When we talk about video in the advertising industry, we don’t just mean commercials that play on a television set in a nuclear family’s living room anymore. The media landscape is rapidly expanding - and fragmenting - for video. In fact, many people are “cutting the cord” and opting out of their linear TV subscriptions altogether, and there’s a growing group of consumers who never even opted-in to linear TV. In this new climate, you must think differently in order to get your video content in front of the right people at the right time.
You may think it’s the advertisers that call the shots in this industry, but in reality, it’s the consumers that tell us where to go. Right now, consumers are telling media planners and buyers to go in a lot of different directions. So, what should we keep in mind for the future of media placement on TV?
Well, there are several trends emerging.
Trend #1: A TV is Not Just a TV
We have a lot of different screens to choose from when it comes to accessing the video content we want, and our growing number of devices make it easier than ever. Not only can PCs, laptops, tablets and smartphones become TVs, there are also devices on the market such as the Amazon Fire TV Stick or Roku that allow TVs to have a life beyond the cord. To further complicated matters, most consumers don’t just use one of these devices to watch their favorite shows and content. All told, time with video amounts to nearly six hours per day for consumers, and this includes time spent with several devices, transitioning regularly from one screen to another to fit the moment.
Why is it important to understand the growing diversity of connected devices? These new devices take consumption of video content out of our living rooms, and if you can understand where and how your audience is engaging, your media placement choices will be able to reach them more effectively. With the right audience data and planning tools, you can align your messaging with the environment, regardless of whether you’re employing short six-second bumper ads or a two-minute commercial.
Getting more insight into how your audience views their video content will help you make better creative, too. Riddle me this: will the same ad resonate in the same way on a eighty-inch television screen as it will on an iPhone? No, of course not. As video consumption happens in smaller places, we should be cognizant of the changing dynamics and engineer compelling new ways to deliver advertising messages and create brand awareness.
Trend #2: The Age of “Convenience Viewing”
Video on Demand (VOD) and Over-the-Top (OTT) options are soaring in popularity - and quantity. Only a few years ago, this part of the media landscape was sparse. We had Netflix and Hulu, of course, and to some extent Amazon Prime Video. In 2019, however, more players are joining the competition with their own streaming or online video subscription service. There are over 200 VOD/OTT options for consumers to choose from in the marketplace. All of these options have made it possible for audiences to watch whatever they want wherever and whenever they choose.
Channels that originally found their home on linear TV now allow consumers the opportunity to stream their content online. FOX, HGTV, Bravo, The CW and many more have jumped onto the bandwagon. And Disney, NBCUniversal and WarnerMedia have their own streaming services in the works.
Virtual Multichannel Video Programming Distributors (vMVPD) - services such as Hulu Live, YouTube Live and AT&T TV NOW - are also replacing traditional TV viewing. These services provide consumers with live and VOD content over the internet, and they also sell their own ad inventory within the channels they stream.
In order to avoid stretching your media dollars too thin in an effort to reach all of these disparate video streaming channels, you need to have a laser focus on who your audience is, what their interests are and how they consume their media. Luckily, these new platforms tend to know a lot about their subscribers. This data can help you hone in on your target audience and more effectively manage your media investment.
At this point, it may feel like the future of media placement - at least when it comes to TV and video - is a confusing labyrinth of digital streaming options. All of these new OTT and vMVPD options don’t mean the old ways are dead, though.
Trend #3: Don’t Count Out Linear TV (Yet)
For all that you’ve likely heard about the fall of the television, it may surprise you to learn that, according to Statista, the number of households with a television has actually been increasing in the US since 2013. You may find it less surprising to learn that the number of Pay TV households - those with a cable, broadcast or satellite TV subscription - in the US has been creeping ever lower each year. By 2020, Statista estimates the number of Pay TV households will fall to 95 million.
Of course, 95 million is not a number to scoff at, but it does indicate a larger trend away from broadcast and cable providers in the future. In the meantime, these Pay TV viewers are still a highly sought-after bunch. They tend to be very loyal, avid viewers who are passionate about their entertainment. They watch a higher number of TV shows than those just using VOD/OTT services, and they watch those shows more frequently. This makes them a reliable audience that is relatively easy to target over and over. In fact, direct to consumer (D2C) upstarts such as Peloton, Wayfair, Ring, StitchFix and Chewy, which have traditionally made digital and social marketing the cornerstones of their ad campaigns, are now turning to TV. These brands see the potential in targeting a larger and historically dedicated audience.
Even though this group of consumers is shrinking, the cost of media placement for them is not. Last year, the nation’s broadcast and cable networks saw advance ad commitments increase 5.2% to more than $20.7 billion, according to Variety. Many of the networks also sought hikes of 9-11% in their rates.
The reason for this may be that, as the industry consolidates, media buyers have less freedom to shop. Disney has gobbled up Nat Geo and FX; NBC and Universal have combined forces to become one major media conglomerate. This gives the networks more clout and media buyers less ability to leave the negotiating table. It could also be a simple case of supply and demand. As the supply of TV viewers drops, the demand for them increases. Advertisers want those audience groups, and there are fewer sellers offering media placement options for traditional television.
Get to the Point with Your Media Placement
Now, more than ever, it’s important to get your hands dirty and learn who your brand’s audience is, where they go to find their entertainment and how they access those channels. Put your personal bias and assumptions aside, and take yourself out of the equation. Where your target audience finds their entertainment may not be the same as where you find yours. Consider smaller, more targeted streaming channels and vMVPDs such as AT&T TV NOW, Sling or YouTube Live. These more obscure options may provide the perfect opportunity to connect with your ideal consumers in a less crowded arena.
Programmatic buying is also on the rise in the midst of so many digital video options. According to eMarketer, advertisers will spend $29.24 billion on programmatic video this year, almost half (49.2%) of programmatic display spend. It’s not just YouTube, either. Connected TV can be programmatic too. To get your ads on TV, you just need to know your budget, your goal and your target audience. Programmatic media placement also comes with much more data and analytics to help you improve your buys over time.
For now, the future of TV still includes our traditional conception of a TV. You’ll reach the largest audience through this platform and get your brand in front of a tried and true consumer base. How much longer this lasts is anybody’s guess, but part of your strategy should definitely be looking into virtual, multi-device, cross-platform media options so you’ll be prepared when the day comes.
The ad industry continues to evolve at a blistering pace, and there’s no sign that it plans to slow down anytime soon. As media planners and buyers, it’s our responsibility to stay on top of the changing landscape and look to the future in order to deliver an optimized strategy for media placement that is thorough, contemporary and delivers results. To work with marketers that bring over thirty years of experience to the media buying game, contact The Ward Group today.