How Marketers Are Winning Over Audiences With Ad-Supported Streaming

November 15, 2022

Author: John Vilade, Head of Sales, Premion.

The debut of Netflix’s ad tier in November 2022 and Disney+’s announced upcoming launch have further ignited the ad-supported streaming boom. With consumers adjusting their spending habits in the face of inflation and an increased subscriber slowdown, all signs point to an acceleration in ad-based models being the future of streaming.

Already, more than half (55%) of consumers use at least one free ad-supported streaming TV service (FAST), according to Hub Entertainment Research, and connected TV (CTV) ad spending has more than doubled in the past two years and is expected to top $20 billion in 2022, per the IAB.

The 2022 CTV/OTT survey conducted by Advertiser Perceptions found that advertisers are already shifting budgets toward CTV advertising. More than half using CTV/OTT will increase spending by an average of 22%. Moreover, 56% of advertisers have said the ability to precision target audiences is the top reason for increasing CTV/OTT spending this year.     

For marketers, the advent of new CTV targeting capabilities is bringing new opportunities and more flexibility for optimizing ad spending to meet changing consumer habits as local market dynamics evolve.

How brands are winning with new CTV targeting approaches

Advertisers across multiple categories are embracing streaming ads for both brand-building and performance marketing.

Digital and mobile marketers have turned to CTV for effective targeting in the wake of IDFA privacy changes, and both traditional TV and digital buyers are leveraging behavioral targeting capabilities and measuring CTV effectiveness with outcomes-based performance. Furthermore, they’re using brand lift studies to analyze ad recall, favorability and brand awareness. 

Beyond the ability to target by location, interests and behaviors, CTV advertisers have access to tailored targeting strategies to meet defined brand goals — whether it’s driving brand awareness with demographic or contextual targeting, reaching in-market shoppers with intender targeting or taking a more sophisticated persona-based targeting approach that aligns with their brand.

Marketers are driving brand awareness with demographic and contextual targeting

For top-of-the-funnel brand awareness campaigns, many advertisers are reaching a significant potential buying audience at scale with demographic or contextual targeting. Traditional (linear) TV buyers are well accustomed to this broader targeting approach as it’s best suited for reaching the largest audience possible with pricing efficiencies.

Reaching precise in-market audiences with CTV targeting capabilities

The advancements in CTV targeting allow advertisers to reach precise, in-market audiences. Advertisers can combine mass reach with in-market intender targeting to reach viewers throughout the funnel or find relevant audiences by specific behaviors and interests, such as in-market auto intenders or travel enthusiasts. With this approach, advertisers are using precise data options to find their intended buying audience. 

Additionally, advertisers can work with providers to leverage an advertisers’ first-party data for targeting, such as a political agency’s voter list affiliated with a specific candidate, political party or issue, which was especially valuable for political advertisers during the midterms.

Applying sophisticated audience-first targeting to streaming campaigns

For advertisers interested in reaching audiences with personalities and lifestyles that align with their brand, some providers can deliver a more sophisticated, persona-based targeting approach. For instance, advertisers can use an audience-first targeting approach that leverages audience personas based on, not only direct interests, but also adjacent interests and behaviors, such as budget-conscious shoppers or outdoor adventurers. This gives advertisers additional, relevant layers of targeting to capture potential customers missed by a narrower targeting approach.

Delivering localized and personalized CTV ads

New data-driven capabilities give advertisers the agility to swap out creative to different audiences in different markets in their CTV campaigns. The introduction of new dynamic creative capabilities is creating more personalization and relevancy for streaming TV ads. By using dynamic creative, CTV ads can be transformed to deliver messaging unique to each individual household with localized and interactive enhancements. For instance, a hotel brand can embed a scannable QR code into a CTV ad that offers the ability for a viewer to make a reservation and even provide directions. This not only makes the ad more personalized but adds an extra layer of ad relevance to drive advertiser results with specific localized and personalized call to actions.

The evolution in CTV targeting has made streaming TV an invaluable channel for advertisers to achieve their brand goals — whether it’s brand awareness or reaching highly-precise audiences with outcomes-based performance. As advertisers lean more into CTV, choosing trusted partners that can deliver powerful data-rich digital targeting campaigns that reach high-value audiences with premium content is proving to be a winning strategy for the ad-supported streaming boom.

Read us on Digiday here.

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