Online TV and Advertising

Family sitting on couch, father on left working on laptop, mother on right working with tablet and son in middle with a bowl of popcorn

Netflix, Hulu, or Amazon Video? The likelihood your household utilizes at least one of these subscription video services is pretty good. In fact one in four households in America don’t even have traditional cable or satellite TV anymore— and this number is on the rise. Consumers are rapidly dropping their traditional paid TV services for online streaming options with an ever increasing rate of 2.4% each quarter. With satellite and cable TV becoming a thing of the past, how do advertisers continue to engage and reach their audience? Not by sticking to their old ways, that’s for sure. And how do they prepare for the speed at which consumers are making the switch?

Creating Increased Awareness

The smartest advertisers have already accounted for the impact online TV has on the way they approach their advertising strategy. For example, they learned that it would be more difficult to reach their audience and that they’d have to put more effort into understanding them. Buying media based on time slots and channels, while still relevant, wasn’t going to work the same for online TV. In fact, Netflix almost made this possibility obsolete. However, other services, like Hulu, used this to their advantage. They allowed viewers to specify what ads they see so advertisers can target the most relevant viewers for their brand based on preferences, location, and viewing history. In fact, advertising through online TV subscriptions increases top-of-mind awareness and purchase intent by 12 to 15%. So while it may appear online TV limited the audience reach for advertisers, it also heightens the ability to effectively target relevant consumers with messaging.

Becoming More Targeted and Strategic

Due to the connectivity of devices and access to external consumer information, online TV subscription services will only become more personalized. This means advertisers will be able to get even more targeted with their messaging— both a blessing and a challenge. Viewers will come to expect ads relevant to them and what they’re watching. In order to be successful in engaging these viewers, extensive research into who to target and with what will be critical.

While online TV is increasing, it doesn’t mean that traditional cable or satellite offerings will cease to exist. Additionally, other digital platforms will continue to be a top-of-mind awareness driver. As a result, combining advertising strategy and efforts across a variety of platforms will be far more impactful. For example, some brands do a great job of combining messaging efforts for online TV, cable television, and social media. Couple that with the fact those most people likely dual-screen, or view TV while on another device, means a significant increase in the amount of potential engagements with consumers.

Incorporating Market Research

Advertisers have to be willing to change the way they conduct research and how they incorporate that research into their targeting and messaging strategies online and off. It’s easy to rely on traditional research methodologies for ad testing and media buying, but with the growth of the digital landscape and online TV, it’s impossible to continue with those methods. Determine if your brand could use the online TV space for advertising by

  1. Determining how many of your consumers are currently using online TV subscription services— then testing those advertisements with those consumers
  2. Utilizing an agile research methodology to keep pace with the constantly changing landscape of online TV viewership
  3. Iteratively testing creative across a variety of platforms to create a cohesive brand message

To get a head start on this process, learn more about consumer preferences when it comes to online streaming by checking out the executive summary below.

Download Executive Summary