Articles by: "Caroline McCarthy, VP, Marketing – true[X]"

What CTV marketers can learn from TV’s past mistakes

October 6, 2021 Caroline McCarthy, VP, Marketing – true[X]

People working in CTV advertising often toss around phrases like “the living room of the future” and “the connected consumer.” TV technology today is pretty darn impressive and its easy to be optimistic. With content like choose-your-own adventure programming and sophisticated hardware, today’s TV tech puts the “home theaters” of even a decade ago to shame.

However, there’s also a central dilemma: The tension between wanting to innovate and wanting to play it safe in order to avoid annoying or alienating consumers. How high-tech is too high-tech for certain audiences? There are a number of emerging technologies designed to enhance the viewing experience that advertisers could leverage. However, just because they can doesn’t mean they should.

For brands, designing a campaign for unproven territory can mean designing a campaign that doesn’t work because it fails to resonate with consumers. On the other hand, if you pass up the chance to be first-to-market, someone else will get there instead. The trick is to find the just-right spot in between.

Luckily, there are some lessons to be found in some of the past few decades of innovation in the living room. As with ad overload, history can teach us a few things about marketing on CTV.

Watch for consumer adoption

First, track consumer adoption. Just because a technology exists doesn’t mean that consumers are using it. That might be because it’s too expensive, too difficult to use, or just not useful. Consumer uptake is what really matters, especially with an emerging medium. And the reality is that plenty of TV technologies promoted by mainstream consumer electronics retailers encounter lukewarm reception from buyers.

Remember curved TVs, which were hyped up back in 2013? It turns out that you can’t replicate an IMAX experience in your living room, no matter how high your ceilings are. Meanwhile, take a look at voice control, something that may have seemed like a science fiction technology not long ago. You can thank the marketing behind Amazon’s Alexa and Apple’s Siri for convincing consumers that voice control is both useful and user-friendly. As a result, we’ve found that voice-controlled ads really do engage users.

Consumers crave convenience

Second, never forget that consumers crave convenience. Integrating new tech into your advertising often isn’t worth it if it makes the brand experience more complicated for the consumer. This is particularly important when translating digital campaigns from desktop and mobile to the lean-back CTV environment.

There’s perhaps no better cautionary tale here than 3D TV. Watching some entertainment in 3D – sports, for example – seemed thrilling at first. But needing to wear specialized glasses for the experience, in addition to the added cost of 3D TVs, posed a barrier to entry that consumers weren’t willing to surmount. Then ESPN backtracked on a plan to put live sports into 3D, which eliminated the one incentive many consumers had to adopt the new tech – a more immersive sports experience.

There’s an exception to this, though. You can offset added complexity with a value exchange. If you’re going to make an ad experience more complicated, be upfront with what consumers will get in return. That might be fewer commercials for the rest of the episode they’re watching. It might be discount that they can capture with their mobile phones straight off their TV screen (or both).

Prepare to adapt to change

And finally, be ready to adapt to change. Things change fast – hardware, software and consumer habits. Five-year plans for a new medium may need to be altered in a matter of weeks.

In addition, keep an eye on market signals even if you consider them to be externalities. Some media executives and technologists were singularly focused in the mid-2000s on the HD-DVD vs. Blu-ray race to supplant the standard DVD. However, that might have distracted them from the fact that before either could “win,” streaming media became the choice of consumers worldwide. Millions of dollars were invested in technologies that were obsolete before they even hit the market.

“We’ve screwed up in the past but we won’t do it again” is a common mindset that’s been in the ad industry for decades. Typically – spoiler alert – we do screw up again. But even as we look to the future, having an eye on the past can never hurt to help avoid a few missteps.

Advertising | Perspectives

The post-Covid streaming trend we can count on

June 2, 2021 Caroline McCarthy, VP, Marketing – true[X]

At long last, it seems there may be an end in sight for the Covid-19 pandemic in the United States. Leaders of states and municipalities that have had some of the strictest lockdown and quarantine measures are announcing their reopening dates. Vaccines aren’t just readily available, you can pretty much walk up and get one now. And, in a move that was a shock to some and a relief to others, the CDC has announced that with a few exceptions, vaccinated American adults can resume lifestyles that they’d think of as “normal.”

Getting back to life as usual means getting back to business as usual. But for those of us who work in the media industry, some things have changed permanently. We just don’t necessarily know what they are yet.

One of the biggest unknowns for our industry is streaming video, which experienced a massive boom as consumers found themselves encouraged to stay at home. That left them with new blocks of free time resulting from a lack of social gatherings, commutes, and leisure activities. But industry analysts predicted, too, that much of this would be temporary. Once lockdowns lifted, they cautioned from the start, trends would return to a baseline.

Attention

Now, with full reopenings unfolding in real time, here’s the question for marketers: How should we prepare for consumers’ post-Covid habits? The answer may be simpler than you think. Corporate mergers, tech and device launches, and subscription churn (often fueled by hit shows) will invariably have a collective impact that we can’t quite predict. What we can count on is that the real variable is attention.

In the ad industry, we know our business has always been all about attention (or at least we should). But right now, as we exit an unprecedented surplus of attention thanks to a year of quarantines, lockdowns, and stay-at-home orders, the streaming wars are getting more heated than ever and consumer viewership trends could go in any number of directions. There’s never been a more important time to invest in quality content and experiences.

Boom

Where to start? First, we really have to grasp just how massive streaming growth was last year. Subscriptions to streaming services, already on the rise, reached 1 billion worldwide; over 25% of consumers in the U.S. subscribed to at least one new service during the pandemic. With many live sports canceled, many consumers reevaluated why they were keeping a traditional cable subscription around. And quite a few of them decided it wasn’t worth it, as “cord-cutting” hit record highs. Sales of connected TV devices also shattered records, with a spike over the holiday season.

As for advertising? In spite of the fact that many of the biggest streaming services have no advertising, ad-supported services increased their share of the market during Covid, from 28% to 34%.

In other words, when COVID-19 hit, the streaming industry was gifted with unprecedented access to consumer attention — probably more of it than we deserved. Now, there’s renewed competition for that attention, with Americans eager to finally travel, socialize, and spend time with loved ones in person rather than over Zoom.

Whether they’ll ditch one streaming service for another (and if so, which ones) is a big question mark. But consumers will be more discerning with their time and attention, and more than ever, they’ll spend time where their attention is respected.

Respect

What does that mean, specifically?

First, attention is up for grabs.

When Covid hit, streaming was already experiencing both skyrocketing consumer growth and some seismic shifts on the business side that gave users even more options for where to spend their attention.

Devices like the PlayStation 5 debuted; services like HBO Max and NBC Universal’s Peacock launched. The announcement of WarnerMedia and Discovery’s $43 billion merger is a reminder that upheaval in the industry — and hence, the potential for changes and upgrades in consumer offerings — is far from over. High rates of subscriber churn mean that loyalty is still anyone’s game.

Second, the connected living room is here to stay.

Some of the most confident predictions about post-pandemic consumer habits have indicated that once people switch from linear TV to streaming, they are unlikely to switch back. Covid cord-cutters, for example, probably won’t resubscribe to their cable bundles (especially since live sports’ presence on streaming continues to grow). And while both linear and connected TV usage rose during the first few months of the pandemic, ComScore found that virtually every household streaming device continued to grow in data usage even after initial lockdowns began to lift. The biggest growth? Smart TVs, which many households had at home but weren’t even using for streaming before.

This is great news for marketers because, to put it simply, connected TV is great at getting consumers’ attention. Our research at true[X] has found that compared to desktop and mobile, an ad on CTV drives more brand lift at every stage of the purchase funnel. But there’s a catch…

Third, the winners will be the ones who respect that attention.

Streaming is the inevitable future of TV, but that doesn’t mean just being on CTV is enough. Subscription churn is still heavy and consumers have many options —including plenty with no ads at all. With time in front of the living room TV facing new competition for attention as the Covid crisis comes to a close, consumers will be more discerning about what they’re willing to put up with. They already didn’t want their attention to be exploited or wasted, and that will only be more pronounced now. That’s why streaming advertising needs to be better — more relevant, less intrusive, and with less volume — than linear TV and desktop and mobile video advertising. Just being on a bigger screen where people tend to sit down and commit to longer content isn’t enough.

Opportunity

If you work in digital media, whether on the advertiser or AVOD publisher side, and you want to keep capitalizing on the streaming boom, this should be what you care about. Are you confident that your ads work, so that you don’t have to rely on high frequency (and annoy viewers in the process)? Do consumers have an experience that they don’t hate? This is the time to answer those questions, and make it more likely that consumers will lend their newly scarce attention to you.