The counterintuitive, yet perfectly obvious way marketers should look at advanced TV
By now, it’s beyond cliché to say that TV viewing behavior is changing. TV today is amazing; consumers have access to far more incredible content than ever before. Not to mention, the vast majority of consumers’ TVs are now connected to the internet, thus making content even more accessible.
In fact, according to a Leichtman Research Group report, roughly three-fourths of U.S. TV households have at least one TV that's connected to the internet. Additionally, more than 30% of U.S. adults in TV households "watch video on a TV via a connected device daily — compared to 25% in 2017, 11% in 2014, and 1% in 2010." I believe those numbers are only going to rise.
The magic lies in understanding how that viewing behavior is changing and what marketers can do to make the most of those changes. As a marketer, it’s easy to get overwhelmed by it all. And if you’re particularly diligent, you might be inclined to benchmark and align your buying plan to every single way a consumer might consume video.
Before you try that, let me offer a simple word of advice: Don’t.
Trust me: It all changes too fast, and you’ll never be able to keep up. By the time you think you understand what all of the options are, they’ll have changed again.
Instead of focusing on what the industry offers, take a deep breath; relax, and focus on how consumers watch TV. The moment you do that, everything starts to snap into focus. Here are just a few of the big things my TV advertising company is seeing:
There’s a new kind of fragmentation.
Consumers are creating their own mix of media. According to my company's latest report, "For the first time in history, nearly as many households watch TV via streaming platforms (68% of households) as through traditional means (70% of households)." This is in line with recent data from Nielsen, which found that the percentage of households that can stream TV programming grew to 65% in 2019. A separate report from the company found that the number of traditional cables home fell to 76.4% in 2018 (registration required).
So, you can’t just buy a random set of over-the-top (OTT) and multichannel video programming distributors (MVPDs) to fill the gaps. If you do, you won’t be able to control reach and frequency or be sure which ads are really moving the needle.
Having the data about who has and hasn’t been exposed to your ads is now really important. Ask yourself if your provider offers millions or tens of millions of Smart TVs and households, deterministic or modeled data, the ability to understand who is seeing ads via linear TV and who isn’t, and any other unique and effective insights that are relevant for your brand.
These insights might surprise you. For example, we’ve found that some brands overindex certain audiences because they assume their prime-time media plan is reaching a more diverse set of people versus the same people over and over again, which isn't always the case. Ask your provider to offer insight on how content is consumed across devices, and across the entire household, so that you can be certain you’re reaching everyone you need to reach.
Ad-supported video on demand might surprise you.
Everybody knows that audiences are watching video in new ways, but what’s surprising is how they’re doing it. People are watching linear TV, ad-supported streaming and subscription streaming interchangeably throughout the day. We call this behavior "platform surfing."
Before we looked at the data, our assumption was that ad-supported video (AVOD) probably wasn’t a big factor and that there wouldn’t be enough ad-supported media in streaming to be meaningful to an advertiser.
But according to Digiday, various brands are investing in AVOD. And on our platform, 40% of streamers watch AVOD content, which makes them available for advertising. This is an important insight: The idea that audiences are spending time only streaming video on demand (and are therefore inaccessible) is a myth.
The people who love TV really love TV.
While many in the industry have tried to separate streaming and cable or satellite TV audiences, that’s not how people actually watch.
People who love TV, like me, don’t really care which pipe it gets delivered though. What they do care about is great shows. We refer to the audience who loves TV the most as "total TV watchers" — they watch TV through traditional means as well as stream content.
But the rise of this group only underscores the need for marketers to adapt to a changing landscape. It's important you understand not just who your target is, but how that target is consuming content. Whether via traditional means, streaming or both, ensure that you aren’t attempting to reach your audience in an environment that’s no longer relevant, or worse, that you aren’t blowing through frequency caps and reaching the same audiences too many times.
When advertisers combine linear and OTT to mirror the way people actually watch, it drives conversions across all viewers. What’s great about this new era of TV is that marketers finally have the data to confirm a lot of what they’ve instinctively known all along and debunk some myths along the way.
A good marketer knows that understanding customers matters. You don’t have to try to understand every video option they have today or might have tomorrow. Instead, let the data tell you.
The NPD Group projected that the use of connected TV devices will grow from 210 million in 2017 to 275 million by the end of 2021; almost half of this growth is expected to be driven by smart TVs. From my perspective, what the data says is incontrovertible: TV is alive and well. It just looks different.
The bottom line: If you’re rethinking how you look at TV, the best place to start is by seeing it the way consumers do.