads, you pick a program that your target audience is likely to watch and pay a rate based on total viewership, with no way of knowing if it’s the right audience. Cable wants you to think in terms of total viewership because it allows them to charge more per ad placement, but it doesn’t help you communicate your message to your target audience.
It’s true that OTT ads reach a smaller audience by sheer volume, but they can be targeted specifically to the customers you want. You’re getting at least as many people who might be interested in your product, and you’re not paying for any disengaged viewers. Doesn’t that sound perfect for your marketing needs?
How does that work?
Cable ads are sold by a specific DMA, or Designated Metropolitan Area. If you’re looking for a smaller or larger reach, there’s no flexibility to adjust the scope of your campaign. In contrast, digital ads can be served to a specific ZIP code, city, DMA, or entire state, ensuring that everybody who sees your ad is a potential customer.
Furthermore, online ads can be delivered to people who have already expressed interest in what you are selling. For example, it’s unlikely that any commercial could convince somebody who doesn’t want a new car to purchase one. If you sell vehicles, your ad will get the best response if it is served exclusively to consumers who have been researching automotive prices, comparing models, or otherwise indicating an interest in a new car.
Digital advertising agencies can also offer re-targeting capabilities, meaning that consumers who see one ad to completion receive follow-up advertisements online and in their favorite apps to remind them of the value you can provide. This helps to ensure that you remain at the forefront of a lead’s mind, helping to improve your campaign’s conversion rate.
Is it easy to measure the success of an OTT advertising campaign?
TV networks can tell you approximately how many people were watching their channel when your ad aired, but they can’t differentiate between engaged and disinterested viewers or help you figure out how many of those viewers were converted into customers. CTV ads offer much more transparent reporting, providing real-time data on what device leads are seeing your ad on, how many total people saw it, and what you could improve to boost conversions.
For instance, you might want to optimize your ad for mobile if your audience is typically seeing it on smartphones. If your data reveals that customers are visiting your website but not purchasing anything, you know you need to work on your sales funnel. Traditional TV cannot provide a comparable level of guidance.
It can be tough to engage with your product or service’s target audience today, but it’s not impossible. Streaming advertising can offer superior conversion rates and improved data collection at a more affordable price point relative to cable, so why not give it a shot today?