TV’s Landscape Is Evolving, and Local TV Advertisers Need to Adapt

Amrita Hemdev
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By Amrita Hemdev
November 07, 2018
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Do buyers and sellers of local TV advertising need to worry about the growth of Connected TV (CTV) and over-the-top (OTT) advertising? While it’s one of the most critical questions in the TV ad world, it doesn’t have a simple “yes” or “no” answer.

The explosive growth in CTV has been largely driven by a rapid consumer shift in viewing behavior. By some accounts, CTV now accounts for over one in five hours of all TV viewing. With younger demographic groups, that shift is more striking.

The user behavior that cable TV providers fear most – cord cutting – is projected to accelerate over the next five years. eMarketer estimates that by 2021, over 81 million U.S. consumers will have either cut their cords or never signed up for one in the first place, up 64% from today.

So, headed into the end of 2018 and beginning of 2019, how should a local TV seller or advertiser make sense of the changes affecting the TV industry right now?

Local TV advertisers need to adapt to the changing technology. Here’s why:

OTT viewership is rising.

Consumers are increasingly spending more time streaming OTT content. Big shifts in viewership habits have been occurring and now threaten the future of traditional TV’s viability. A Nielsen study in October revealed that in the last five years, there has been a 40% drop in traditional TV viewing by 18 to 24-year-olds. With that kind of wake-up call, entertainment giants have started teaming up with digital partners or try to create a new digital universe.

According to Nielsen, “the average streaming adult aged 25-54 consumes two hours and 28 minutes of OTT content per day. Forty-seven percent of those streamers watched TV only, 46% were reached by a mix of traditional TV and streaming, and 7% streamed exclusively.” Understanding the target audience and meeting them where they’re at is the key to an advertiser’s success. Across the country, OTT viewership is going up, therefore the opportunity to influence OTT viewers is also growing.

 

OTT is like TV with added benefits.

OTT ads give a similar end experience to the viewers just like TV ads.

OTT advertising delivers impressions in a TV-like environment, but with a higher engagement rate spurred from digital capabilities like targeting. Since OTT viewers actively select the show they want to see, they are less distracted and they’re not channel-surfing.

Moreover, unlike on the browser screen, OTT video ads tend to be displayed full-screen without the controls to either minimize or skip them. OTT devices aggregate a viewer’s favorite content in a single location, providing a one-stop shop for premium video. Thus, OTT holds advantages for advertisers — the large screen is intrinsically viewable and the living room environment leads to higher engagement, typically averaging 97% or higher.

Additionally, unlike cable, OTT offers new opportunities for audience targeting, allowing for more efficient delivery of ads to a selected audience set. Therefore, TV buyers should start thinking about adding OTT advertising as a part of their media strategy.

 

The future of television is digital.

It’s no secret that people love long-form video entertainment, dating back through the early history of television. As it evolves, the combination of television and digital attributes OTT provides is greater than the sum of its parts.

The real value of bringing data and technology to TV is better targeting and measurement and will lead to growth within the TV ecosystem itself. It’s about using the best of digital to the benefit of the TV market and allowing TV to evolve by narrowing the gap between traditional TV and digital.


For local advertisers looking to access cutting-edge marketing technology, ZypMedia promises the full package. We help local advertisers plan and execute their advertising campaigns.

When you're ready to grow your OTT sales, we're here to help you accelerate your success!

SpotX has ranked ZypMedia as one of the top 5 DSPs to help it reach 18x year-over-year growth in advertiser dollars spent on OTT in 2017. We help professionals like you sell over-the-top advertising every day.

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Amrita Hemdev

Amrita is an inbound marketer. She studied marketing and project management at UC Berkeley and proceeded to work in a fast-paced, digital advertising tech startup, with a goal of increasing brand awareness. She is currently the Content Marketing Specialist at ZypMedia. Passionate about digital marketing and having five years of experience in this field, she also started her digital marketing and creative agency, Sociato, based in India.
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