Narrowing the Gap Between Traditional TV and Digital

Amrita Hemdev
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By Amrita Hemdev
June 12, 2018
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Advertising on TV has long been the best way for marketers to reach a large number of people at one time. But cracks are showing.

Big shifts in viewership habits have been occurring and now threaten the future of traditional TV’s viability. Even more problematic is that TV audiences are getting older, while younger viewers are increasingly turning to alternative digital sources for entertainment.

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. The time they previously dedicated to watching TV has moved to other activities and on multiple devices.

With that kind of wake-up call, entertainment giants should start teaming up with digital partners or try to create a new digital universe.

 

Here's a look at some of the biggest challenges traditional TV is facing currently:

 

Millennials watch traditional TV less or not at all.

Ratings are on the decline, especially among young people, some of whom don’t even own televisions. It’s hard to keep up with the many devices and apps people now use to watch shows.

The decline in traditional TV viewership across all demographic groups is well established at this point and more marked among tech-savvy Millennials who are quick to adopt the latest devices and services.

Previously the biggest threat to traditional TV was cord-cutters, viewers who are canceling their cable TV and turning to digital, Now there are the cord-nevers. These younger adults have never been cable customers and probably never will be. They're watching TV online, on multiple devices through streaming services like Hulu, Netflix, Sling TV, etc.

Millennials are comfortable with a multi-platform approach to video viewing and have earned reputations as cord-cutters and cord-nevers for their openness to eschewing the pay-TV packages, which has prompted concerns about the status of live TV among the younger cohort.

What's also alarming is the speed at which young people are abandoning TV. In 2011, 18 to 24-year-old Americans were watching 26 hours, 28 minutes per week of TV. Now, in 2017, they're watching just 14 hours, 31 minutes, a 40% drop.

 

1

 

TV: Right now and how they want it

In today’s world, it’s all about ease and convenience.

The whole concept of live viewing is dying. With the massive amount of television offerings today and a limited amount of time to watch them, viewers want their shows available according to their personal schedule.

Streaming offerings are providing fans with the ease to watch their favorite shows according to their availability across multiple devices.

 

The decline in Pay-TV subscribers

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.

 

2

 

A digital disruption is in progress

In 2017, there was tremendous consumer growth in streaming TV services, and 2018 is set to be even more significant. This year, eMarketer estimates that 181.5 million U.S. consumers will use connected TVs at least once every month -- equating to more than 55% of the U.S. population -- and by 2021, that number will expand to 194.4 million, which is almost 58% of the population.

The pace of digital disruption that is transforming the TV industry is accelerating: the growth in IP-delivered TV content is reshaping distribution models, consumer viewing habits, and advertising.

 

For advertisers, the answer may be in taking a more targeted approach that involves digital advertising.

 

Meeting in the middle

The reality is that change will be constant and that the market will ultimately reach a state of equilibrium. In the meantime, adopting data-driven TV strategies, new technologies, and solutions like over-the-top (OTT) advertising will help in being proactive and keep businesses booming.

The real value of bringing data and technology to TV is better targeting and measurement. Thus, there will be 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.

 

OTT is a smooth segue to selling digital

It is easier for advertisers who have never sold digital ads before to sell OTT ads. Broadcast stations are used to selling TV ads, and OTT ads give a similar end experience to the viewers.

ZypMedia captures spend traditionally reserved for local television and redirects it into OTT to enable more effectively planned and executed video advertising campaigns. The data available in OTT allows us to identify precise groups of consumers within local areas.

 


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 more over-the-top advertising every day.

You have questions about selling OTT advertising. We have answers. Learn more about how our digital solutions can support your business growth.

LEARN MORE

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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 Coordinator 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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