10 min read
Streaming TV Advertising: What Marketers Need to Know (2023)
In the decade and a half since Netflix popularized over-the-top (OTT) video consumption, streaming has become synonymous with television. We now use streaming TV to catch up on the daily news, binge-watch reality shows, and cheer on our favorite teams. Today, streaming accounts for almost 40% of all TV usage — with 93% of internet users reachable via streaming TV.
Marketers must adapt to this reality.
And luckily, there’s never been a better time to make the plunge into connected TV (CTV) advertising. Ad inventory grows each day as more users trade in their expensive subscription plans for ad-supported alternatives. These include hybrid video on demand (HVOD) services like Netflix’s “standard with ads” plan, as well as free as-supported streaming TV (FAST) services like the Roku Channel.
What’s more, premium live sporting events have also made the move to streaming — giving advertisers access to hyper-engaged viewers gathered around the living room TV. Cord-cutters can now easily watch NFL, MLB, NBA, MLS, and NHL games without giving cable or satellite another thought.
But advertisers making the move from traditional TV media buying to streaming TV shouldn’t approach it as a simple lift-and-shift. Getting it right means taking advantage of the nuanced opportunities that programmatic advertising delivers and adapting your strategy to this unique environment. Many agencies and brands also find that CTV advertising is complex and requires dedicated expertise. For these reasons, you’ll want to resource your efforts accordingly.
In this guide, we dive into how CTV campaigns differ from traditional TV advertising, which platforms serve ads today, and best practices to implement. Read on for all the details — or navigate to the section of your choosing below.
Table of Contents
What Is Streaming TV Advertising
Also called CTV advertising, streaming TV advertising describes ads that play during video content that’s delivered over the internet — such as any commercial you’ve ever watched on Hulu, Sling TV, or a FAST service like Amazon Freevee.
Streaming TV ads now support both video-on-demand (VOD) content and linear programming, but they still differ from traditional TV ads in a number of ways. The primary reason for this is that streaming TV ads are delivered programmatically. This means that ad spots are purchased via automated auctions — and are generally selected based on the audience consuming the content rather than the content itself. Thus, advertisers are able optimize their ad spend by only targeting relevant buyers (rather than running a generic commercial to every person watching a given show).
How Is Advertising on Streaming TV Different From Traditional TV
At its core, streaming TV is digital. This is what allows CTV ads to be served programmatically.
For the purpose of illustration, let’s say that Jane Doe is watching her local team play Thursday Night Football with an over-the-air antenna, while her out-of-town brother, John Doe, is streaming the game on Amazon Prime.
During Jane’s commercial break, a generic ad for a large insurance company plays while she heads to the bathroom. The commercial has little relevance to her life, and achieves nothing other than keeping the company’s name top of mind. What’s more, the media buyers who purchased the spot can’t report anything meaningful about the campaign because they lack visibility into the data.
Meanwhile, her brother John sits tight during the commercial break because the ads align with his hobbies and purchase history. For instance, a Nike commercial might run showcasing the brand’s newest running shoe — complete with a custom URL that takes him directly to a page featuring that pair. As an avid runner training for his first marathon, John follows the link and makes a purchase.
The media buyer responsible for getting that ad in front of John gains insight into viewer engagement, conversions, ROI, and more. They’re also able to attribute John’s purchase directly to the ad and optimize future efforts based on performance.
Benefits of Streaming TV Advertising
Let’s zero in on the benefits of CTV advertising:
- Programmatic targeting: Unlike the spray-and-pray approach of traditional TV advertising, streaming lets marketers pinpoint their audience in a fully customized manner. Trying to reach foodies? With OTT advertising, you can serve commercials specifically to gluten-free, vegetarian, or keto viewers.
- Measurement and attribution: The digital nature of internet-delivered TV provides marketers with access to a ton of data. In this way, streaming TV ads tie marketing dollars to quantifiable outcomes — providing insight into how many people made online purchases, visited a brick-and-mortar location, or researched the advertised products following ad exposure.
- Full-funnel retargeting: It’s also possible to supplement streaming TV ad efforts with cross-device retargeting strategies that drive conversions across supplementary channels. For instance, John Doe might see a display ad for the same pair of Nike’s when he checks the weather on his laptop that evening — making the CTV campaign as close to clickable as possible.
- Cost effective: TV advertising of yore was only feasible for big businesses with even bigger budgets. That’s not the case with streaming. These ads can be purchased on a per-viewer basis, making it an affordable channel for all kinds of companies. What’s more, marketers only have to pay for actual views using cost per mile (CPM) rates. In this way, streaming TV advertising brings small local businesses into the realm of TV advertising.
Why Is CTV Advertising Growing?
At the dawn of streaming, users paid for ad-free experiences on platforms like Netflix. But that’s all changed in the past few years. Netflix, Disney+, and Amazon have all introduced ad-funded streaming into their offering — often at a lower monthly rate.
Additionally, FAST services like Pluto TV, Tubi, and Amazon Freevee have forgone monthly subscriptions altogether by relying solely on streaming TV ads to monetize their services.
Across all these models, the takeaway is clear: the future of streaming is ad-supported.
So what’s the source of this big shift? It comes to a number of factors.
- Streaming fatigue: Consumers have grown sick of paying exorbitant prices for ten different services, resulting in churn as many cancel premium subscriptions in favor of cheaper (and sometimes free) ad-supported alternatives.
- Economic pressures: Subscription video on demand (SVOD) services like Disney+ have wracked up billions of dollars in losses by prioritizing subscription growth over profitability. The economic pressures of 2023 have shifted this approach. By adding commercials, OTT platforms can reduce churn and increase cash flow.
- Content bottleneck: The writers’ and actors’ guild strike has created a roadblock in new content production, making it even more difficult to justify paying premium-priced services when there's nothing new to watch. If all you’re watching is reruns, it makes a lot more sense to do so on a free or cheap ad-supported service than coughing up big bucks for ad-free viewing.
There’s also something to say for the improved experience of watching ads on streaming services. Take it from Eric John, VP of the Interactive Advertising Bureau’s Media Center:
“People don’t hate advertising. They hate irrelevant advertising.”
When done right, streaming TV delivers pertinent ads that match the needs of individual viewers, creating a more enjoyable commercial break and overall experience.
What Streaming Platforms Serve Ads
Due to the growth of ad-funded monetization, the majority of streaming platforms serve advertisements today. The chart below groups some of the top services by category.
The Roku Channel
CTV Creative and Campaign Best Practices
If you want to drive campaign performance, advertising on streaming TV requires a few more steps than traditional TV. Some of the best practices include:
- Identify your audience and KPIs in advance: Because this medium allows you to target individual viewers and measure campaign performance, you’ll want to align on ideal customers and priority KPIs from the start. We’d recommend nailing down who your target audience is, what your objectives are, and how much budget you’d like to allocate to this segment.
- Create digital-first creative: Rather than running a generic awareness, it’s a good idea to use digital-first creative for these campaigns that drives response with a clear call to action. If that’s not feasible, it’s also possible to adapt standard TV assets with interactive overlays.
- Continuous optimization: Last but not least, you’ll want to test, test, test — and continuously optimize your campaigns based on the data. A “set it and forget it” mentality leads to missed opportunities and wasted spend when advertising on streaming TV.
Obviously, this comes with additional resource requirements. For this reason, many brands and agencies lacking in-house expertise chose to enlist the help of a managed services partner like Strategus to extend their team.
How to Advertise on Streaming TV With Strategus
Streaming TV advertising unlocks the potential to precisely target only relevant audiences on the living room television. But running effective campaigns is complex and requires dedicated resources. That’s why Strategus partners with agencies and brands to deliver high-performance CTV campaigns with measurable results.
As the only pure-play CTV managed service partner, we deliver effective campaigns that make the most out of your investment — backed by results you can see in real time. By partnering with or team of experts, you’ll benefit from:
- CTV-first tactics: We specialize in CTV and take a CTV-centric approach to advertising through comprehensive campaigns that leverage the rest of the programmatic ecosystem to deliver results.
- Proven partnership: Our dedicated team of programmatic CTV advertising experts provides personalized strategies and hands-on execution — resulting in impactful campaigns that simplify the complexities of CTV.
- Measurable results: By leveraging our industry-leading attribution and measurement capabilities, you’re able to quantify ROI at every touchpoint and continuously optimize your campaigns based on real-time data.
So what are you waiting for? Find out how Strategus can help you deliver high-performance CTV campaigns with ease. Contact us today.
Posted by Traci Ruether
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