Advertisers are spending more of their money on targeted TV ads. With streaming video gaining more market share, ads targeted directly to consumers have become more popular. Alexandra Bruell writes for The Wall Street Journal:
Audience targeting is hardly new to television, of course. It was rolled out years ago with select cable and satellite providers, but never lived up to its promise. That’s because advertisers could reach only people in the geographic footprints of those providers, and there was a lack of ad space—the providers generally sell only two minutes of ads per each hour of TV programming they carry.
Now streaming TV players like Roku, Hulu, Sling TV and DirecTV Now are helping the market to develop by increasing the available ad space, and their growing user bases are sprinkled throughout the country.
“We’re finally seeing some momentum, versus lots of little tests,” says Jonathan Steuer, chief research officer for Omnicom Media Group, a large ad-buying group.
It is still early, with ad spending on digital-TV player and streaming service Roku and Hulu making up under 1% of the $129 billion U.S. online-advertising market in 2019, according to eMarketer. And regular, broad-reach TV ads will remain the mainstay for the foreseeable future. For many purposes—launching a product or movie and promoting it to the mass market, for example—traditional ads are just the blunt instrument that a marketer needs.
But spending on the streaming platforms is growing quickly. And advertisers are increasingly turning to targeted-ad options to make better use of their marketing capital and reach consumers watching TV through new channels.
According to a study released in April, nearly 60% of advertisers surveyed by the Interactive Advertising Bureau said they plan to increase their budgets for advanced TV, including streaming content and devices and addressable video, which lets advertisers serve different commercials to different households watching the same shows.
“We’re seeing more advertisers wanting to put their foot on the gas,” says Tracey Scheppach, co-founder and chief executive of targeted-advertising consulting firm Matter More Media. “Now that traditional ratings are so low, you have to think differently.”
Read more here.
Jeremy Jones, CFA
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