In the United States, the same as in Europe, the number of connected TV users has witnessed a growth of 58% in 2016. By the end of 2021, it will jump up to 21%. Despite the fact that traditional TV viewing time has been declining in all countries, the total consumption of video content is increasing everywhere, every year.
TV and the Internet mediums have obviously merged into a single unit over a decade ago. A lot of TV channels can be easily found on the web which gave birth to the mixed broadcasting formats. Today they represent a high potential, favorable soil for serving individualized programmatic advertising.
What is connected TV and how it works
Connected TV is a universal term that encapsulates all television devices connected to the Internet, these devices are either based on the Smart TV platform, or the transmission is enabled by the Apple TV, Roku, PlayStation, and other consoles. Thus, connected TV combines the comfort of watching video content on the large TV screen with the freedom of choice to select appropriate content inherent to Internet broadcasting.
Smart TV platforms and consoles have been around for quite some time. For a long time, society ignored them or attributed them to the geeks’ stuff, until one day statistics revealed millions of Smart TVs in American households.
The European market is not falling far behind. In Germany and the United Kingdom, for instance, over 60% of households have at least one connected TV. Furthermore, 10 million new devices purchased every quarter significantly solidify the trend. The advertising market based on Smart TV is actively developing, and in less than a year the experts predict it will go wild.
Connected TV consumers: who are they?
The biggest advantage of connected TV is that it covers the audiences of both mediums – TV and Internet users. In the first instance, it attracts the users typically not prone to watching traditional TV. In the second instance, traditional TV viewers update their device and discover additional device capabilities as a bonus.
The marketers revealed that the majority of Smart TV users belong to millennials who pay close attention to health and lifestyle content categories and whose income level is above average. As a rule, they receive content and interact with it on different devices connected to the addressable TV.
Both millennials and other segments of users typically watch their favorite programs on TV in groups, with friends, or family, and there are typically 2.5 viewers per device.
Essential benefits of addressable TV
Since addressable TV is normally watched in groups, for advertiser this means significant cost reduction per view. The brands are free to experiment with formats and sizes of ads as functionality enables visiting the target webpage and committing purchases the moment the ad is served, just like with ads on the Internet.
Same way marketers and media-buyers can launch cross-channel campaigns that will be available on several devices at once or retarget the users on mobiles who previously stumbled upon the ad on TV but didn’t convert.
The other benefit is related to a fraud-free TV ecosystem and high viewability that comes close to 100%. So far this advertising niche is not overcrowded which means that advertisers don’t have to compete for the advertising space as they do online. Planning the campaign on addressable TV is a good idea because the best practices for serving such campaigns are almost equal to those of programmatic advertising on the web.
The combination of benefits obtained as a result of combining TV and Internet allows the advertiser to leverage detailed data considering campaign performance, evaluate the views, analyze interactions with creatives, and viewer’s reaction to various types of content.
On addressable TV, viewer’s attention is still priority number one for the brand. In order to capture it, the creative has to deliver the message effectively during the first couple of seconds and must not interfere with the normal TV watching experience. The common consideration for advertisers will be related to the creative types and how to suit them to all gadgets, all screens, and platforms the target audience uses for streaming TV. This way, launching the advertisement on addressable TV will not be down to the “does it really work?” question but rather to “what resolution or format makes it work better for this or that campaign”?
To sum up
The development of addressable TV makes it hard to say where the television ends and the Internet begins. Everything turns into a single field of interactive content consumption. Smart TV provides the users with videos on demand, games, social apps, and Internet searching, addressing individual tastes which appear to be far more easier to target.
Programmatic advertising synchronized with TV retains all the benefits of algorithmic buying: the ability to target inventory and audience, control the frequency of impressions, and daily budget spend. In addition, correctly configured addressable TV campaigns will provide advertisers with opportunities to discover the new segments of customers and build sophisticated, structured communication with them.