The festive season offered a much-needed respite from the cost-of-living crisis, but now the halls have been undecked the world looks decidedly less cosy. But in the grey and gloom, one thing we aren’t short of is entertainment.
With numerous streaming platforms vying to win over viewers through quality content, it’s been said we’re living through a golden age for TV. The problem, of course, is finding the time – and the money – to keep on top of the bewildering smorgasbord of services on offer.
After over-indulging during the festive period, many of us will have to make tough choices on household spending and start to cut back on excessive subscriptions. Recent price hikes from the streamers will surely lead to growing numbers of consumers opting for cheaper ad-supported tiers. Among the megaliths, Amazon Prime is introducing ads as standard from February – giving subscribers the choice to pay to opt out – whereas Netflix and Disney+ have offered lower cost options with ads.
Consequently, in 2024 ad-supported video on demand (AVOD) and free ad-supported streaming TV (FAST) are likely to go from auxiliary channels on media plans to become much more of a focus. Given these targeting options, connected TV could well come of age, not just a brand-building channel but as a performance media staple.
A step-change for local advertising
For brands and agencies, the next 12 months represent a major opportunity – arguably a last chance saloon – to show that digital targeting isn’t just a dirty way to drop cookies for attribution, rather a way to drive performance. CTV holds the promise to combine TV’s unrivalled reach and impact with digital targeting accuracy and – most importantly – measurability. It represents a step away from intrusive online formats that turn consumers off towards high quality ads aligned to content audiences have actively tuned in for.
What’s perhaps even more interesting is the potential for location-based targeting to deliver on the promise of brand-to-local for TV formats. Layered targeting working backwards from a postcode can be set to the radius or drive-time from a physical location or branch, a particularly powerful tool for service and appointment-based businesses.
What’s next?
Connected TV is a good option for direct-response. Engaging creative and the ability to serve highly targeted, personalised content will drive trackable actions, not just impressions. Counter to historic perceptions that TV costs exclude all but the biggest national and international brands, CTV campaigns have the potential to greatly reduce wastage. It’s a format that encourages constant creative optimisation, AB location testing and advanced media mix modelling.
Let’s say you’re a nationwide optician. The majority of stores are performing well but a tranche of them may be sub-par and have excess capacity. Using a targeted CTV campaign, you can reach glasses wearing households within a comfortable distance of these stores and even show available appointments over the next week. Couple this with a direct response mechanism, such as a QR code, and the ad becomes instantly measurable.
Building on this, the logical next step will be the mainstream rollout of shoppable ads. While big players such as YouTube have made in-roads in this space, if anyone can make this a mass concern it will most likely be Amazon. It has already experimented with teleshopping type experiences through its website, however, its proven advertising expertise coupled with Prime TV and ecommerce, makes it the strongest contender to make true one-click TV shopping a viable model.
Where do the risks lie?
If CTV is to reach its full potential, it needs to avoid the early missteps of online and mobile advertising and focus on proving its business value, not just how good its digital metrics look on a spreadsheet.
For the end user, it will be measured by quality, relevance and usefulness. TV is a very different medium to social platforms, even YouTube. Audiences will be largely consuming on large screens so assets will need to have a premium feel and be built for the channel.
This isn’t to say that all CTV campaigns are the holy grail we’ve all been waiting for, there are still measurement, data cleanliness and inventory quality issues that need to be ironed out first. Equally, we can’t yet know what streaming platforms or formats will offer the best bang for your buck.
So, it’s all to play for this year as more consumers cut cords and/or re-evaluate their position on ad-supported services. All of the major streamers recognise the potential, which should make the landscape increasingly competitive and further reduce the cost of entry to TV for a far broader set of brands.
As the distinction between traditional brand and performance channels blur, there are real opportunities for brave marketers of brands of any size to put a stake in the ground and do something genuinely leading and innovative, with performance impacts from brand right down to local level. Thinking big sometimes means starting small.
Luke Regan is managing partner at DAC UK
