Connected TV has been growing in popularity over the past few years, but during the COVID-19 epidemic, the number of consumers streaming online content has surpassed previous records. This increase in viewership allows marketers a new opportunity to reach a larger audience and implement sophisticated targeting strategies for digital campaigns.
Consumer Behavior Shifting to Different Video Streaming Vehicles
Due to the stay-at-home orders, it comes to no surprise that with more time on our hands, we seek new platforms for entertainment to ease the monotony of our new, quarantined lifestyles. With the increase in demand for digital content, more and more households are converting to video streaming subscriptions and investing in Connected TV (CTV) devices like Apple TV and Roku. These connected devices provide regular televisions with internet access to stream ‘Over-The-Top’, or OTT, video content through providers like Netflix, Hulu, Youtube Tv, and more. OTT is video content available on the internet to be streamed on CTV devices and other internet-connected devices such as laptops, smartphones, and tablets. The transition over to these digital streaming providers has slowly been increasing in popularity over traditional cable but has recently experienced a surge during the course of the COVID-19 epidemic.
For businesses that are trying to navigate COVID-19 and the implementations being put into action for the public’s safety, it may seem to make the most logical sense to decrease (or even terminate) all advertising spend during these unprecedented times. This logic is very flawed, as it could have the potential to intensify lasting negative effects long after this period of time. In fact, even as we begin to phase back into our regular routines, consumers will likely continue to utilize the CTV devices they have already invested in and stream OTT content for the majority of their at-home entertainment.
OTT/CTV Advertising, An Enormous Opportunity for Digital Marketers
As more consumers turn to OTT content, marketers have begun to shift advertising efforts as well. eMarketer predicts that OTT ad spend will hit $9 billion in 2020 and is projected to skyrocket to $14.6 billion by 2023. When evaluating the benefits, we can better understand how this platform is a strong competitor to traditional cable and a great vehicle for digital advertising.
For any type of marketing campaign, it is essential to get your message across to the right audience at the right time. CTV and OTT devices can target audiences based on the viewer and their interests that are identified through demographics and digital behaviors. By targeting better audience segments, campaigns will be directed to viewers with a higher propensity to relate to the advertisements and more likely to have a positive interaction such as watching the entirety of the ad. CTV advertising implements targeting through first-party data, third-party data, and even mechanisms based on geolocation through the device’s IP address! IP targeting would be especially effective for local businesses that are wanting to advertise to local households. An asset to these targeting mechanisms through OTT devices (like smartphones, laptops, etc.) businesses can retarget marketing through display advertising.
Another feature of CTV advertising is the real estate allotted per each campaign. Typically placed in “pre-roll” (before the video) or “mid-roll” (in the middle of a video), a campaign momentarily has 100% of the screen space to present their ad and personalized message to the viewer. When this is paired with the average OTT advertisement completion rate at 98%, it becomes clear how this advertising platform is establishing itself as a competitive digital strategy.
Specific metrics are tracked for every campaign that measures its performance. The best metrics to measure performance can vary across platforms. Specifically for CTV, most ads are geared to drive high funnel campaign objectives and are best to promote brand exposure. CTV advertisements are watched on traditional screens that do not have the capability to click a link on an advertisement to dive further down the funnel. To evaluate CTV campaign performance these are some of the main metrics marketers should look into:
- CPCV (Cost Per Completed View) – the advertising cost / completed video view
- VCR (Video Completion Rate) – the percentage of how many times the ad is watched from start to finish / the number of times the video was started
- CPM (Cost Per Mille) – the cost per thousand views
As mentioned before, CTV is a supportive device that can stream OTT content, but when watching on technology such as smartphones and laptops – advertisements could then have the ability to click for further detail or other action-oriented objectives. Click-through rates and conversion rates would be great metrics to track throughout those campaigns.
That being said, Ad Week stated that while viewing a program, two out of three people use a second screen to look up information on a product they saw during that ad. While that is a major win for businesses as a whole, this can make performance tracking difficult to follow due to the use of a variety of devices and can also have an effect on the accuracy of the conversion credit allocation throughout the customer journey.
What the Future Holds
Even though we are beginning to open public places in phases, we still don’t know when we will fully return to normal, or the lasting effects that this quarantine will have on a multitude of businesses and industries. Our team at AVX Digital is interested to see how this platform and its momentum will continue after COVID-19. Although the stay-at-home orders boosted the rise of OTT/CTV advertising, we have already begun to see this platform gain significant traction in the world of advertising. In a recent report published by Nielsen, households around the world have exhibited an impressive 60% increase in the amount of content consumed – solidifying the fact that consumer’s behavior is constantly changing and adapting to the times. Can you say the same for your business’ marketing efforts?
If you would like to learn more about OTT/Connected TV Advertising or are interested in how this strategy could be implemented for your business, please get in contact with the AVX Digital team.