"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Matthew Kenyon, VP of brand strategy, Stirista
Over-the-top (OTT) and connected TV (CTV) are booming. Plus, a younger demographic is turning to newer services like HBO Max, Peacock and more. And advertisers are following viewers: ad spend on streaming will total almost $8 billion in the United States in 2020, up 25% when compared to 2019, according to eMarketer.
But while streaming lets advertisers precisely target key messages to viewers, that precision targeting comes with a downside: often the same ad is shown multiple times in succession, wasting impressions and budget, and damaging the brand.
The perception around ad repetition has changed
When done correctly, showing ads repeatedly has benefits for ad buyers and consumers alike. Ad repetition reinforces the value proposition of purchasing the product being advertised, and it can also signal to the consumer that the company feels strongly enough to invest in promoting the product. But a lot has changed since the early days of Madison Avenue and the limited availability of ad slots in TV and radio schedules.
The streaming ad landscape is rapidly expanding, but fragmented – both from the viewers’ and buyers’ perspective. A consumer could switch viewing platforms multiple times in an evening. An advertiser typically purchases their inventory from a slew of different vendors including app owners, device makers as well as media buying platforms. And there are less advertisers buying OTV than traditional TV. All of these factors lead to the same ads showing up in multiple apps and hitting the same viewer again and again.
The end result is that viewers become frustrated by ad repetition and it can negatively affect their viewing experience and overall perception of the brand. For the ad buyer, repetition reduces the effectiveness of their ad budget by wasting impressions and alienating potential customers.
Data, inventory and frequency
The goal of every marketer is to optimize their budget by directing spending to the top-performing channels. As far as optimizing ad spend on streaming services, there are three levers that advertisers can use – data, inventory and frequency.
The use of data from multiple sources including critical identity data is now a given when it comes to effective marketing. With overwhelming volumes of data available, marketers must take the time to identify the right markers and metrics that lead to the best ad spend decisions. Data collection and analysis is an ongoing process that encompasses demographics, buying behaviors, impressions, conversions and cost, among others. To operate this optimization lever effectively, a marketer must be able to clearly see the connection between their decisions and results and adjust accordingly.
The second lever is inventory – this refers to the number and type of streaming properties available to the advertiser. The mix of properties is something that should be tested and re-tested based on what the data is saying. Advertisers using programmatic ad buying (rather than more traditional bulk media purchases) can achieve fine-grained control over their digital ad campaigns along with increased transparency into campaign spend and performance.
The third lever is frequency. To solve the problems caused by ad repetition, a marketer must have a strategy for frequency capping. One solution offered by today’s ad buying platforms is the ability to manage ad frequency by placing a cap on how many times an ad should be shown per hour, per day or per week. Simply by instituting a frequency cap, an advertiser can immediately reduce wasted impressions.
Programmatic frequency caps are a good start, but more is needed as marketers clamor for an industry-wide solution that essentially deduplicates audiences across multiple platforms. It’s a tough sell, especially to the walled garden ad servers and aggregators like Hulu and Roku that want to capture and keep larger shares of advertisers’ dollars. But cross-media measurement and universal identifiers are what’s needed to reduce ad frequency across OTT/CTV outlets.
Optimizing streaming ad spend
The right use of ad inventory and frequency enables ad buyers to get the most value from their spend – whether it means running more ads on fewer channels, slicing targeting audiences differently or adjusting ad content with more precise messaging. Every adjustment must be backed up with accurate and rich identity data that yields deeper insights into your streaming investment.
You’ll want to experiment with the number of times an ad is shown in a given period of time on a particular property to find the optimal number of impressions needed for the message to resonate with the target audience. Careful calibration of the frequency and inventory levers will achieve the dual goal of optimizing streaming ad spend while also providing the target audience with a positive brand experience.