My dog made me do it.
Granted, it may not be the most common reason for joining the rapidly growing cord-cutter community, like value and convenience, but I truly did grow tired of asking the cable guy to come out and repair the line because, well, the dog chewed through it … again.
The dog was onto something, though; I’ve never looked back.
Joining an estimated 21.9 million U.S. consumers who have decided to cut the cord on paid subscription TV like cable or satellite by the end of 2019 (eMarketer, July 2019 forecast), my world has opened up with a plethora of new viewing options, live or on-demand, with — dare I say it? — some advertising I don’t even fast-forward through.
If it’s relevant to me and what I’m watching, I’ll stay tuned for a commercial. And it turns out I’m not alone with that sentiment. More than half of cord-cutters recently surveyed by The Harris Poll on behalf of ZypMedia report they, too, don’t mind the commercials, stating they find the advertising more relevant than what they used to see on cable television.
Via dynamic ad insertion (DAI) delivered instream, OTT (over-the-top) and AVOD (ad-supported video-on-demand) advertisers can fine-tune audience selection and ad delivery down to a household and subscriber level. No longer is it all about finding a program to advertise in, but rather about finding an audience. Your audience.
Knowing who that audience is, what they’re interested in, what they’re watching, where and on what becomes critical in the name of relevancy. Advertisers must not only understand basic demographics of program viewers, but how well those viewers match their high-value customers and the product or service being advertised. Obviously, this could vary between individual subscribers watching content alone on their tablet versus sitting with their family and streaming to their flat screen.
A key success ingredient: Having data and insights that support interacting with both individual subscribers and the households they reside in.
The Advertising Mecca
With a somewhat staggering Roku prediction for 60 million households to cut the cord on cable and satellite television within the next five years, the majority of U.S. households will soon be high-value over-the-top and internet streaming audiences. These are the audiences brands have been on the quest for since the first television ad for the Bulova Watch Co. was aired in 1941.
Though advertising to cord-cutters may be a bit more expensive than the $9 Bulova paid back in 1941, savvy brands are starting to push more and more of their budgets to what is becoming the new advertising mecca.
An impressive uptick in marketing dollars being spent on OTT advertising — estimated to grow by 20% in 2019 to $2.6 billion, according to the Winterberry Group — is indicative of the return on advertiser spending (ROAS) being realized by advertisers moving to this channel. Not surprising when you see OTT’s video ad completion rate is 98% according to a report by ad-tech company Freewheel.
A key success ingredient: Spend your dollars wisely; leverage data, insights and technology to precisely match ads with audiences and content; focus on return on spending rather than reach and frequency.
It’s All About Control
Advertisers need consumers and consumers need advertisers. It’s the bringing of the two together in a manner that benefits all, though, that is the tricky part. With razor-thin margins of error, it’s as if both are balanced on the edge of a knife, where either can easily fall to one side or the other: intentionally in the case of consumers, unintentionally in the case of advertisers.
Enjoyable “perks” of being a cord-cutter include convenience and options. They can watch what they want, when they want and drop out anytime without penalty. In what has become a consumer-centric world, it’s not surprising that they’re looking for that to be extended to their television viewing.
Similarly, advertisers realize “perks” with cord-cutters, too (cord-nevers and cord-shavers, as well). They can reach audiences that may not be found elsewhere, precisely target and maximize potential for high ROAS. They can advertise to who they want, when they want and where they want. It’s their new mecca for finding high-value audiences to interact with a brand.
Personalization is what makes it or breaks it — one side of the knife or the other.
If a benefit can be seen by the viewer, be it the benefit of the product or service, brand connection or simply entertainment, they will find the content relevant. If it matches their persona, their interests and attitudes and fits with the programming, even better. A recent Google study of 75,000 YouTube campaigns over two years found just that. A richer understanding of consumers can lead to up to two times lift in brand awareness and ad recall.
But get the personalization wrong and the consumers will tune out. The data and technology must be leveraged to enhance the interaction with audiences. Matching the right ads with the right people at the right time.
And, luckily enough, that’s in place for consumers and advertisers to enjoy.
Barbara Nelson is an expert product director with Acxiom, overseeing the development, maintenance and life cycle of segmentation and geospatial products in the company’s global data products portfolio.