By: Walt Horstman
As audiences continue to migrate their television and movie watching to streaming platforms, all advertisers are faced with an inflection point where they must adapt to the growing world of streaming. All advertisers, including smaller direct-to-consumer advertisers, need to reach their target audiences; some of which have been historically difficult to find on linear TV.
Linear TV has long been the place where advertisers find vast and rapid audience reach, driven by substantial viewership across the US. But as consumers evaluate their entertainment offerings, advertisers and their agencies have to transition away from solely relying on linear TV advertising. Tentpole events like the Super Bowl and the holiday season will continue to reign supreme, pulling in premium advertisers. Nevertheless, when considering ongoing marketing initiatives, advertisers must adapt their mindset and fully embrace the opportunities presented by CTV advertising for almost any brand.
The CTV turning point
CTV advertising isn’t new to the industry, nor has it been slow to achieve scale. Advertisers have long known about the potential of CTV advertising, but changes in an ecosystem like this don’t happen overnight. The early days of streaming were centered around premium subscription video on demand (SVOD) from the likes of HBO and Netflix – and have since evolved. Streaming has now reached its maturity with a wide variety of ad-supported channels and services, opening the floodgates to advertisers. The increase in quality content across streaming – and sheer popularity of it – has shed light on why CTV is the next frontier for all types of advertisers.
No longer a new model on the market, CTV advertising has been tested and become a foundational product for many direct-to-consumer brands. The ability of CTV to provide precise audience targeting has improved the efficiency and effectiveness of any advertiser’s marketing investment, showing that this market is for the taking from just about any brand.
The great advertising equalizer
As CTV has expanded in the last decade or so, the advertising industry has evolved to a stage where brands possess a clear understanding of the specific audience they need to reach with their marketing. Through CTV campaigns, brands can clearly target their key audiences, ensuring that each impression is delivered to the right individual or household. Compared to linear television where the goal is to reach as many people as possible – with less precision on audience targeting – CTV ensures that advertisements are reaching the right people, at the right time.
Take the case of a direct-to-consumer education services company that traditionally used linear TV for its marketing. The case study below demonstrates that utilizing CTV’s audience segmentation capabilities enabled the company to reach 42% more households compared to the linear TV campaign alone. This type of incremental reach gain unlocks a world of potential for advertisers and agencies, especially as audiences continue to fragment.
Targeted CTV advertising also allows for a stronger return on ad spend. In the case of the education services company, the CTV campaign cost-per-registration was 57% lower than the linear TV benchmark. The return on ad spend helps advertisers create more cost-effective media campaigns, in turn lowering the barrier to entry to launch a CTV campaign and opening the door to even more brands.
As a result, the entire video advertising system has become more accessible and inclusive. Historically, linear TV advertising was primarily made up of large, national advertising brands. Whereas since CTV has taken on more of the characteristics of digital, smaller and newer brands are able to run agile campaigns via streaming. CTV campaigns give advertisers and agencies the capability to tailor campaigns once they’ve already started and optimize them along the way. This type of flexibility gives brands more power in the campaigns they create, helping them achieve their return-on-investment goals.
A more predictive future
As more brands take advantage of CTV in their advertising campaigns, consumers benefit. Rather than perceiving advertisements as interruptive and disconnected from their interests, consumers will increasingly view CTV campaigns as anticipatory and akin to a consumer-driven experience. Consumers will be made aware of products that they didn’t know existed and are relevant to their needs, wants and desires.
This predictive nature also lays the groundwork for long-term brand building. Taking the example of a luxury car brand; the brand needs to start building aspiration with its customer base long before the consumer is at the point where they can buy that type of car. A Gen Zer watching the brand’s commercial on Pluto may not be heading to the brand’s website to configure a new model, but they’ll start developing an aspiration for the cars. Through CTV campaigns’ audience segmentation, the luxury car brand can identify those who are likely to become future customers long before they make the purchase and start evangelizing with them early on.
With AI powered tools becoming more prevalent in all industries, there’s potential for the predictiveness of CTV campaigns to become even more powerful. Advertisers and agencies already have the ability in media planning to accurately predict what the consumer response to a particular CTV campaign strategy will be, optimizing the advertisement before the campaign launches. These types of advancements will continue to level the playing field, bringing more democracy to the advertising ecosystem and improving the effectiveness of CTV advertising even further.