October 20, 2021
If you’re a small business owner, chances are 2020 has been a real pain when it comes to the ways you’re doing business, reaching your customers or planning for the future. As the new SpotX report points out, while at home for large amounts of time during the pandemic, consumers around the world turned to OTT and CTV content in order to stay informed and entertained. New streaming services found their place in the market at just the right time, and many brands followed their customers to those new channels, putting more of their advertising budgets into digital. This article highlights the seven biggest global trends SpotX pointed out and explains why they’re the true game-changers.
The COVID-19 pandemic has not been the disruptor of the video industry, but more of an accelerator of the predominant trends, since viewers are now prone to replacing traditional cable services with a customized mix of OTT, on-demand and live streaming video content. New subscription models that the likes of Disney and NBC have presented, aim to pull the more traditional TV households into the digital future. The message is clear – in the dynamic uncertainty of such a business environment, success of any business that wants to profit from video advertising is tied to its ability to target its audiences and create personalized content for them, in order to expect a proper ROI. As SpotX points out, most viewers are open to ad-supported services and are turning to free or low-cost AVOD alternatives to reduce the strain on their wallets.
Today, effective TV buys must consider CTV and OTT, as many potential customers are almost impossible to reach via traditional TV. The report projects the budget shift from linear to digital kicking into high gear in 2021, with CTV advertising growing rapidly in the US market and more advertisers transforming their media plans to fit digital landscape since they know now that they can activate data for efficient audience, while achieving scale in OTT at the same time. Other important things are the rising safety concerns about social media that see many brands shift video budgets away from major platforms like Facebook; then the fact that the DOOH budgets dedicated to outdoor billboards and transportation hubs are now relocated to in-home screens as large amounts of people work from home. There’s also the fact that stadiums are closed to the public, so sports fans turn to streaming services as well and then there’s also the rise of mobile in-app advertising, so many advertisers are targeting popular app environments such as gaming, music streaming,and messaging apps.
According to a research, 41% of US consumers will buy a new TV during this holiday season, most likely a smart device with low prices being the main trigger behind many people’s decision to replace their entire TV and go fort the smart version, instead of purchasing digital media adapters. Smart TVs are already the most common way that people watch CTV in the US, giving the manufactures a much-needed boost to launch new offerings for both consumers and advertisers. In 2021, the device manufacturers may in fact generate more profit from their data and advertising offerings than from their device sales.
The term ‘addressable’ translates to ability to target households or individuals and nowadays, there is an opportunity to skillfully apply digital technologies and use the audience data to make video ads more relevant and their impact more localized. Some projections from the eMarketer show that amount spend on addressable TV ads will reach $3.5 billion by 2021, which is a huge rise from $2 billion in 2019. Creating more of these opportunities in set-top box and smart TV environments will expand the size of the overall marketplace, which SpotX claims will lead the industry to finally realize the increased revenue and targeting potential of linear inventory.
Audience data has never played a bigger role in helping buyers become more customer-centric in their video advertising than now. The fact that OTT is digital in its core and accounts for more than just a fair share of the critical mass of viewers, gives advertisers and media owners a chance to activate data-driven campaigns at scale. Data accuracy has also become non-negotiable, because buyers want assurance that they can reach their targeted audience with a message that will resonate, which means they will turn to data providers who demonstrate that they have the right set of tools and proper methodologies for ensuring data quality. With pandemic causing budget constraints, businesses began shifting their budgets from linear to CTV because of its measurability, so demonstrating campaign effectiveness is now more important than ever with CTV having the ability to prove campaign ROI through very tangible consumer outcomes.
Advertisers are now considering cable TV and OTT ad buys together, because the efficiencies of programmatic buying, along with the opportunities to apply data which helps in reaching out to a very specific audience segment, are seen as major benefits that are accelerating the shift of traditional TV budgets to digital channels. COVID-19 notoriously pulled the programming schedules apart, so buyers became more flexible in their ad buys, although they didn’t want to lose the security that comes with an inventory guarantee. Programmatic doubling down on deals turned out to be a perfect match, leveraging the speed and targeting of programmatic pipes to allow advertisers to activate their audience data, while staying true to the agreement that guarantees a fixed price in return for the access to a desired inventory.
SpotX claims that 2020 highlighted the need for brands and media owners to build more resilient value chains, since the concepts of demand and supply path optimization have been put into focus thanks to the pandemic-induced and volatile market shifts, which for business leaders on both sides means reevaluating their vendor lists and focusing on fewer, yet trusted partnerships, which may then lead to cost savings, but also improved quality in their buys, particularly in brand safety.
All in all, the message is clear – consumers want choice of when and how they watch their TV and whether that video content is paid or ad-supported, which gives space for big bets to be made on the future of video in 2021, with new technologies emerging to support the evolution.
If you want to be a part of video advertising future and make the most of the oncoming trends, visit AdAmp to find out how you can plan and design your video advertising campaigns, localize their impact and track their progress in real time, while relying on trusted TV service providers.