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14 September 2018

How to Know Which Video Channels and Platforms Are Still Relevant for Consumers

The fast development of online advertising has spoiled brands who are craving for a more advanced, flexible and targeted way to buy TV and they want it now.

Due to its audience size and quality of impressions, TV is still the most efficient tactic when it comes to driving top funnel awareness. In the past, brands have been forced to adapt to this medium and understand that some of their dollars are going to be wasted against non-targeted audiences and that reporting and attribution models are directional at best.

However, the promise of a more targeted, flexible and efficient way of buying TV have been in the industry for a while. Connected TV, Addressable TV and Programmatic TV lead the way in a more advanced method that can minimize the waste when buying TV. Nevertheless, due to its complexity and technical challenges technology seems to have been improving at a slower pace. The main question brands and agencies who have been waiting for these alternatives to replace Linear TV must ask themselves is: are we there yet?

Other Ways To Buy TV

In order to understand whether or not advanced TV is already in a place to replace Linear TV, we must first understand the challenges they are currently facing.

For Connected TV, a non-standardized environment, the main challenge is its fragmentation. With over 20 different hardware platforms in play such as: Roku, Amazon, Apple, Xbox, and Smart TV manufacturers, Connected TV is a little bit of a Wild West today.

Even though Connected TV has shown a growth of 82% between 2014 and 2018 the majority has been through subscription-based content vs. ad supporting content. Due to this along with the environment fragmentation the inventory is limited. If you have a high reach number to achieve, most likely your ad will be shown to the same person multiple times without the ability of capping the ad frequency.

Addressable TV has doubled its growth in the past three years from 30% of U.S. Households in 2015 to 61% in 2018. Even with this household growth, addressable TV inventory is still limited, as TV operators only make about two minutes per hour available versus the full ad time, which is normally about 14 minutes.

Even with its limited inventory and high cost, Addressable TV is on the rise according to the ANA/Forrester State of TV and Online Video Survey, Fifteen percent of ANA members are now including addressable TV in their plans, and another 35% are experimenting with it.

Programmatic TV also suffers from the same challenges as Addressable and Connected TV. As it pertains to Programmatic, it has limited inventory, especially when it comes to premium programming. Big broadcasters don't want to see their advertising revenues reduced because programmatic allows the advertiser to eliminate wasted impressions.

Programmatic TV also lacks the technology and the efficiency Digital Programmatic has. In fact, based on a recent Nielsen study it's estimated that about half of the impressions delivered on Programmatic TV won't be reaching the target demo.

Balancing Act

Advanced TV technology is improving but at a slow pace. Due to its technical challenges and scale, at this time and in the near future, they are not able to offer a full replacement for Linear TV. Money has to follow the technology and big broadcasters are not too keen to change until they see that happening. Advance TV works great with a very narrow and precise demo, but for brands who are trying to generate awareness across a wider audience Linear TV should still be their primary focus in the next two years. Furthermore, Advanced TV can be a great compliment to Linear TV so that brands can better reach their targeted audiences.

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