The Connected TV Battle – A Song of Traditional and Digital Media

Recently, we kicked off our connected TV series with a look at the convergence of digital and linear models. In this post, we’ll take a deep dive into the digital landscape by looking at the growth of connected TV audiences and the major OTT services vying for viewers’ attention. 

It’s been nearly a fortnight since Game of Thrones reached its highly-anticipated conclusion. Over the last week and a half, millions of viewers watched (and re-watched) the series finale to find out which of Westeros’ finest would end up on top, only to see the hotly-contested, blade-forged metal death chair (SPOILER ALERT!!!) reduced to a puddle of melted steel and broken dreams. In the end, 13.6 million viewers tuned in live to catch the finale, with another 6 million or so streaming the episode or watching it on-demand.

As the final clash for the Iron Throne unfolded, a related battle raged across the digital media realm. Over-the-top (OTT) video providers like Netflix, Hulu and Amazon Prime Video continue to fight for the loyalty of viewers who are increasingly ditching traditional TV providers in favor of internet-connected viewing options.

For marketers, these connected TV audiences represent an increasingly significant opportunity to blend digital’s ad targeting capabilities with traditional TV’s massive reach. To give you a better understanding of the opportunity, here’s a look at the growth of connected TV audiences, the OTT services battling for viewers’ attention (and dollars) and the devices that deliver the content.

Connected TV audiences

Let’s start by clearing up the confusion between connected TV and OTT. Connected TV refers to the devices audiences use to stream video (e.g., a smart TV). OTT services are the apps and providers that deliver the content (e.g., Netflix). To frame up this article, we’ll use connected TV audiences as a catch-all for viewers watching OTT content on internet-connected devices.

Connected TV audiences are comprised of two main groups:

No. 1: Traditional subscribers

Audiences who stream OTT video and also subscribe to traditional TV distributors like:

  • Cable and satellite providers
  • Wireless carriers and fiber operators
  • Major TV broadcast and cable networks
  • Internet Protocol TV (IPTV) providers
No. 2: Cordless viewers

Audiences who don’t have any traditional pay-TV service, comprised of two main groups:

  • Cord-cutters: have had a traditional TV subscription in the past five years
  • Cord-nevers: have not had a traditional TV subscription in the past five years

OTT streaming households by audience type

OTT streaming households by audience type

While traditional TV (i.e., pay TV) viewers still outnumber connected TV viewers roughly 2-to-1, the tides are starting to turn. This trend is significant for brand marketers who will need to reallocate budgets to account for the shift in consumer behavior.

Total pay TV viewers vs connected TV viewers (in millions)

Major OTT players

The growth of connected TV audiences has sparked an arms race among OTT video providers vying for their attention. It seems like a different media company launches a new OTT service every day as existing players jockey for the rights to popular video content and work to develop more original programming. Going back to the GoT analogy, there are three main houses in the race today: Netflix, Hulu and Amazon Prime. Think of them like connected TV’s versions of the Starks, Lannisters and Targaryens.

OTT Providers - Netflix - Hulu - Amazon Prime Video

But, like GoT, the OTT realm has a lot more houses, and these services use a variety of content and delivery models. There are way too many models to cover here, but let’s look at a few of the big ones:

  • Subscription video-on-demand (SVOD) model: OTT services that give users access to a wide range of original and aggregated content for a monthly rate (e.g., Netflix, Hulu, Amazon).
  • Network-based model: SVOD services built around TV and cable networks (e.g., HBO GO/NOW, Showtime Anytime, CBS All Access).
  • Linear OTT model: OTT services that deliver content from multiple TV, cable or satellite channels in real time (e.g., DirecTV Now, Hulu with Live TV, Sling TV).

These services are a mix of subscription- and ad-based models, making some of the services less attractive to marketers. Here’s a look at the major ad-based services across the various models.

OTT providers with advertising

OTT providers with advertising

 

(Source: eMarketer)

Across content and subscription models, there’s plenty of momentum behind OTT right now. Despite nearing what has to be an audience saturation point, market leader Netflix continues to grow. Other major platforms like Hulu and Amazon Prime Video are still growing as well. On top of that, big names like Disney and Apple have plans to launch their own services in the coming months. For marketers, this means OTT platforms will likely become an even more important channel for reaching consumers in the near future.

Connected TV devices

Perhaps the biggest difference between OTT apps and traditional TV providers is how they deliver content to audiences. With traditional TV, audiences are pretty much tethered to their TV sets and – with the exception of on-demand content – are forced to watch programs live. With OTT services, audiences have a lot more control of where and when they consume content.

Connected TV devices come in all shapes and sizes including smart TVs, gaming consoles, streaming boxes/sticks, etc. (Additionally, viewers can use computers, tablets and phones to stream OTT content.)

OTT streaming households by connected TV device

OTT streaming households by connected TV device

As of last year, streaming boxes and sticks were the most popular connected TV device. The two major players in the category are Roku and Amazon’s Fire TV Stick, both of which experienced solid growth in 2018.

Roku and Amazon Fire TV Stick penetration of U.S. Wi-Fi households

Roku and Amazon Fire TV Stick penetration of U.S. Wi-Fi households


To learn more about connected TV advertising, check out the third installment of this series:

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What You Need to Know About Native Advertising

Let’s talk about a massive advertising opportunity that has been flying under the radar for a lot of advertisers. It’s not that advertisers have ignored this opportunity, it’s more that they don’t really understand it. The opportunity I’m talking about is native advertising – a misunderstood format with serious potential for brands.

In 2019, U.S. advertisers will spend almost $44 billion on native ads, which represents almost two-thirds of all digital display spending. In other words, it’s already a pretty big deal. Still, even in the marketing and advertising worlds, not everyone is 100 percent sure what native advertising even means or what types of ads fall under its umbrella.

Some of that is the nomenclature. When someone says “TV commercial” or “paid search ad” it’s fairly simple to figure out what they mean. But “native advertising” isn’t as intuitive. So, let’s take some time to peel back the layers of this onion and help brand advertisers like you understand how to incorporate native advertising into your 2019 media strategy.

What is native advertising?

Let’s start with a softball question: what is native advertising? Here’s a simple definition from our friends at eMarketer:

“Digital display ads that follow the form, feel and function of the content of the media on which they appear, be it a webpage or an app.”

What do native ads look like?

Native ads come in several formats and on a variety of channels and platforms. Here’s a look at some of the more popular native ad formats.

In-feed ads

Paid social media posts that display in users’ feeds along with organic posts.

Native advertising - In-feed ads

Sponsored content

Ads for online articles, blog posts and other content pieces that show up in the sponsored content section on publisher sites (typically below an article from that publisher).

Native advertising - Sponsored content

In-app reward videos

Videos in mobile apps that reward users for watching (e.g., Pandora videos that offer extended periods of uninterrupted listening after users watch them).

In app reward videos

How can I use native ads in my digital media strategy?

For creative advertisers, native ads offer plenty of opportunities to drive results throughout the consumer buying journey. The key is focusing on your target audiences’ needs, demonstrating how you provide value to those audiences and building purposeful campaigns. After you lock in those three components, it’s a lot easier to decide which formats to use.

Focusing on your target audience

Before you start building your campaign, make sure you have a clear idea of the types of consumers you’re trying to reach. Conduct in-depth research into your target audience to figure out their needs and wants, what media channels they frequent and how they prefer to interact with brands.

Demonstrating your value

Once you understand your audiences, identify how your products and services address their needs. Your ad messaging should center on that value proposition in a way that resonates with specific consumers.

Building campaigns with a purpose

Ask yourself “what specific results do I want native advertising campaigns to drive for my brand?” Make sure your team understands what you’re trying to accomplish and the metrics you plan to measure success against.

What does the future have in store for native advertising?

2019 is shaping up to be a big year for native advertising. eMarketer predicts that U.S. marketers will spend almost $9 billion more on native ads in 2019 than they did in 2018.

U.S. native digital display ad spending

US native digital display ad spending

Mobile channels, programmatic platforms and social networks are the main drivers behind this increase. And, since there’s a lot of overlap between the channels, there will be plenty of opportunities to run campaigns that incorporate all three.

Native ad formats like video and sponsored articles are starting to become more popular as well, which has taken a chunk out of social media’s share of the ad spend. But social ads will still account for nearly three-quarters of native ad spend in the foreseeable future.

Percentage of native ad spending – programmatic, mobile and social channels

Percentage of native ad pending

There’s also a lot of growth happening in native advertising. Ad tech companies are building out the infrastructure necessary to handle large-scale programmatic native advertising campaigns that have:

  • The ability to test multiple creative messages
  • More sophisticated audience targeting
  • Better tracking and measuring capabilities

For brands, this means the already warm waters of native advertising should heat up even more. If your brand is interested in diving in, contact Mindstream Media Group to learn how our native advertising solutions can help Fast-Forward Your Business.

What You Need to Know Before Advertising on YouTube

This post originally appeared on franchising.com, click here to read the full post.

Social media advertising on sites like Facebook has become a common strategic play for franchisors, who are seeing both brand awareness and lead generation campaigns work well there. But for individual franchisees, buying social ads — let alone video advertising — it can be intimidating with all the strategic nuances, creative assets and copy required, and budget to consider.

While you may not have realized it, one of the most popular social networks – and one of the more advantageous for franchise advertising – is YouTube. Not sure if YouTube is for you? Here are five things you need to know before making YouTube part of your franchisee media mix.


Want to learn more about using YouTube to advertise your franchise business? Check out the full post on Franchising.com

How Livestream Video Can Strengthen Your Digital Marketing Strategy

Digital marketing is a fast-paced, dynamic landscape that continues to evolve as technology creates new digital trends. In this evolving landscape, the big question is always “what will be the next big thing in digital marketing?”

A trend experiencing major growth currently is livestream video. It’s expanding to almost all business sectors with a presence on social media. And in 2019, livestreaming is likely to become more commonplace in many businesses’ social media marketing campaigns. In fact, video streaming accounted for 75 percent of all internet traffic in 2017 and is expected to jump to 82 percent by 2020.

Livestreaming started as a niche platform but has quickly been adopted by the likes of Facebook, YouTube, Instagram and Snapchat. It allows brands to broadcast in real-time and share authentic, behind-the-scenes style content with new and current audiences. Live streaming not only is a unique experience that marketers can provide, but it’s also the experience that today’s social media users prefer. New York Magazine reported that 82 percent of consumers prefer live video from a brand over standard social posts.

With the chance to connect with the billions of users on Facebook and Instagram, live video is an opportunity you don’t want to miss out on. From up-and-coming brands, like Glossier, to institutions as famed as The White House, many are recognizing the impact that live video can have. If you haven’t yet incorporated live video into your digital marketing strategy, here’s three reasons why it’s time to start.

 

No. 1: Authentic User Connection

How to Create Social Media Content for Local Brands - featured imageUnlike straightforward YouTube ads or perfectly edited Instagram posts, live videos are reactionary, unedited and broadcast in real time. This provides a human element to the operation that no other form of digital marketing can really nail and allows your brand to make a genuine connection with your audience. Today’s social media users are exposed to mass amounts of thought-out and curated content, so they can quickly pick out social media posts that seem overly promotional or inauthentic. Live video brings a breath of fresh air into your marketing mix that your audience is sure to appreciate.

In turn, your brand will be rewarded with better engagement rates and improved customer loyalty. Consumers are more willing to support brands that they’ve made a connection with, both on and offline. According to Facebook:

  • 78 percent of their users are already watching livestream videos
  • Facebook users watch livestream videos for 3x as long as videos that aren’t live anymore
  • Livestream videos earn 10x as many comments

Research has shown that 86 percent of people say authenticity is important when deciding what brands they like and support. In particular, an overwhelming 90 percent of Millennials say brand authenticity is important, proving that younger consumers prefer “real and organic” over “perfect and packaged.” Live video is an ideal way to demonstrate your brand’s authenticity and create trusted content that your audience will respond to.

 

No. 2: Improve content variety

Facebook Cambridge Analytica Data Scandal-Featured Image

The casual nature of livestreams allows brands to capture or record moments that traditionally are out of scope in curated social media content. Brands can livestream events, host Q&As or just to go live spontaneously from the office for a more personal session with whoever tunes in. In many cases, live content is “spur of the moment,” so it requires little prep time or proper planning. Live videos can be fueled by audience interactions, ensuring your content is specifically tailored to your target audience and material that they prefer.

Women’s fashion line Carolina Herrera was one of fashion’s first innovators to utilize livestream to broadcast events, like their show in New York Fashion Week. As one of the first in the industry to do so, livestream content helped the brand gain 60,000 new social followers and 51.2 million impressions.

“If you don’t livestream your show,” says Carolina Herrera’s digital manager, “you’re missing out on a huge opportunity that your competitors are going to pick up on.”

No. 3: Increase brand awareness

Facebook Organic Reach Decline - What Brands Need to do - featured image

A key component of live videos is to give them a personality and flair that you want your audience to associate with your business; it’s a key component of your brand identity. Be sure to incorporate interesting facts about your business and let your audience know what about your brand separates you from your competitors.

Live content is also a great opportunity to work with influencers. Because livestreams can be more casual and off-the-cuff, many brands allow influencers to participate in an “Instagram Takeover,” where the influencer takes control of the brand’s account for a few hours. Influencers can promote the collaboration to their following, which exposes the brand to an entirely new audience.

Instagram also automatically sends a notification to your followers when you hop onto a livestream. Additionally, profiles that are currently streaming live video automatically become the first listed icons in the Instagram Stories bar. This ensures that your profile is top of mind for your audience and motivates them to tune in and watch your live video.

In 2019, you can expect livestream video to gain far wider acceptance. With the right strategy and a little creativity, your live content will lead to stronger brand loyalty, a more significant following and greater opportunities for growth. If you can nail livestream now, you’ll be closer to your customers and way ahead of next year’s digital marketing curve.