3 steps for a better perspective in the digital TV advertising environment

80 percent of televisions in Germany are now connected to the Internet, and the trend is rising. Reason enough for brands to deal intensively with the new advertising environment.

In addition to traditional TV programs, more and more people are also using digital TV and video offers. Content is increasingly being brought to television via the Internet. Either via Smart TVs or via additional devices connected to the Internet such as game consoles, Apple TV, Google Chromecast or the Amazon Fire TV Stick.

The spread of smart devices opens up new potential for advertisers to effectively reach their target group, because the range of television is supplemented by the digital connection with precision and control. However, in order to find the right channel for their own messages, brands have to be clear about the target group they are dealing with: According to the Viewtime Report 2018 from Sevenone Media, almost half of all connected TV users (CTV users) are between 14 and 39 years old. 36 percent have a monthly net household income of 3,000 euros and thus earn above average. In addition, CTV users are tech-savvy and like to try out new entertainment electronics such as streaming sticks, but also VR glasses or voice assistants. These users have high expectations:

First things first: How do CTV and Addressable TV differ?

These two formats are fundamentally different things. Under CTV, applications are summarized that rely on Internet access and are either installed directly on the television or on peripheral devices such as Apple TV, Amazon Fire TV or game consoles.

Addressable TV (ATV) is also an IP-driven channel, but it provides additional content beyond the linear television program. At the beginning it was mainly content that could be called up by clicking the red button on the remote control and offered the viewer corresponding added value. For example, if a cooking show was on television, viewers could use the red button to call up additional information such as recipes or background information on the program during the program. Quasi a Teletext 2.0.

In the meantime, however, digital overlays in particular have established themselves. For example, if the camera pans into the audience, a banner occasionally appears over the TV picture on addressable TV channels or the program is scaled down and the banner ad surrounds the TV section. The technology used for this in Germany is called HbbTV (Hybrid broadcast broadband TV). In Germany, twelve million addressable TVs are currently available in ten million households (source: Digitization Report, Die Medienanstalten / Kantar TNS, 2018).

While ATV enables new ways of addressing target groups through its placement in linear television programs, CTV in particular offers access to additional viewers who cannot be reached via linear television.

In order to position yourself successfully as a brand in the jungle of the digital TV environment, the following three steps are recommended as a guide:

Step 1: Use the peculiarities of the different channels correctly

With the fundamental technical differences between Connected TV (CTV) and Addressable TV (ATV) in mind, advertisers need to consider which channel is right for them and their target audience. Another crucial difference should be emphasized: CTV, or the individual applications, are controlled by their respective providers, i.e. app providers, for example. With the line item, the ad is shown within the app. If this app offers the user enough incentives to use it for a long time and intensively, this can be an advantage. For example, the app of a video platform offers a wide variety of content that entertains the user for a long time and motivates them to use it continuously.

This works differently with ATV. Here the content is controlled directly by the TV station. As soon as the viewer changes the program, he is offered content from the new TV channel. While here and in classic TV reminder spots, for example, cannot develop their effect, CTV prevents such a break in customer awareness for the advertising offer. Addressing users with a uniform storyline across all channels is fundamentally given at CTV.

The digital offers on television offer an optimal way to reach target groups who have turned their backs on linear television. Among them in particular the younger audience. In addition to classic TV advertising, CTV can also offer precise and controlled target group addressing. Firstly, this type of advertising can be customized. Suitable content can be displayed depending on the interests that are derived from data analysis of the profile of viewers. Second, there is much better control over how often a household watches certain commercials. Incidentally, with some providers also across channels, that is, it can be defined how often a user gets to see a message in total on display, mobile, audio and CTV.

Step 2: Set the right KPIs

In classic TV, the range of the individual station is still the main argument when choosing a channel for advertisements.

But advertisers shouldn’t just rely on reach or rely solely on the number of completed views in digital video channels. When defining the KPI, a cost-related component should always be included in the purchase of airtime and corresponding advertising environments. It is recommended, for example, to optimize for a KPI such as Cost per Completed View (CpCV) – advertisers always have two levers with which the target achievement can be adjusted in the course of a campaign: the number of times a video was viewed in full, and the corresponding cost per impression. The price can be adjusted accordingly on channels that generally have a lower view-through rate (VTR). Even with a smaller VTR, the branding effect is supported by the additional channel at a low price. In the case of attractive channels with a very high VTR, advertisers can then adjust their bid upwards. The increasing coverage of households in the advertising system will very soon open up cross-channel measurement. For example, whether a video spot in the CTV resulted in a user viewing the advertiser’s website on the mobile device.

Step 3: Reach the target group correctly with a feeling for trends

Advertisers should always keep up with the times and keep an eye on which new channels are available for advertising options in order to reach their own target group as best as possible. Some inventories are currently not available in the so-called Open Market, but only via Private Marketplaces (PMP). It is therefore worthwhile for companies to set up such PMPs with a few large marketers, for example to access the inventories of the large premium CTV streaming apps such as Joyn, TV Now, Zattoo, Waipu.TV, Pluto.TV, Samsung TV Plus and Co. to get.

Advertisers should also rely on offers from the Open Market – here, however, it makes sense to keep an active eye on quality and campaign performance.

Conclusion

CTV offers advertisers a way to add data-driven, digital options to the benefits of linear television. Compared to classic TV, CTV offers significantly better targeting, frequency control and better performance measurement. Contrary to the typical German attitude according to the stereotyped thinking “First wait and see how it all develops”, companies should now learn how CTV can best be used.

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